Exhibit 10.1
================================================================================
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF AUGUST 15, 2003
by and among
TEMPUR-PEDIC, INC.,
TEMPUR PRODUCTION USA, INC.
TEMPUR WORLD HOLDING COMPANY ApS
and
XXX-FOAM ApS
as Borrowers
and
THE OTHER PERSONS PARTY HERETO THAT
ARE DESIGNATED AS CREDIT PARTIES
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent, US L/C Issuer and a Lender
and
XXXXXX COMMERCIAL PAPER INC.
as Syndication Agent
and
NORDEA BANK DANMARK A/S
as European Security Agent and a Lender
and
GE EUROPEAN LEVERAGED FINANCE LIMITED,
as European Loan Agent
and
HSBC BANK PLC
as European Funding Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
as Lenders
and
XXXXXX BROTHERS INC. and GECC CAPITAL MARKETS GROUP, INC.
as Joint Lead Arrangers and Joint Book Runners
================================================================================
INDEX OF APPENDICES
-------------------
Annexes
-------
Annex A - Definitions
Annex B - Commitment Amounts
Annex C - Closing Checklist
Annex D - Pro Forma
Annex E - Lenders' Bank Accounts
Annex F - [Intentionally Omitted]
Annex G - Currency Risk Management Policy
Annex H - [Intentionally Omitted]
Annex I - European Cash Management
Annex J - Mandatory Cost Formulae
Exhibits
--------
Exhibit 1.l(a)(i)(A) - US Term Note (Term Loan A)
Exhibit 1.1(a)(i)(B) - US Term Note (Term Loan B)
Exhibit 1.1(a)(ii)(A) - European Term Note A (Term Loan A)
Exhibit 1.1(b)(i) - US Revolving Note
Exhibit 1.1(b)(ii) - European Revolving Note
Exhibit 1.1(b)(i)(A) - Notice of US Revolving Credit Advance
Exhibit 1.1(b)(ii)(A) - Notice of European Revolving Credit Advance
Exhibit 1.1(d) - Swing Line Note
Exhibit 1.1(e)(iii) - Form of US Letter of Credit Request
Exhibit 1.1(f)(iii) - Form of European Letter of Credit Request
Exhibit 1.2(e) - Notice of Conversion/Continuation
Exhibit 3.1(m) - Form of Subordinated Note
Exhibit 4.6(d)(i) - US Borrowing Base Certificate
Exhibit 4.6(d)(ii) - European Borrowing Base Certificate
Exhibit 4.6(o) - Compliance and Excess Cash Flow Certificate
Exhibit 8.1 - Assignment Agreement
Schedules
---------
Schedule 1.1(c) - Conversion of Loans under Existing Credit Agreement
Schedule 3.1 - Indebtedness
Schedule 3.2 - Liens
Schedule 3.3 - Investments
Schedule 3.4 - Contingent Obligations
Schedule 3.7 - Asset Dispositions
Schedule 3.8 - Affiliate Transactions
Schedule 3.9 - Business Description
Schedule 3.21 - Activities of Ultimate Holdco, Intermediate Holdco,
Holdco,Spanish Holdco
Schedule 3.23 - Operating Leases
Schedule 5.4(a) - Jurisdictions of Organization and Qualification
Schedule 5.4(b) - Capitalization
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Investigations and Audits
Schedule 5.8 - Employee Matters
Schedule 5.10 - Litigation
Schedule 5.11 - Use of Proceeds
Schedule 5.12 - Real Estate
Schedule 5.13 - Environmental Matters
Schedule 5.14 - ERISA
Schedule 5.16 - Deposit and Disbursement Accounts
Schedule 5.17 - Agreements and Other Documents
Schedule 5.18 - Insurance
Schedule 5.22 - Collateral Agreement Schedules
Schedule 5.23 - Intercompany Payables
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TABLE OF CONTENTS
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Page
----
Section 1. AMOUNTS AND TERMS OF LOANS..........................................2
1.1 Loans..............................................................2
1.2 Interest and Applicable Margins...................................16
1.3 Fees..............................................................20
1.4 Payments..........................................................22
1.5 Prepayments.......................................................24
1.6 Maturity..........................................................27
1.7 Loan Accounts.....................................................27
1.8 Yield Protection; Illegality......................................28
1.9 Taxes.............................................................29
1.10 Limitations on Obligations of European Credit Parties.............31
1.11 Borrower Representatives..........................................31
1.12 Single Loan.......................................................32
Section 2. AFFIRMATIVE COVENANTS..............................................32
2.1 Compliance With Laws and Contractual Obligations..................32
2.2 Maintenance of Properties; Insurance..............................33
2.3 Inspection; Lender Meeting........................................33
2.4 Organizational Existence..........................................34
2.5 Environmental Matters.............................................34
2.6 Landlords' Agreements, Mortgagee Agreements and Bailee Letters....35
2.7 Further Assurances................................................35
2.8 Interest Rate Agreement...........................................37
2.9 Escrow............................................................37
2.10 Currency Risk Management Policy...................................37
2.11 Post-Closing Date Matters.........................................37
Section 3. NEGATIVE COVENANTS.................................................37
3.1 Indebtedness......................................................37
3.2 Liens and Related Matters.........................................41
3.3 Investments.......................................................42
3.4 Contingent Obligations............................................43
3.5 Restricted Payments...............................................44
3.6 Restriction on Fundamental Changes................................46
3.7 Disposal of Assets or Subsidiary Stock............................47
3.8 Transactions with Affiliates......................................48
3.9 Conduct of Business...............................................48
3.10 Changes Relating to Indebtedness..................................48
3.11 Fiscal Year.......................................................49
3.12 Press Release; Public Offering Materials..........................49
i
3.13 Subsidiaries......................................................49
3.14 Bank Accounts; Cash Management....................................49
3.15 Hazardous Materials...............................................50
3.16 ERISA.............................................................50
3.17 Sale Leasebacks...................................................50
3.18 Changes to Material Contracts.....................................50
3.19 Prepayments of Other Indebtedness.................................50
3.20 Real Estate Purchases.............................................51
3.21 Activities of Ultimate Holdco, Intermediate Holdco, Holdco and
Spanish Holdco....................................................51
3.22 Change of Corporate Name or Location..............................51
3.23 Operating Leases..................................................52
3.24 Recapitalization Dividend, Additional Payment and Additional
Dividend..........................................................52
3.25 Holdco Merger.....................................................52
Section 4. FINANCIAL COVENANTS/REPORTING......................................52
4.1 Maximum Capital Expenditures......................................53
4.2 Minimum Fixed Charge Coverage Ratio...............................53
4.3 Minimum Interest Coverage Ratio...................................53
4.4 Maximum Leverage Ratio............................................54
4.5 Maximum Senior Leverage Ratio.....................................54
4.6 Financial Statements and Other Reports............................54
4.7 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement......................................59
Section 5. REPRESENTATIONS AND WARRANTIES.....................................59
5.1 Disclosure........................................................59
5.2 No Material Adverse Effect........................................59
5.3 No Conflict.......................................................60
5.4 Organization, Powers, Capitalization and Good Standing............60
5.5 Financial Statements and Projections..............................61
5.6 Intellectual Property.............................................61
5.7 Investigations, Audits, Etc.......................................62
5.8 Employee Matters..................................................62
5.9 Solvency..........................................................62
5.10 Litigation; Adverse Facts.........................................62
5.11 Use of Proceeds; Margin Regulations...............................62
5.12 Ownership of Property; Liens......................................63
5.13 Environmental Matters.............................................63
5.14 ERISA.............................................................64
5.15 Brokers...........................................................66
5.16 Deposit and Disbursement Accounts.................................66
5.17 Agreements and Other Documents....................................66
5.18 Insurance.........................................................66
5.19 Government Regulation.............................................66
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5.20 Subordinated Notes Documents......................................66
5.21 Taxes.............................................................67
5.22 Collateral Documents..............................................67
5.23 Intercompany Payables.............................................67
Section 6. DEFAULT, RIGHTS AND REMEDIES.......................................67
6.1 Event of Default..................................................67
6.2 Suspension or Termination of Commitments..........................70
6.3 Acceleration and other Remedies...................................70
6.4 Performance by Agent..............................................71
6.5 Application of Proceeds and Payments..............................72
6.6 Loss Sharing......................................................73
Section 7. CONDITIONS TO LOANS................................................73
7.1 Conditions to Initial Loans.......................................74
7.2 Conditions to All Loans...........................................74
Section 8. ASSIGNMENT AND PARTICIPATION.......................................75
8.1 Assignment and Participations.....................................75
8.2 Agents............................................................78
8.3 Set Off and Sharing of Payments...................................83
8.4 Disbursement of Funds.............................................84
8.5 Disbursements of Advances; Payment................................84
8.6 Swiss and German Power of Attorney................................87
Section 9. MISCELLANEOUS......................................................87
9.1 Indemnities.......................................................87
9.2 Amendments and Waivers............................................87
9.3 Notices...........................................................88
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative.............90
9.5 Marshaling; Payments Set Aside....................................91
9.6 Severability......................................................91
9.7 Lenders' Obligations Several; Independent Nature of Lenders'
Rights............................................................91
9.8 Headings..........................................................91
9.9 Applicable Law....................................................91
9.10 Successors and Assigns............................................91
9.11 No Fiduciary Relationship Limited Liability.......................91
9.12 Construction......................................................92
9.13 Confidentiality...................................................92
9.14 CONSENT TO JURISDICTION...........................................93
9.15 WAIVER OF JURY TRIAL..............................................93
9.16 Survival of Warranties and Certain Agreements.....................94
9.17 Entire Agreement..................................................94
9.18 Counterparts; Effectiveness.......................................94
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9.19 Replacement of Lenders............................................94
9.20 Delivery of Termination Statements and Mortgage Releases..........96
9.21 Judgment Currency.................................................96
9.22 European Monetary Union...........................................96
9.23 Subordination.....................................................97
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
--------------------------------------------
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
August 15, 2003 and entered into by and among TWI HOLDINGS, INC., a Delaware
corporation ("Ultimate Holdco"), TEMPUR WORLD, INC., a Delaware corporation
("Intermediate Holdco"), TEMPUR WORLD HOLDINGS, INC., a Delaware corporation
("Holdco"), TEMPUR WORLD HOLDINGS, S.L., a company organized under the laws of
Spain ("Spanish Holdco"), TEMPUR-PEDIC, INC., a Kentucky corporation ("TPI"),
TEMPUR PRODUCTION USA, INC., a Virginia corporation ("TPUSA"), TEMPUR WORLD
HOLDING COMPANY ApS, a company organized under the laws of Denmark ("TWHC"),
XXX-FOAM ApS, a company organized under the laws of Denmark ("DF") (TPI and
TPUSA are sometimes collectively referred to herein as "US Borrowers" and
individually as a "US Borrower"; TWHC and DF are sometimes collectively referred
to herein as "European Borrowers" and individually as a "European Borrower"; and
TPI, TPUSA, TWHC and DF are sometimes collectively referred to as "Borrowers"
and individually as a "Borrower"); the other persons designated as "Credit
Parties" on the signature pages hereof; the financial institutions who are or
hereafter become parties to this Agreement as Lenders; GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity "GE Capital"),
as Administrative Agent, US L/C Issuer and as a Lender; XXXXXX COMMERCIAL PAPER
INC. (in its individual capacity, "LCPI"), as Syndication Agent and as a Lender,
NORDEA BANK DANMARK A/S (in its individual capacity "Nordea"), as European
Security Agent and as a Lender; GE EUROPEAN LEVERAGED FINANCE LIMITED, a company
incorporated under the laws of England and Wales (in its individual capacity "GE
ELF") as European Loan Agent for the European Lenders; and HSBC BANK PLC, a
company incorporated under the laws of England and Wales (in its individual
capacity "HSBC") as European Funding Agent.
R E C I T A L S:
- - - - - - - -
WHEREAS, Borrowers, Ultimate Holdco, Intermediate Holdco, Holdco,
Spanish Holdco, the other Credit Parties signatory thereto, the lenders parties
thereto (the "Existing Lenders"), GE Capital, as administrative agent and Nordea
as European loan agent for certain of the Existing Lenders, are parties to an
Amended and Restated Credit Agreement, dated as of November 1, 2002 (as so
amended and restated and otherwise modified to date, the "Existing Credit
Agreement"); and
WHEREAS, pursuant to and upon the terms and conditions set forth in
the Existing Credit Agreement, the Existing Lenders agreed to make certain loans
and other extensions of credit to Borrowers of up to $170,000,000; and
WHEREAS, pursuant to and upon the terms and conditions set forth in
the Agreement, each of the parties hereto wishes to and agrees to amend and
restate the Existing Credit Agreement on the terms and conditions set forth
herein, including to increase the Commitments to $270,000,000 for the purpose of
paying or funding some portion or all of any of the Recapitalization Dividend,
the Additional Payment and the Mezzanine Debt and the payout of fees, costs and
expenses incurred in connection with such payments; and
WHEREAS, it is the intent of the parties hereto that this Agreement
not constitute a novation of the obligations and liabilities under the Existing
Credit Agreement or evidence payment and reborrowing of all or any such
obligations and liabilities, that this Agreement amend and restate in its
entirety the Existing Credit Agreement and that from the date hereof, the
Existing Credit Agreement be of no further force and effect except to evidence
the incurrence of the Obligations thereunder, the representations and warranties
made thereunder and the obligations, covenants and liabilities of the parties
thereto prior to the Closing Date; and
WHEREAS, all capitalized terms herein shall have the meanings ascribed
thereto in Annex A hereto which is incorporated herein by reference. All
references to Revolver Agent in any Loan Documents shall be deemed to be
references to Administrative Agent.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Credit Parties, Lenders
and Agents agree that, as of August 15, 2003, the Existing Credit Agreement
(including all Schedules, Annexes and Exhibits thereto) is amended and restated
in its entirety to read as set forth above and as follows:
SECTION 1.
AMOUNTS AND TERMS OF LOANS
--------------------------
1.1 Loans. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrowers and the other
Credit Parties contained herein:
(a) Term Loans.
(i) (A) Each US Term A Lender agrees, severally and not
jointly, to lend to TPUSA and TPI in one draw in Dollars, on the Closing Date,
subject to Section 1.1(c), its Pro Rata Share of the US Term Loan A described
herein (the "US Term Loan A"), which shall have a total principal amount equal
to $30,000,000; (B) each US Term B Lender agrees, severally and not jointly, to
lend to the US Borrowers in one draw in Dollars, on the Closing Date, subject to
Section 1.1(c), its Pro Rata Share of the US Term Loan B described herein (the
"US Term Loan B" and together with the US Term Loan A, the "US Term Loans" and
each a "US Term Loan"), which shall have a total principal amount equal to
$135,000,000; and
(ii) Each European Term A Lender agrees, severally and not
jointly, to lend to DF in one draw in Dollars or in Euros, on the Closing Date,
subject to Section 1.1(c), its Pro Rata Share of the European Term Loan A
described herein (the "European Term Loan A"), which shall have a total
principal amount equal to the Equivalent Amount of $65,000,000.
The US Term Loans and the European Term Loan A will be referred to
collectively as the "Term Loans."
The US Borrowers shall repay the US Term Loans and DF shall repay its
European Term Loan A through periodic payments on the dates and in the amounts
indicated below ("Scheduled Installments").
2
US Term Loan A
--------------
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2003 $ 831,000.00
December 31, 2003 $ 831,000.00
March 31, 2004 $ 831,000.00
June 30, 2004 $ 831,000.00
September 30, 2004 $ 831,000.00
December 31, 2004 $ 831,000.00
March 31, 2005 $ 1,107,000.00
June 30, 2005 $ 1,107,000.00
September 30, 2005 $ 1,107,000.00
December 31, 2005 $ 1,107,000.00
March 31, 2006 $ 1,107,000.00
June 30, 2006 $ 1,107,000.00
September 30, 2006 $ 1,107,000.00
December 31, 2006 $ 1,107,000.00
March 31, 2007 $ 1,662,000.00
June 30, 2007 $ 1,662,000.00
September 30, 2007 $ 1,662,000.00
December 31, 2007 $ 1,662,000.00
March 31, 2008 $ 1,986,000.00
June 30, 2008 $ 1,986,000.00
September 30, 2008 $ 1,986,000.00
November 1, 2008 $ 3,552,000.00
US Term Loan B
--------------
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2003 $ 337,500.00
December 31, 2003 $ 337,500.00
March 31, 2004 $ 337,500.00
June 30, 2004 $ 337,500.00
September 30, 2004 $ 337,500.00
December 31, 2004 $ 337,500.00
March 31, 2005 $ 337,500.00
June 30, 2005 $ 337,500.00
September 30, 2005 $ 337,500.00
December 31, 2005 $ 337,500.00
March 31, 2006 $ 337,500.00
June 30, 2006 $ 337,500.00
September 30, 2006 $ 337,500.00
December 31, 2006 $ 337,500.00
March 31, 2007 $ 337,500.00
June 30, 2007 $ 337,500.00
3
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2007 $ 337,500.00
December 31, 2007 $ 337,500.00
March 31, 2008 $ 337,500.00
June 30, 2008 $ 337,500.00
September 30, 2008 $ 337,500.00
December 31, 2008 $ 337,500.00
March 31, 2009 $ 337,500.00
June 30, 2009 $ 127,237,500.00
European Term Loan A
--------------------
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2003 $ 1,800,500.00
December 31, 2003 $ 1,800,500.00
March 31, 2004 $ 1,800,500.00
June 30, 2004 $ 1,800,500.00
September 30, 2004 $ 1,800,500.00
December 31, 2004 $ 1,800,500.00
March 31, 2005 $ 2,398,500.00
June 30, 2005 $ 2,398,500.00
September 30, 2005 $ 2,398,500.00
December 31, 2005 $ 2,398,500.00
March 31, 2006 $ 2,398,500.00
June 30, 2006 $ 2,398,500.00
September 30, 2006 $ 2,398,500.00
December 31, 2006 $ 2,398,500.00
March 31, 2007 $ 3,601,000.00
June 30, 2007 $ 3,601,000.00
September 30, 2007 $ 3,601,000.00
December 31, 2007 $ 3,601,000.00
March 31, 2008 $ 4,303,000.00
June 30, 2008 $ 4,303,000.00
September 30, 2008 $ 4,303,000.00
November 1, 2008 $ 7,696,000.00
The final installment for each Term Loan, shall in each case and in
all events, equal the entire remaining principal balance of each of the Term
Loans, respectively. Notwithstanding the foregoing, the outstanding principal
balance of the US Term Loan A and the European Term Loan A shall be due and
payable in full on the Commitment Termination Date. The outstanding principal
balance of the US Term Loan B shall be due and payable in full on June 30, 2009
or earlier pursuant to Section 6.3 hereof. Amounts borrowed under this Section
1.l(a) and repaid may not be reborrowed.
4
The US Term Loan A shall be evidenced by promissory notes
substantially in the form of Exhibit 1.1(a)(i)(A) (each a "US Term Note A" and,
collectively, the "US Term Notes A"), and, except as provided in Section 1.7,
TPUSA and TPI shall execute and deliver a US Term Note A to each US Term A
Lender. The US Term Loan B shall be evidenced by promissory notes substantially
in the form of Exhibit 1.1(a)(i)(B) (each a "US Term Note B" and, collectively,
the "US Term Notes B" and, together with the US Term Notes A, the "US Term
Notes" and, each a "US Term Note"), and, except as provided in Section 1.7,
TPUSA and TPI shall execute and deliver a US Term Note B to each US Term B
Lender. Each US Term Note shall represent the obligation of TPUSA and TPI to pay
the amount of the applicable US Term Lender's applicable US Term Loan A
Commitment or US Term Loan B Commitment, as applicable, together with interest
thereon.
The European Term Loan A shall be evidenced by promissory notes
substantially in the form of Exhibit 1.1(a)(ii)(A) (each a "European Term Note
A" and, collectively, the "European Term Notes A"), and, except as provided in
Section 1.7, DF shall execute and deliver a European Term Note A to each
European Term A Lender. Each European Term Note A shall represent the obligation
of DF to pay the amount of the European Term Loan Commitment of each applicable
European Term A Lender, together with interest thereon.
(b) Revolving Loans.
(i) US Revolving Loan. Each US Revolving Lender agrees,
severally and not jointly, to make available in Dollars to TPI and TPUSA from
time to time until the Commitment Termination Date its Pro Rata Share of
advances (each a "US Revolving Credit Advance") requested by US Borrower
Representative on behalf of TPI hereunder. The Pro Rata Share of the US
Revolving Loan of any US Revolving Lender (including, without duplication, Swing
Line Loans) shall not at any time exceed its separate US Revolving Loan
Commitment. US Revolving Credit Advances may be repaid and reborrowed; provided
that the amount of any US Revolving Credit Advance to be made at any time shall
not exceed US Borrowing Availability. US Borrowing Availability may be further
reduced by Reserves imposed by Administrative Agent in its reasonable credit
judgment and upon 10 days prior written notice to US Borrower Representative.
The US Revolving Loan shall be repaid in full on the Commitment Termination
Date. Except as provided in the last sentence of Section 1.7, TPI and TPUSA
shall execute and deliver to each US Revolving Lender a promissory note to
evidence the US Revolving Loan Commitment of such US Revolving Lender in the
principal amount of the US Revolving Loan Commitment of such US Revolving
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(b)(i) (each a "US Revolving Note" and, collectively, the "US Revolving
Notes"). If at any time the outstanding US Revolving Loan exceeds the US
Borrowing Base (any such excess US Revolving Loan is herein referred to
collectively as "US Overadvances"), Lenders shall not be obligated to make US
Revolving Credit Advances, no additional US Letters of Credit shall be issued
and the US Revolving Loan must be repaid immediately and US Letters of Credit
cash collateralized, in each case, in an amount sufficient to eliminate any US
Overadvances. All US Overadvances shall constitute Index Rate Loans and shall
bear interest at the Default Rate. US Revolving Credit Advances which are Index
Rate Loans may be requested in any amount. For funding requests for a US
Revolving Credit Advance equal to or greater than $5,000,000, written notice
must be provided by 1:00 p.m. (New York time) one (1) Business Day prior to the
Business Day on which such US Revolving Credit
5
Advance is to be made and for funding requests less than $5,000,000, written
notice must be provided by 1:00 p.m. (New York time) on the Business Day on
which such US Revolving Credit Advance is to be made. All US Revolving Credit
Advances which are IBOR Loans require three (3) Business Days prior written
notice. Written notices for funding requests shall be in the form attached as
Exhibit 1.1(b)(i)(A) ("Notice of US Revolving Credit Advance").
(ii) European Revolving Loan. Each European Revolving Lender
agrees, severally and not jointly, to make available in Dollars or in an
Alternative Currency to European Borrowers from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each a "European
Revolving Credit Advance") requested by European Borrower Representative on
behalf the European Borrowers hereunder. The Pro Rata Share of the European
Revolving Loan of any European Revolving Lender shall not at any time exceed its
separate European Revolving Loan Commitment. European Revolving Credit Advances
may be repaid and reborrowed; provided that the amount of any European Revolving
Credit Advance to be made at any time shall not exceed European Borrowing
Availability. The Equivalent Amount in Dollars of each European Revolving Credit
Advance shall be recalculated hereunder on each date on which it shall be
necessary to determine the European Borrowing Availability or the European
Revolving Loan Outstandings on such date. European Borrowing Availability may be
further reduced by Reserves, determined jointly by, and imposed jointly by,
Administrative Agent and European Loan Agent in their reasonable credit judgment
and upon 10 days prior written notice to European Borrower Representative. The
European Revolving Loan shall be repaid in full on the Commitment Termination
Date. Except as provided in the last sentence of Section 1.7, each European
Borrower shall execute and deliver to each European Revolving Lender a
promissory note to evidence the European Revolving Loan Commitment of such
European Revolving Lender in the principal amount of the European Revolving Loan
Commitment of such European Revolving Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(b)(ii) (each a "European Revolving
Note" and, collectively, the "European Revolving Notes"). If at any time the
outstanding European Revolving Loan exceeds the European Borrowing Base (any
such excess European Revolving Loan is herein referred to collectively as
"European Overadvances"), Lenders shall not be obligated to make European
Revolving Credit Advances, no additional European Letters of Credit shall be
issued and the European Revolving Loan must be repaid immediately and European
Letters of Credit cash collateralized, in each case, in an amount sufficient to
eliminate any European Overadvances. All European Overadvances shall constitute
an IBOR Loan having an IBOR Period of one month and shall bear interest at the
Default Rate. All IBOR Loans require three (3) Business Days prior written
notice. Written notices for funding requests shall be in the form attached as
Exhibit 1.1(b)(ii)(A) ("Notice of European Revolving Credit Advance"). A
European Revolving Credit Advance may not be drawn in an Alternative Currency if
(a) any European Revolving Lender notifies the European Funding Agent not later
than 10:00 a.m. (Local Time) on the third Business Day prior to the proposed
European Revolving Credit Advance that deposits of such Alternative Currency are
not readily available to such Lender in an amount comparable with such Lender's
Pro Rata Share of such proposed European Revolving Credit Advance; or (b) the
European Funding Agent determines after consultation with the other European
Revolving Lenders (which determination shall be conclusive) at any time prior to
10:00 a.m. (Local Time) on the date of such proposed European Revolving Credit
Advance that by reason of any change in currency availability, currency exchange
rates or exchange controls it is, or will be, impracticable for such European
Revolving Credit Advance to be made in the requested
6
Alternative Currency. In such event, the proposed European Revolving Credit
Advance shall be made in Dollars.
(c) Loans Under Existing Credit Agreement. The Credit Parties
acknowledge and agree that as of the Closing Date (i) the outstanding principal
amount of US Revolving Credit Advances under (and as defined in) the Existing
Credit Agreement equals $11,100,000 and that $6,500,000 in principal amount of
such US Revolving Credit Advances are continued as US Revolving Credit Advances
hereunder or converted into one or more US Term Loans as set forth on Schedule
1.1(c) hereto; (ii) the outstanding principal amount of European Revolving
Credit Advances under (and as defined in) the Existing Credit Agreement equals
$2,215,399.03 and that such European Revolving Credit Advances are continued as
European Revolving Credit Advances hereunder or converted into the European Term
Loan A to the extent set forth on Schedule 1.1(c) hereto; (iii) the outstanding
principal amount of the US Term Loan under (and as defined in) the Existing
Credit Agreement equals $61,400,000 and that such US Term Loan is continued as
US Term Loan A hereunder or converted into US Term Loan B to the extent set
forth on Schedule 1.1(c) hereto; (iv) the outstanding principal amount of the
European Term Loan under (and as defined in) the Existing Credit Agreement
equals $52,000,000 and that such European Term Loan is continued as the European
Term Loan A hereunder to the extent set forth on Schedule 1.1(c) hereto; (v) US
Letters of Credit are outstanding under (and as defined in) the Existing Credit
Agreement having a stated amount of $100,000.00; and (vi) European Letters of
Credit are outstanding under (and as defined in) the Existing Credit Agreement
having a stated amount of $4,233,810.56 and such European Letters of Credit are
continued as European Letters of Credit hereunder. All US Term Loan Commitments,
European Term Loan Commitments, US Revolving Loan Commitments and European
Revolving Loan Commitments under (and as defined in) the Existing Credit
Agreement shall hereinafter be assigned and re-allocated among the US Term Loan
A Commitments, US Term Loan B Commitments, European Term Loan Commitments, US
Revolving Loan Commitments and European Revolving Loan Commitments hereunder,
and after giving effect hereto, the percentages of the Commitments are as set
forth on Annex B hereto. Notwithstanding anything set forth herein to the
contrary, in order to effect the continuation of the outstanding Loans
contemplated by the preceding sentence, the amount to be funded on the Closing
Date by each Lender hereunder in respect of its Commitments shall be reduced by
the principal amount of such Lender's Loans under (and as defined in) the
Existing Credit Agreement outstanding on the Closing Date. On the Closing Date
all outstanding IBOR Loans (as defined in the Existing Credit Agreement) to the
US Borrowers to each Lender under the Existing Credit Agreement shall continue
as IBOR Loans hereunder to the extent that the Lender providing those IBOR Loans
under the Existing Credit Agreement continues to provide Loans in an equal or
greater amount hereunder. All other IBOR Loans outstanding to US Borrowers on
the Closing Date under the Existing Credit Agreement will be converted to Index
Rate Loans.
(d) Swing Line Facility.
(i) Administrative Agent shall notify the Swing Line Lender
upon Administrative Agent's receipt of any Notice of US Revolving Credit
Advance. Subject to the terms and conditions hereof, the Swing Line Lender may,
in its discretion, make available from time to time until the Commitment
Termination Date advances (each, a "Swing Line Advance") in accordance with any
such notice. The provisions of this Section 1.1(d)(i) shall not relieve US
7
Revolving Lenders of their obligations to make US Revolving Credit Advances
under Section 1.1(b)(i); provided that if the Swing Line Lender makes a Swing
Line Advance pursuant to any such notice, such Swing Line Advance shall be in
lieu of any US Revolving Credit Advance that otherwise may be made by US
Revolving Lenders pursuant to such notice. The aggregate amount of Swing Line
Advances outstanding shall not exceed at any time the lesser of (A) the Swing
Line Commitment and (B) US Borrowing Availability ("Swing Line Availability").
Until the Commitment Termination Date, TPI may from time to time borrow, repay
and reborrow under this Section 1.1(d)(i). Each Swing Line Advance shall be made
pursuant to a Notice of US Revolving Credit Advance delivered by US Borrower
Representative on behalf of TPI and TPUSA to Administrative Agent in accordance
with Section 1.1(b)(i). Unless the Swing Line Lender has received at least one
(1) Business Day's prior written notice from Requisite Lenders instructing it
not to make a Swing Line Advance, the Swing Line Lender shall, notwithstanding
the failure of any condition precedent set forth in Section 7.2 be entitled to
fund that Swing Line Advance, and to have each US Revolving Lender make US
Revolving Credit Advances in accordance with Section 1.1(d)(iii) or purchase
participating interests in accordance with Section 1.1(d)(iv). Notwithstanding
any other provision of this Agreement or the other Loan Documents, the Swing
Line Loan shall constitute an Index Rate Loan. TPI and TPUSA jointly and
severally shall repay the aggregate outstanding principal amount of the Swing
Line Loan upon demand therefor by Administrative Agent. The entire unpaid
balance of the Swing Line Loan and all other noncontingent Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date if not sooner paid in full.
(ii) TPI and TPUSA shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Such note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(d)
(the "Swing Line Note"). The Swing Line Note shall represent the obligation of
TPI to pay the amount of the Swing Line Commitment or, if less, the aggregate
unpaid principal amount of all Swing Line Advances made to TPI together with
interest thereon as prescribed in Section 1.2.
(iii) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion but no less frequently than once weekly, shall
on behalf of TPI and TPUSA (and each of TPI and TPUSA hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf) request each US
Revolving Lender (including the Swing Line Lender) to make a US Revolving Credit
Advance to TPI and TPUSA (which shall be an Index Rate Loan) in an amount equal
to that US Revolving Lender's Pro Rata Share of the principal amount of the
Swing Line Loan (the "Refunded Swing Line Loan") outstanding on the date such
notice is given. Unless any of the events described in Sections 6.1(f) and
6.l(g) has occurred (in which event the procedures of Section 1.1(d)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a US Revolving Credit Advance are then satisfied,
each US Revolving Lender shall disburse directly to Administrative Agent, its
Pro Rata Share of a US Revolving Credit Advance on behalf of the Swing Line
Lender, prior to 3:00 p.m. (New York time), in immediately available funds on
the Business Day next succeeding the date that notice is given. The proceeds of
those US Revolving Credit Advances shall be immediately paid to the Swing Line
Lender and applied to repay the Refunded Swing Line Loan.
8
(iv) If, prior to refunding a Swing Line Loan with a US
Revolving Credit Advance pursuant to Section 1.1(d)(iii), one of the events
described in Sections 6.1(f) or 6.1(g) has occurred, then, subject to the
provisions of Section l.1(d)(v) below, each US Revolving Lender shall, on the
date such US Revolving Credit Advance was to have been made for the benefit of
TPI and TPUSA, purchase from the Swing Line Lender an undivided participation
interest in the Swing Line Loan in an amount equal to its Pro Rata Share
(determined with respect to the US Revolving Loan) of such Swing Line Loan. Upon
request, each US Revolving Lender shall promptly transfer to the Swing Line
Lender, in immediately available funds, the amount of its participation
interest.
(v) Each US Revolving Lender's obligation to make US Revolving
Credit Advances in accordance with Section 1.1(d)(iii) and to purchase
participation interests in accordance with Section 1.1(d)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such US
Revolving Lender may have against the Swing Line Lender, TPI or any other Person
for any reason whatsoever; (B) the occurrence or continuance of any Default or
Event of Default; (C) any inability of TPI to satisfy the conditions precedent
to borrowing set forth in this Agreement at any time or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. Swing Line Lender shall be entitled to recover, on demand, from
each US Revolving Lender the amounts required pursuant to Sections 1.1(d)(iii)
or 1.1(d)(iv), as the case may be. If any US Revolving Lender does not make
available such amounts to Administrative Agent or the Swing Line Lender, as
applicable, the Swing Line Lender shall be entitled to recover, on demand, such
amount on demand from such US Revolving Lender, together with interest thereon
for each day from the date of non payment until such amount is paid in full at
the Federal Funds Rate for the first two Business Days and at the Index Rate
thereafter.
(e) US Letters of Credit. The US Revolving Loan Commitment may, in
addition to advances under the US Revolving Loan (including US Swing Line
Advances), be utilized, upon the request of US Borrower Representative on behalf
of TPI, for the issuance or continuation of US Letters of Credit. Immediately
upon the issuance or continuation by a US L/C Issuer of a US Letter of Credit,
and without further action on the part of Administrative Agent or any of the US
Lenders, each US Revolving Lender shall be deemed to have purchased from such US
L/C Issuer a participation in such US Letter of Credit (or in its obligation
under a risk participation agreement with respect thereto) equal to such US
Revolving Lender's Pro Rata Share of the aggregate amount available to be drawn
under such US Letter of Credit. US Letters of Credit outstanding under the
Existing Credit Agreement shall remain outstanding and shall be governed hereby.
(i) US Maximum Amount. The aggregate amount of US Letter of
Credit Obligations with respect to all US Letters of Credit outstanding at any
time shall not exceed $5,000,000 ("US L/C Sublimit").
(ii) Reimbursement. TPI shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse any US L/C Issuer on demand in
immediately available funds for any amounts paid by such US L/C Issuer with
respect to a US Letter of Credit, including all reimbursement payments,
9
fees, charges, costs and expenses paid by such US L/C Issuer. TPI hereby
authorizes and directs Administrative Agent, at Administrative Agent's option,
to debit TPI's account (by increasing the outstanding principal balance of the
US Revolving Credit Advances) in the amount of any payment made by a US L/C
Issuer with respect to any US Letter of Credit. All amounts paid by a US L/C
Issuer with respect to any US Letter of Credit that are not repaid as provided
in the first sentence hereof by TPI with the proceeds of a US Revolving Credit
Advance or otherwise shall bear interest at the interest rate applicable to the
portions of the US Revolving Loan which are Index Rate Loans plus, at the
election of Administrative Agent or Requisite Lenders, an additional two percent
(2.00%) per annum. Each US Revolving Lender agrees to fund its Pro Rata Share of
any US Revolving Loan made pursuant to this Section 1.1(e)(ii). In the event
Administrative Agent elects not to debit TPI's account and TPI fails to
reimburse the US L/C Issuer in full on the date of any payment in respect of a
US Letter of Credit, Administrative Agent shall promptly notify each US
Revolving Lender of the amount of such unreimbursed payment and the accrued
interest thereon and each US Revolving Lender, on the next Business Day prior to
3:00 p.m. (New York time), shall deliver to Administrative Agent an amount equal
to its Pro Rata Share thereof in same day funds. Each US Revolving Lender hereby
absolutely and unconditionally agrees to pay to the US L/C Issuer upon demand by
the US L/C Issuer such US Revolving Lender's Pro Rata Share of each payment made
by the US L/C Issuer in respect of a US Letter of Credit and not immediately
reimbursed TPI or satisfied through a debit of TPI's account. Each US Revolving
Lender acknowledges and agrees that its obligations pursuant to this subsection
in respect of US Letters of Credit are absolute and unconditional and shall not
be affected by any circumstance whatsoever, including setoff, counterclaim, the
occurrence and continuance of a Default or an Event of Default or any failure by
TPI to satisfy any of the conditions set forth in Section 7.2. If any US
Revolving Lender fails to make available to the US L/C Issuer the amount of such
US Revolving Lender's Pro Rata Share of any payments made by the US L/C Issuer
in respect of a US Letter of Credit as provided in this Section 1.1(e)(ii), the
US L/C Issuer shall be entitled to recover such amount on demand from such US
Revolving Lender together with interest at the Index Rate.
(iii) Request for US Letters of Credit. US Borrower
Representative shall give Administrative Agent at least two (2) Business Days
prior written notice specifying the date a US Letter of Credit is requested to
be issued, the amount and the name and address of the beneficiary and a
description of the transactions proposed to be supported thereby. If
Administrative Agent informs US Borrower Representative that the US L/C Issuer
cannot issue the requested US Letter of Credit directly, US Borrower
Representative may request that US L/C Issuer arrange for the issuance of the
requested US Letter of Credit under a risk participation agreement with another
financial institution reasonably acceptable to Administrative Agent, US L/C
Issuer and US Borrower Representative. The issuance of any US Letter of Credit
under this Agreement shall be subject to the conditions that the US Letter of
Credit (i) supports a transaction entered into in the ordinary course of
business of US Borrowers and (ii) is in a form and contains such terms and
conditions as are reasonably satisfactory to the US L/C Issuer and, in the case
of standby letters of credit, Administrative Agent. The initial notice
requesting the issuance of a US Letter of Credit shall be accompanied by the
form of the US Letter of Credit and the Master Standby Agreement or Master
Documentary Agreement, as applicable, and an application for a letter of credit,
if any, then required by the US L/C Issuer completed in a manner satisfactory to
such US L/C Issuer. If any provision of any application or reimbursement
10
agreement is inconsistent with the terms of this Agreement, then the provisions
of this Agreement, to the extent of such inconsistency, shall control.
(iv) Expiration Dates of US Letters of Credit. The expiration
date of each US Letter of Credit shall be on a date which is not later than the
earlier of (a) one year from its date of issuance or (b) the thirtieth (30/th/)
day prior to the date set forth to in clause (a) of the definition of the term
Commitment Termination Date. Notwithstanding the foregoing, a US Letter of
Credit may provide for automatic extensions of its expiration date for one (1)
or more successive one (1) year periods; provided that the US L/C Issuer has the
right to terminate such US Letter of Credit on each such annual expiration date
and no renewal term may extend the term of the US Letter of Credit to a date
that is later than the fifteenth (15/th/) day prior to the date set forth in
clause (a) of the definition of the term Commitment Termination Date. The US L/C
Issuer may elect not to renew any such US Letter of Credit and, upon direction
by Administrative Agent or Requisite Lenders, shall not renew any such US Letter
of Credit at any time during the continuance of an Event of Default; provided
that in the case of a direction by Administrative Agent or Requisite Lenders,
the US L/C Issuer receives such directions prior to the date notice of
non-renewal is required to be given by the US L/C Issuer and the US L/C Issuer
has had a reasonable period of time to act on such notice.
(v) Obligations Absolute. The obligation of TPI to reimburse
the US L/C Issuer, Administrative Agent and US Revolving Lenders for payments
made in respect of US Letters of Credit issued by the US L/C Issuer shall be
unconditional and irrevocable and shall be paid under all circumstances strictly
in accordance with the terms of this Agreement, including the following
circumstances: (a) any lack of validity or enforceability of any US Letter of
Credit; (b) any amendment or waiver of or any consent or departure from all or
any of the provisions of any US Letter of Credit or any Loan Document; (c) the
existence of any claim, set-off, defense or other right which TPI, any of its
Subsidiaries or Affiliates or any other Person may at any time have against any
beneficiary of any US Letter of Credit, any Agent, any US L/C Issuer, any Lender
or any other Person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreements or transactions; (d) any
draft or other document presented under any US 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; (e) payment under any US
Letter of Credit against presentation of a draft or other document that does not
substantially comply with the terms of such US Letter of Credit; or (f) any
other act or omission to act or delay of any kind of any US L/C Issuer, any
Agent, any Lender or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this Section 1.1(e)(v),
constitute a legal or equitable discharge of TPI's obligations hereunder.
(vi) Obligations of US L/C Issuers. Each US L/C Issuer (other
than GE Capital) hereby agrees that it will not issue a US Letter of Credit
hereunder until it has provided Administrative Agent with written notice
specifying the amount and intended issuance date of such US Letter of Credit and
Administrative Agent has returned a written acknowledgment of such notice to US
L/C Issuer. Each US L/C Issuer (other than GE Capital) further agrees to provide
to Administrative Agent: (a) a copy of each US Letter of Credit issued by such
US L/C Issuer promptly after its issuance; (b) a quarterly report summarizing
available amounts under US Letters of Credit issued by such US L/C Issuer, the
dates and amounts of any draws under such US Letters of Credit, the effective
date of any increase or decrease in the face
11
amount of any US Letters of Credit during such quarter and the amount of any
unreimbursed draws under such US Letters of Credit; and (d) such additional
information reasonably requested by Administrative Agent from time to time with
respect to the US Letters of Credit issued by such US L/C Issuer. Without
limiting the generality of the foregoing, it is expressly understood and agreed
by US Borrowers that the absolute and unconditional obligation of US Borrowers
to Administrative Agent and US Lenders hereunder to reimburse payments made
under a US Letter of Credit will not be excused by the gross negligence or
willful misconduct of the US L/C Issuer. However, the foregoing shall not be
construed to excuse a US L/C Issuer from liability to US Borrowers to the extent
of any direct damages (as opposed to consequential damages, with US Borrowers
hereby waiving all claims for any consequential damages to the extent permitted
by applicable law) suffered by US Borrowers that are subject to indemnification
under the Master Standby Agreement or the Master Documentary Agreement.
(f) European Letters of Credit. The European Revolving Loan
Commitment may, in addition to advances under the European Revolving Loan, be
utilized, upon the request of European Borrower Representative on behalf of the
applicable European Borrower, for the issuance of European Letters of Credit.
Immediately upon the issuance by a European L/C Issuer of a European Letter of
Credit or on the Closing Date in the case of European Letters of Credit
outstanding under the Existing Credit Agreement, and without further action on
the part of European Loan Agent, European Funding Agent or any of the European
Lenders, each European Revolving Lender shall be deemed to have purchased from
such European L/C Issuer a participation in such European Letter of Credit (or
in its obligation under a risk participation agreement with respect thereto)
equal to such European Revolving Lender's Pro Rata Share of the aggregate amount
available to be drawn under such European Letter of Credit. European Letters of
Credit outstanding under the Existing Credit Agreement shall remain outstanding
and shall be governed hereby.
(i) European Maximum Amount. The aggregate amount of European
Letter of Credit Obligations with respect to all European Letters of Credit
outstanding at any time shall not exceed the Equivalent Amount of $10,000,000
("European L/C Sublimit").
(ii) Reimbursement. European Borrowers shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse any European L/C Issuer on demand in
immediately available funds for any amounts paid by such European L/C Issuer
with respect to a European Letter of Credit, including all reimbursement
payments, fees, charges, costs and expenses paid by such European L/C Issuer.
European Borrowers hereby authorize and direct European Loan Agent, at European
Loan Agent's option, to debit European Borrowers' account (by increasing the
outstanding principal balance of the European Revolving Credit Advances) in the
amount of any payment made by a European L/C Issuer with respect to any European
Letter of Credit. All amounts paid by a European L/C Issuer with respect to any
European Letter of Credit that are not repaid as provided in the first sentence
hereof by European Borrowers with the proceeds of a European Revolving Credit
Advance or otherwise shall bear interest at the interest rate applicable to the
European Revolving Loan plus, at the election of Administrative Agent or
Requisite Lenders, an additional two percent (2.00%) per annum. Each European
Revolving Lender agrees to fund its Pro Rata Share of any European Revolving
Loan made pursuant to this Section 1.1(f)(ii). In the event European Loan Agent
elects not to instruct European Funding Agent to debit European
12
Borrowers' account and European Borrowers fail to reimburse the European L/C
Issuer in full on the date of any payment in respect of a European Letter of
Credit, European Loan Agent shall promptly notify each European Revolving Lender
of the amount of such unreimbursed payment and the accrued interest thereon and
each European Revolving Lender, on the next Business Day prior to 3:00 p.m.
(Local Time), shall deliver to European Funding Agent an amount equal to its Pro
Rata Share thereof in same day funds. Each European Revolving Lender hereby
absolutely and unconditionally agrees to pay to the European L/C Issuer upon
demand by the European L/C Issuer such European Revolving Lender's Pro Rata
Share of each payment made by the European L/C Issuer in respect of a European
Letter of Credit and not immediately reimbursed by European Borrowers or
satisfied through a debit of European Borrowers account. Each European Revolving
Lender acknowledges and agrees that its obligations pursuant to this subsection
in respect of European Letters of Credit are absolute and unconditional and
shall not be affected by any circumstance whatsoever, including setoff,
counterclaim, the occurrence and continuance of a Default or an Event of Default
or any failure by European Borrowers to satisfy any of the conditions set forth
in Section 7.2. If any European Revolving Lender fails to make available to the
European L/C Issuer the amount of such European Revolving Lender's Pro Rata
Share of any payments made by the European L/C Issuer in respect of a European
Letter of Credit as provided in this Section 1.1(f)(ii), the European L/C Issuer
shall be entitled to recover such amount on demand from such European Revolving
Lender together with interest at the IBOR Rate with an IBOR Period of one month.
(iii) Request for European Letters of Credit. European Borrower
Representative shall give European Loan Agent, European Funding Agent and
European L/C Issuer at least three (3) Business Days prior written notice
specifying the date a European Letter of Credit is requested to be issued, the
amount and the name and address of the beneficiary and a description of the
transactions proposed to be supported thereby in the form set forth as Exhibit
1.1(f)(iii). If European Loan Agent informs European Borrower Representative
that the European L/C Issuer cannot issue the requested European Letter of
Credit directly, European Borrower Representative may request that European L/C
Issuer arrange for the issuance of the requested European Letter of Credit under
a risk participation agreement with another financial institution reasonably
acceptable to European Loan Agent, European L/C Issuer and European Borrower
Representative. The issuance of any European Letter of Credit under this
Agreement shall be subject to the conditions that the European Letter of Credit
(i) supports a transaction entered into in the ordinary course of business of
European Borrowers and (ii) is in a form and contains such terms and conditions
as are reasonably satisfactory to the European L/C Issuer and, in the case of
standby letters of credit, European Loan Agent. The initial notice requesting
the issuance of a European Letter of Credit shall be accompanied by the form of
the European Letter of Credit and an application for a letter of credit, if any,
then required by the European L/C Issuer completed in a manner satisfactory to
such European L/C Issuer and European Loan Agent. If any provision of any
application or reimbursement agreement is inconsistent with the terms of this
Agreement, then the provisions of this Agreement, to the extent of such
inconsistency, shall control.
(iv) Expiration Dates of European Letters of Credit. The
expiration date of each European Letter of Credit shall be on a date which is
not later than the earlier of (a) one year from its date of issuance or (b) the
thirtieth (30/th/) day prior to the date set forth in clause (a) of the
definition of the term Commitment Termination Date. Notwithstanding the
13
foregoing, a European Letter of Credit may provide for automatic extensions of
its expiration date for one (1) or more successive one (1) year periods;
provided that the European L/C Issuer has the right to terminate such European
Letter of Credit on each such annual expiration date and no renewal term may
extend the term of the European Letter of Credit to a date that is later than
the fifteenth (15/th/) day prior to the date set forth in clause (a) of the
definition of the term Commitment Termination Date. The European L/C Issuer may
elect not to renew any such European Letter of Credit and, upon direction by
Administrative Agent, European Loan Agent or Requisite Lenders, shall not renew
any such European Letter of Credit at any time during the continuance of an
Event of Default; provided that in the case of a direction by Administrative
Agent, European Loan Agent or Requisite Lenders, the European L/C Issuer
receives such directions prior to the date notice of non-renewal is required to
be given by the European L/C Issuer and the European L/C Issuer has had a
reasonable period of time to act on such notice.
(v) Obligations Absolute. The obligation of European Borrowers
to reimburse the European L/C Issuer, European Loan Agent, European Funding
Agent and European Revolving Lenders for payments made in respect of European
Letters of Credit issued by the European L/C Issuer shall be unconditional and
irrevocable and shall be paid under all circumstances strictly in accordance
with the terms of this Agreement, including the following circumstances: (a) any
lack of validity or enforceability of any European Letter of Credit; (b) any
amendment or waiver of or any consent or departure from all or any of the
provisions of any European Letter of Credit or any Loan Document; (c) the
existence of any claim, set-off, defense or other right which European
Borrowers, any of their Subsidiaries or Affiliates or any other Person may at
any time have against any beneficiary of any European Letter of Credit, any
Agent, any European L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft or other document presented
under any European 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; (e) payment under any European Letter of Credit against
presentation of a draft or other document that does not substantially comply
with the terms of such European Letter of Credit; or (f) any other act or
omission to act or delay of any kind of any European L/C Issuer, any Agent, any
Lender or any other Person or any other event or circumstance whatsoever that
might, but for the provisions of this Section 1.1(f)(v), constitute a legal or
equitable discharge of European Borrowers' obligations hereunder.
(vi) Obligations of European L/C Issuers. Each European L/C
Issuer hereby agrees that it will not issue a European Letter of Credit
hereunder until it has provided European Loan Agent with written notice
specifying the amount and intended issuance date of such European Letter of
Credit and European Loan Agent has returned a written acknowledgment of such
notice to European L/C Issuer. Each European L/C Issuer further agrees to
provide to European Loan Agent and European Funding Agent: (a) a copy of each
European Letter of Credit issued by such European L/C Issuer promptly after its
issuance; (b) on a change occurring to amounts under European Letters of Credit
the European L/C Issuer shall promptly notify the European Loan Agent of the
change, (c) a quarterly report summarizing available amounts under European
Letters of Credit issued by such European L/C Issuer, the effective date of any
increase or decrease in the face amount of any European Letters of Credit during
such week and the amount of any unreimbursed draws under such European Letters
of Credit; and (d) such additional information reasonably requested by European
Loan Agent from
14
time to time with respect to the European Letters of Credit issued by such
European L/C Issuer. European L/C Issuer shall notify European Loan Agent and
European Funding Agent within one (1) Business Day following any draw under a
European Letter of Credit. Without limiting the generality of the foregoing, it
is expressly understood and agreed by European Borrowers that the absolute and
unconditional obligation of European Borrowers to European Loan Agent, European
Funding Agent and European Lenders hereunder to reimburse payments made under a
European Letter of Credit will not be excused by the gross negligence or willful
misconduct of the European L/C Issuer. European Borrowers hereby waive all
claims for any consequential damages or any other damages, other than direct
damages, to the extent permitted by applicable law.
(g) Letter of Credit Sublimits. US Letters of Credit may only be used
for the business and operations of the US Credit Parties and Designated US Cash
Management Credit Parties and (ii) European Letters of Credit may only be used
for the business and operations of the European Credit Parties.
(h) Funding Authorization.
(i) The proceeds of all US Revolving Credit Advances made
pursuant to this Agreement subsequent to the Closing Date are to be funded by
Administrative Agent by wire transfer to the account designated by US Borrower
Representative below (the "US Disbursement Account"):
Bank: Fifth Third Bank
ABA No.: 000000000
Bank Address: 000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Account No.: 00000000
Reference: Tempur-Pedic, Inc.
US Borrower Representative shall provide Administrative Agent with written
notice of any change in the foregoing instructions at least three (3) Business
Days before the desired effective date of such change.
(ii) The proceeds of all European Revolving Credit Advances
made pursuant to this Agreement subsequent to the Closing Date are to be funded
by European Funding Agent by wire transfer to the account designated by European
Borrower Representative below (the "European Disbursement Account"):
Bank: Nordea Bank Danmark A/S
SWIFT No.: XXXXXXXXXXX
Bank Address: Xxxxxxxxxxxxx 00
XX 0000 Xxxxxxx Xxxxxxx
Account No.: 2213 6264367830
Reference: Xxx-Foam ApS
15
European Borrower Representative shall provide European Loan Agent and European
Funding Agent with written notice of any change in the foregoing instructions at
least three (3) Business Days before the desired effective date of such change.
1.2 Interest and Applicable Margins.
(a) Borrowers shall pay interest to Appropriate Agent, as specified
below, for the ratable benefit of Lenders, in accordance with the various Loans
being made by each Lender, in arrears on each applicable Interest Payment Date,
at the following rates: (i) with respect to the US Revolving Credit Advances
which are designated as Index Rate Loans (and for all other Obligations not
otherwise set forth below), to Administrative Agent, the Index Rate plus the
Applicable Revolver Index Margin per annum or, with respect to US Revolving
Credit Advances which are designated as IBOR Loans, at the election of US
Borrower Representative, the applicable IBOR Rate plus the Applicable Revolver
IBOR Margin per annum; (ii) with respect to the European Revolving Credit
Advances, to the European Funding Agent, the applicable IBOR Rate plus the
Applicable Revolver IBOR Margin per annum plus any Mandatory Costs; (iii) with
respect to such portion of the US Term Loan A designated as an Index Rate Loan,
to the Administrative Agent, the Index Rate plus the Applicable Term Loan A
Index Margin per annum or, with respect to such portion of the US Term Loan A
designated as an IBOR Loan, at the election of US Borrower Representative, the
applicable IBOR Rate plus the Applicable Term Loan A IBOR Margin per annum; (iv)
with respect to such portion of the US Term Loan B designated as an Index Rate
Loan, to the Administrative Agent, the Index Rate plus the Applicable Term Loan
B Index Margin per annum or, with respect to such portion of the US Term Loan B
designated as an IBOR Loan, at the election of US Borrower Representative, the
Applicable IBOR Rate plus the Applicable Term Loan B IBOR Margin per annum; (v)
with respect to the European Term Loan A, to the European Funding Agent, the
applicable IBOR Rate plus the Applicable Term Loan A IBOR Margin per annum plus
any Mandatory Costs; and (vi) with respect to the Swing Line Loan, to the
Administrative Agent, the Index Rate plus the Applicable Revolver Index Margin
per annum.
The Applicable Margins will be as follows:
Applicable Revolver Index Margin 1.50%
Applicable Revolver IBOR Margin 3.25%
Applicable Term Loan A Index Margin 1.50%
Applicable Term Loan A IBOR Margin 3.25%
Applicable Term Loan B Index Margin 1.75%
Applicable Term Loan B IBOR Margin 3.50%
The Applicable Margins shall be adjusted (up or down) prospectively on
a quarterly basis as determined by Ultimate Holdco's, Borrowers' and their
Subsidiaries' consolidated financial performance, commencing with the first day
of the first calendar month that occurs more than one (1) day after delivery of
Ultimate Holdco's audited Financial Statements to Lenders for the Fiscal Year
ending December 31, 2003. Adjustments in the Applicable Margins will be
determined by reference to the following grids:
16
----------------------------------------------------------------
If Leverage Ratio is: Level of Applicable Margins:
----------------------------------------------------------------
** 3.50 Level I
----------------------------------------------------------------
*** 3.50, but ** 3.00 Level II
----------------------------------------------------------------
*** 3.00 Level III
----------------------------------------------------------------
-----------------------------------------------------------------------------
Applicable Margins Level I Level II Level III
-----------------------------------------------------------------------------
Applicable Revolver IBOR Margin 3.25% 3.00% 3.00%
-----------------------------------------------------------------------------
Applicable Term A Loan IBOR Margin 3.25% 3.00% 3.00%
-----------------------------------------------------------------------------
Applicable Term B Loan IBOR Margin 3.50% 3.25% 3.00%
-----------------------------------------------------------------------------
Applicable Revolver Index Margin 1.50% 1.25% 1.25%
-----------------------------------------------------------------------------
Applicable Term A Loan Index Margin 1.50% 1.25% 1.25%
-----------------------------------------------------------------------------
Applicable Term B Loan Index Margin 1.75% 1.50% 1.25%
-----------------------------------------------------------------------------
All adjustments in the foregoing Applicable Margins after December 31,
2003 shall be implemented quarterly on a prospective basis, commencing on the
first day of the calendar month following the date of delivery to Lenders of the
quarterly unaudited Financial Statements evidencing the need for an adjustment;
provided that such calendar month commences at least 3 Business Days after the
date of delivery of such Financial Statements. In the event the calendar month
following the date of delivery to Lenders of the Financial Statements commences
within 3 Business Days of such delivery, all adjustments shall commence on the
first day of the calendar month next following such date of delivery.
Concurrently with the delivery of those Financial Statements, the US Borrower
Representative shall deliver to Authorized Agents a certificate, signed by its
chief financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to deliver
such Financial Statements within 2 Business Days after the day required for such
delivery pursuant to Section 4.6(a) shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the sixth Business
Day following the delivery of those Financial Statements demonstrating that such
an increase is not required. If any Event of Default has occurred and is
continuing at the time any reduction in the Applicable Margins is to be
implemented, that reduction shall be deferred until the sixth Business Day
following the date on which all Events of Default are waived or cured. If the
Applicable Margins have been adjusted downward based upon Ultimate Holdco's
unaudited quarterly Financial Statements for any Fiscal Quarter and it is later
determined by Administrative Agent based upon Ultimate Holdco's audited
Financial Statements for the Fiscal Year in which such Fiscal Quarter occurs
that (i) such unaudited quarterly Financial Statements for such Fiscal Quarter
have been adjusted in connection with the preparation of such audited Financial
Statement (the "Adjusted Quarterly Financial Statements"), and (ii) such
downward adjustment in the Applicable Margins would not have been made had the
Adjusted Quarterly Financial Statements been used to so adjust the Applicable
Margins, then each Borrower shall pay to Appropriate Agent, for the account of
the Lenders, within five (5) Business Days of such determination, such
additional interest on the Loans that would have been payable hereunder had the
Applicable Margin been adjusted (or not adjusted) on the basis of the Adjusted
Quarterly Financial Statements.
** = Greater Than
*** = Less than or equal to
17
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of IBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest at the IBOR Rate shall be made by Appropriate Agent on the basis of a
360-day year (or a 365-day year, in the case of Loans denominated in British
pounds (or any other Alternative Currency where market practice so requires)),
in each case for the actual number of days occurring in the period for which
such Fees and interest are payable. All computations of interest at the Index
Rate shall be made by Administrative Agent on the basis of a 365-day or 366-day
year, as applicable. The Index Rate is a floating rate determined for each day.
Each determination by Appropriate Agent of an interest rate and Fees hereunder
shall be final, binding and conclusive on Borrowers, absent manifest error.
(d) (i) So long as an Event of Default has occurred and is continuing
under Section 6.1(f) or (g) and without notice of any kind, or (ii) so long as
any other Event of Default under Section 6.1(a) or under Section 6.1(c) (in the
latter case, as of a result of a breach of any of Sections 4.1 through 4.5) has
occurred and is continuing and at the election of Administrative Agent (or upon
the written request of Requisite Lenders) confirmed by written notice from
Administrative Agent to each Borrower Representative (with a copy to European
Loan Agent and European Funding Agent), the interest rates applicable to the
Loans and the Letter of Credit Fees shall be increased by two percentage points
(2%) per annum above the rates of interest or the rate of such Fees otherwise
applicable hereunder ("Default Rate"), and all outstanding Obligations shall
bear interest at the Default Rate applicable to such Obligations. Interest and
Letter of Credit Fees at the Default Rate shall accrue (i) from the initial date
of such Event of Default in the case of an Event of Default that has occurred
and is continuing under Section 6.1(f) or (g) and (ii) from the date of such
notice of election, in the case of an Event of Default under Section 6.1(a) or
under Section 6.1(c) (in the latter case, as a result of a breach of any of
Sections 4.1 through 4.5), and in each case shall continue to accrue until that
Event of Default is cured or waived and shall be payable upon demand, but in any
event, shall be payable on the next regularly scheduled payment date set forth
herein for such Obligation.
(e) Upon the earlier to occur of (i) receipt by US Borrower
Representative of notice from Administrative Agent of the availability of IBOR
Loans or (ii) the date which is fifteen (15) days after the Closing Date and
upon three (3) Business Days prior notification to the Administrative Agent, US
Borrower Representative may convert all or any part of the outstanding Loans
made to the US Borrowers on the Closing Date as Index Rate Loans to IBOR Loans
subject to the requirements of this Section 1.2(e). US Borrower Representative
shall have the option, subject to the preceding sentence, to (1) convert at any
time all or any part of outstanding US Revolving Credit Advances (other than the
Swing Line Loan) and US Term Loans from Index Rate Loans to IBOR Loans, (2)
convert all or any part of outstanding US Revolving Credit Advances (other than
the Swing Line Loan) and US Term Loans from IBOR Loans to Index Rate Loans,
subject to payment of the IBOR Breakage Fee in accordance with Section 1.3(d) if
such conversion is made prior to the expiration of the IBOR Period applicable
thereto, or (3) continue all or any portion of any US Revolving Credit Advances
(other than the Swing Line Loan) and US Term Loans as an IBOR Loan upon the
expiration of the applicable
18
IBOR Period and the succeeding IBOR Period of that continued Loan shall commence
on the first day after the last day of the IBOR Period of the Loan to be
continued. European Borrower Representative shall have the option to continue
all or any portion of any European Revolving Credit Advances and European Term
Loan A as an IBOR Loan upon the expiration of the applicable IBOR Period and the
succeeding IBOR Period of that continued Loan shall commence on the first day
after the last day of the IBOR Period of the Loan to be continued. Any Loan or
group of Loans having the same proposed IBOR Period to be made or continued as,
or converted into, an IBOR Loan must be in a minimum amount of $500,000 (or the
Equivalent Amount in an Alternative Currency) and integral multiples of $100,000
(or the Equivalent Amount in an Alternative Currency) in excess of such amount.
Any such election must be made by 11:00 a.m. (Local Time) on the 3/rd/ Business
Day prior to (1) the date of any proposed Revolving Credit Advance which is to
bear interest at the IBOR Rate, (2) the end of each IBOR Period with respect to
any IBOR Loans to be continued as such, or (3) the date on which US Borrower
Representative wishes to convert any Index Rate Loan to an IBOR Loan for an IBOR
Period designated by US Borrower Representative in such election. If no election
is received with respect to all or any portion of any US Revolving Credit
Advances or the US Term Loans that are an IBOR Loan by 11:00 a.m. (New York
time) on the 3/rd/ Business Day prior to the end of the IBOR Period with respect
thereto, that IBOR Loan shall be converted to an Index Rate Loan at the end of
its IBOR Period. If no election is received with respect to all or any portion
of any European Revolving Credit Advances or the European Term Loan A that is an
IBOR Loan by 11:00 a.m. (Local Time) on the 3/rd/ Business Day prior to the end
of the IBOR Period with respect thereto, that IBOR Loan shall be converted to an
IBOR Loan having an IBOR Period of one month at the end of its IBOR Period. US
Borrower Representative must make such election by notice to Administrative
Agent in writing, by fax or overnight courier. European Borrower Representative
must make such election by notice to European Funding Agent in writing, by fax
or overnight courier. In the case of any conversion or continuation, such
election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.2(e). No US Revolving Credit
Advance or US Term Loan shall be made, converted into or continued as an IBOR
Loan, if an Event of Default has occurred and is continuing and Administrative
Agent or Requisite Lenders have determined not to make, convert or continue any
such Loan as an IBOR Loan as a result thereof.
(f) Notwithstanding anything to the contrary set forth in this
Section 1.2(f) with respect to the US Revolving Loan and the US Term Loan, if a
court of competent jurisdiction determines in a final order that the rate of
interest payable hereunder exceeds the highest rate of interest permissible
under law (the "Maximum Lawful Rate"), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrowers shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Administrative Agent, on
behalf of Lenders, is equal to the total interest that would have been received
had the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in Sections 1.2(a) through (e),
unless and until the rate of interest again exceeds the Maximum Lawful Rate, and
at that time this paragraph shall again apply. In no event shall the total
interest received by any Lender pursuant to the terms hereof exceed the amount
that such Lender could
19
lawfully have received had the interest due hereunder been calculated for the
full term hereof at the Maximum Lawful Rate. If the Maximum Lawful Rate is
calculated pursuant to this paragraph, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in the
year in which such calculation is made. If, notwithstanding the provisions of
this Section 1.2(f), a court of competent jurisdiction shall determine by a
final, non-appealable order that a Lender has received interest hereunder in
excess of the Maximum Lawful Rate, Administrative Agent shall, to the extent
permitted by applicable law, promptly apply such excess as specified in Section
1.5(e) and thereafter shall refund any excess to Borrowers or as such court of
competent jurisdiction may otherwise order.
1.3 Fees.
(a) Fee Letters. Borrowers shall pay to GE Capital and GE ELF,
individually, the fees specified in that certain fee letter dated as of July 24,
2003, among Borrowers, GE Capital and GE ELF (the "GE Capital Fee Letter"), at
the times specified for payment therein, and shall otherwise comply with all of
the terms thereof. US Borrowers shall pay to LBI, individually, the fees
specified in that certain fee letter dated as of July 24, 2003 among LBI, LCPI
and the Borrowers (the "LBI Fee Letter"), at the times specified for payment
therein, and shall otherwise comply with all of the terms thereof. European
Borrowers shall pay to Nordea, individually, the fees specified in that certain
fee letter dated as of July 24, 2003 among the European Borrowers and Nordea
(the "Nordea Fee Letter"), at the times specified for payment therein, and shall
otherwise comply with all of the terms thereof.
(b) Unused Line Fee. As additional compensation for the US Revolving
Lenders, US Borrowers shall pay to Administrative Agent, for the ratable benefit
of such Lenders, in arrears, on the first Business Day of each January, April,
July and October of each year prior to the Commitment Termination Date and on
the Commitment Termination Date, a Fee for US Borrowers' non-use of available
funds during the immediately preceding quarter (or with respect to the Fee
payable on: (i) the first Business Day of October 2003, during the period
commencing on the Closing Date and ending on and including September 30, 2003,
or (ii) the Commitment Termination Date, during the period commencing the first
day of the quarter in which the Commitment Termination Date occurs and ending on
and including the Commitment Termination Date), which Fee for each day in such
period shall equal: (x) one-half of one percent (0.50%) (the "Applicable Unused
Line Fee Margin") divided by 360 multiplied by (y) the difference between (1)
the US Maximum Amount for such day and (2) the closing balance of the aggregate
US Revolving Loan Outstandings for such day; provided that if the average of the
closing balances of the US Revolving Loan Outstandings for each day during such
period is less than 50% of the US Revolving Loan Commitment, the Applicable
Unused Line Fee Margin shall be increased to three-quarters of one percent
(0.75%) for the applicable period. As additional compensation for the European
Revolving Lenders, European Borrowers shall pay to European Funding Agent, for
the ratable benefit of such Lenders, in arrears, on the first Business Day of
each January, April, July and October of each year prior to the Commitment
Termination Date and on the Commitment Termination Date, a Fee for European
Borrowers' non-use of available funds during the immediately preceding
three-month period (or with respect to the Fee payable on: (i) the first
Business Day of October 2003, during the period commencing on the Closing Date
and ending on and including September 30, 2003, or (ii) the Commitment
Termination Date, during the period commencing the first day of the quarter in
which the
20
Commitment Termination Date occurs and ending on and including the Commitment
Termination Date), which Fee for each day in such period shall equal: (x) the
Applicable Unused Line Fee Margin divided by 360 multiplied by (y) the
difference between (1) the European Maximum Amount for such day and (2) the
Equivalent Amount in Dollars of the closing balance of the aggregate European
Revolving Loan Outstandings for such day; provided that if the average of the
Equivalent Amount in Dollars of the closing balances of the European Revolving
Loan Outstandings for each day during such period is less than 50% of the
European Revolving Loan Commitment, the Applicable Unused Line Fee Margin shall
be increased to three-quarters of one percent (0.75%) for the applicable period.
(c) Letter of Credit Fees.
(i) US Letter of Credit Fees. US Borrowers agree to pay to
Administrative Agent for the benefit of US Revolving Lenders, as compensation to
such US Revolving Lenders for US Letter of Credit Obligations incurred
hereunder, (i) all costs and expenses incurred by Administrative Agent or any
Lender on account of such US Letter of Credit Obligations, and (ii) for each day
during which any US Letter of Credit Obligation shall remain outstanding, a fee
(the "US Letter of Credit Fee") in respect of each US Letter of Credit in an
amount equal to the Applicable Revolver IBOR Margin from time to time in effect,
multiplied by the maximum amount available from time to time to be drawn under
such US Letter of Credit. Such fee shall be paid to Administrative Agent for the
benefit of the US Revolving Lenders in arrears, on the first Business Day of
each January, April, July and October and on the Commitment Termination Date. In
addition, US Borrowers shall pay to any US L/C Issuer, on demand, such fees
(including all per annum fees), charges and expenses of such US L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of all US Letters of Credit issued by it or otherwise payable pursuant
to the applications and related documentation under which such US Letters of
Credit are issued.
(ii) European Letter of Credit Fees. European Borrowers agree
to pay to European Funding Agent for the benefit of European Revolving Lenders,
as compensation to such European Revolving Lenders for European Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by European
Loan Agent, European Funding Agent, the European L/C Issuer or any Lender on
account of such European Letter of Credit Obligations, and (ii) for each day
during which any European Letter of Credit Obligation shall remain outstanding,
a fee (the "European Letter of Credit Fee") in respect of each European Letter
of Credit in an amount equal to the Applicable Revolver IBOR Margin from time to
time in effect, multiplied by the maximum amount available from time to time to
be drawn under such European Letter of Credit. Such fee shall be paid to
European Funding Agent for the benefit of the European Revolving Lenders in
arrears, on the first Business Day of each January, April, July and October and
on the Commitment Termination Date. In addition, European Borrowers shall pay to
any European L/C Issuer, on demand, such fees (including all per annum fees),
charges and expenses of such European L/C Issuer in respect of the issuance,
negotiation, acceptance, amendment, transfer and payment of all European Letters
of Credit or otherwise payable pursuant to the applications and related
documentation under which such European Letters of Credit are issued.
21
(d) IBOR Breakage Fee. Upon (i) any default by any US Borrower in
making any borrowing of, conversion into or continuation of any IBOR Loan
following US Borrower Representative's delivery to Administrative Agent of any
IBOR Loan request in respect thereof or (ii) any payment of an IBOR Loan on any
day that is not the last day of the IBOR Period applicable thereto (regardless
of the source of such prepayment and whether voluntary, by acceleration or
otherwise), US Borrowers shall pay Administrative Agent, for the benefit of all
Lenders that funded or were prepared to fund any such IBOR Loan, the IBOR
Breakage Fee. Upon (i) any default by any European Borrower in making any
borrowing of, conversion into or continuation of any IBOR Loan following
European Borrower Representative's delivery to European Loan Agent of any IBOR
Loan request in respect thereof or (ii) any payment of an IBOR Loan on any day
that is not the last day of the IBOR Period applicable thereto (regardless of
the source of such prepayment and whether voluntary, by acceleration or
otherwise), European Borrowers shall pay European Funding Agent, for the benefit
of all Lenders that funded or were prepared to fund any such IBOR Loan, the IBOR
Breakage Fee.
(e) Expenses and Attorneys' Fees. Borrowers agree to promptly pay all
reasonable fees, charges, costs and expenses (including reasonable attorneys'
fees and expenses and (without duplication) the allocated cost of internal legal
staff) incurred by each Authorized Agent in connection with any matters
contemplated by or arising out of the Loan Documents, in connection with the
examination, review, due diligence investigation, documentation, negotiation,
closing and syndication of the transactions contemplated herein and in
connection with the continued administration of the Loan Documents including any
amendments, modifications, consents and waivers. Borrowers agree to promptly pay
reasonable documentation charges assessed by each Authorized Agent for
amendments, waivers, consents and any of the documentation prepared by any
Authorized Agent (including reasonable attorneys' fees and expenses and the
allocated cost of internal legal staff). Borrowers agree to promptly pay all
fees, charges, costs and expenses (including fees, charges, costs and expenses
of attorneys, external auditors (out-of-pocket costs, including fees and
expenses), internal auditors ($750 per audit day per in-house auditor plus
out-of-pocket expenses), appraisers, consultants and advisors and the allocated
cost of internal legal staff) incurred by any Authorized Agent in connection
with any Event of Default, work-out or action to enforce any Loan Document or to
collect any payments due from Borrowers or any other Credit Party. In addition,
in connection with any work-out or action to enforce any Loan Document or to
collect any payments due from Borrowers or any other Credit Party, Borrowers
agree to promptly pay all fees, charges, costs and expenses incurred by Lenders
for one (1) counsel acting for all Lenders other than Agents. All fees, charges,
costs and expenses for which Borrowers are responsible under this Section 1.3(e)
shall be deemed part of the Obligations when incurred, payable upon demand or in
accordance with Section 1.4(d) and secured by the Collateral.
1.4 Payments.
(a) Payments to Administrative Agent. All payments by US Borrowers of
the Obligations shall be without deduction, defense, setoff or counterclaim and
shall be made in same day funds and delivered to Administrative Agent, for the
benefit of Agents and Lenders, as applicable, by wire transfer to the following
account or such other place as Administrative Agent may from time to time
designate in writing.
22
ABA No. 021 001 033
Account Number 502 328 54
Deutsche Bank Trust Company Americas
New York, New York
ACCOUNT NAME: GECC/CAF DEPOSITORY
Reference: CFN4927
(b) Payments to European Loan Agent. All payments by European
Borrowers of the Obligations shall be without deduction, defense, setoff or
counterclaim and shall be made in same day funds and delivered to European Loan
Agent, at its account with European Funding Agent for the benefit of Agents and
European Lenders, as applicable, by wire transfer to the following account or
such other place as European Loan Agent may from time to time designate in
writing.
In Dollars:
Pay to: HSBC Bank USA, New York
SWIFT: XXXXXX00
Account Name: HSBC Bank plc, London
SWIFT: XXXXXX00
Account Number: 000023868
Reference: DFSAS/GE Capital/Tempur
In Alternative Currencies:
Pay to: HSBC Bank plc, London
SWIFT: XXXXXX00
Account Name: HSBC Bank plc, London
SWIFT: XXXXXX00
Account Number: 00000000
Reference: DFSAS/GE Capital/Tempur
(c) Receipt of Payments; Currency. Borrowers shall receive credit on
the day of receipt for funds received by the Appropriate Agent by 2:00 p.m.
(Local Time). In the absence of timely receipt, such funds shall be deemed to
have been paid on the next Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment may be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the amount of interest and Fees due
hereunder. Subject to the provisions of Section 9.22, all European Revolving
Credit Advances hereunder denominated in an Alternative Currency shall be made,
and all payments hereunder or under any other Loan Document in respect thereof
(whether of principal, interest, Fees or otherwise) shall be made, in such
Alternative Currency. All US Revolving Credit Advances, the US Term Loans the
European Term Loan A, and all European Revolving Credit Advances hereunder
denominated in Dollars, shall be made, and all payments hereunder or under any
other Loan Document in respect thereof (whether of principal, interest, Fees or
otherwise) shall be made, in Dollars. That portion of the European Term Loan A
denominated in Euros shall be made, and all payments hereunder or under any
other Loan Document in respect thereof
23
(whether of principal, interest, fees or otherwise) shall be made, in Euros.
Unless otherwise agreed by the applicable Borrower and each Lender and each
Authorized Agent to receive any such payment and except as otherwise provided
above in this Section 1.4(c) all other amounts due hereunder or under any other
Loan Document shall be payable in Dollars.
(d) Revolving Credit Advances. Administrative Agent is authorized to,
and at its sole election may, charge to the US Revolving Loan balance or Swing
Line Loan balance on behalf of each US Borrower and cause to be paid all Fees,
expenses, Charges, costs (including insurance premiums in accordance with
Section 2.2) and interest and Scheduled Installments and Letter of Credit
reimbursement obligations and any amounts required to be deposited with respect
to outstanding Letter of Credit Obligations pursuant to Section 6.3 other than
principal of the US Revolving Loan, owing by US Borrowers under this Agreement
or any of the other Loan Documents if and to the extent US Borrowers fail to pay
promptly any such amounts as and when due, even if the amount of such charges
would exceed US Borrowing Availability at such time. At Administrative Agent's
option and to the extent permitted bylaw, any charges so made shall constitute a
US Revolving Credit Advance hereunder. European Funding Agent at the direction
of the European Loan Agent, shall, charge to the European Revolving Loan balance
on behalf of each European Borrower and cause to be paid all Fees, expenses,
Charges, costs (including insurance premiums in accordance with Section 2.2) and
interest and Scheduled Installments and Letter of Credit reimbursement
obligations and any amounts required to be deposited with respect to outstanding
Letter of Credit Obligations pursuant to Section 6.3 other than principal of the
European Revolving Credit Advances, owing by European Borrowers under this
Agreement or any of the other Loan Documents if and to the extent European
Borrowers fail to pay promptly any such amounts as and when due, even if the
amount of such charges would exceed European Borrowing Availability at such
time. At Administrative Agent's option and to the extent permitted by law, any
charges so made shall constitute a European Revolving Credit Advance hereunder.
1.5 Prepayments.
(a) Voluntary Prepayments of Loans. TPUSA may at any time on at least
3 Business Days' prior written notice by TPUSA to Administrative Agent
voluntarily prepay all or part of the US Term Loans; provided that any such
prepayments shall be in a minimum amount of $3,000,000 and integral multiples of
$500,000 in excess of such amount. DF may at any time on at least 3 Business
Days' prior written notice by DF to the Administrative Agent, European Funding
Agent and the European Loan Agent voluntarily prepay all or part of the European
Term Loan A; provided that any such prepayments shall be in a minimum amount of
$3,000,000 and integral multiples of $500,000 in excess of such amount.
Notwithstanding the foregoing, TPUSA and DF may at any time on at least 3
Business Days' prior written notice by Borrower Representative to Administrative
Agent, European Funding Agent and the European Loan Agent voluntarily prepay all
or part of each of the US Term Loans and the European Term Loan A; provided that
any such prepayments shall be in a minimum amount of $4,000,000, in the
aggregate, and integral multiples of $500,000 in excess of such amount. TPI may
at any time on at least 3 Business Days' prior written notice to Administrative
Agent permanently reduce (but not terminate) the US Revolving Loan Commitment;
provided that (A) any such prepayments shall be in a minimum amount of
$5,000,000 and integral multiples of $500,000 in excess of such amount, (B) the
US Revolving Loan Commitment shall not be reduced to an amount less
24
than $5,000,000, and (C) after giving effect to such reductions, TPI shall
comply with Section 1.1(b)(i). European Borrowers may at any time on at least 3
Business Days' prior written notice by DF to the Administrative Agent, European
Funding Agent and the European Loan Agent permanently reduce (but not terminate)
the European Revolving Loan Commitment; provided that (A) any such prepayments
shall be in a minimum amount of $5,000,000 and integral multiples of $500,000 in
excess of such amount, (B) the European Revolving Loan Commitment shall not be
reduced to an amount less than $5,000,000, and (C) after giving effect to such
reductions, the European Borrowers shall comply with Section 1.1(b)(ii). Any
such voluntary prepayment of any Term Loan must be accompanied by the payment of
any IBOR Breakage Fees, if applicable. In addition, Borrowers may at any time on
at least 5 Business Days' prior written notice by the US Borrower Representative
to the Administrative Agent, European Funding Agent and the European Loan Agent
terminate both the US Revolving Loan Commitment and the European Revolving Loan
Commitment; provided that upon any such termination, all Loans and other
Obligations shall be immediately due and payable in full and all Letter of
Credit Obligations shall be cash collateralized or otherwise satisfied in
accordance with Section 6.3. Any such voluntary prepayment and any such
reduction or termination of the Revolving Loan Commitments must be accompanied
by the payment of any IBOR Breakage Fees, if applicable. Borrowers may
voluntarily repay the Revolving Loans (without any reduction or termination of
the Revolving Loan Commitments) without prior written notice to any Agent. Upon
any such termination of the US Revolving Loan Commitment and the European
Revolving Loan Commitment, each Borrower's right to request US Revolving Credit
Advances and European Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf, shall be terminated. Any partial
prepayments of a Term Loan of any Borrower shall be applied pro rata against all
remaining Scheduled Installments until prepaid in full.
(b) Prepayments from Excess Cash Flow. On or before the date that is
15 days after the earlier of (A) the date on which Ultimate Holdco's annual
audited Financial Statements for the immediately preceding Fiscal Year are
delivered pursuant to Section 4.6(b) or (B) the date on which such annual
audited Financial Statements were required to be delivered pursuant to Section
4.6(b) commencing with the Fiscal Year ending December 31, 2003, Borrowers shall
prepay the Loans in an amount equal to (1) seventy-five percent (75%) of Excess
Cash Flow for the immediately preceding Fiscal Year if the Senior Leverage Ratio
for such Fiscal Year is greater than 2.25:1.0, and (2) fifty percent (50%) of
Excess Cash Flow for the immediately preceding Fiscal Year if the Senior
Leverage Ratio for such Fiscal Year is equal to or less than 2.25:1.0 but
greater than 1.75:1.0. If the Senior Leverage Ratio is equal to or less than
1.75:1.0, for any Fiscal Year, no prepayment from Excess Cash Flow shall be
payable with respect to that Fiscal Year. The calculation shall be based on the
audited Financial Statements for Ultimate Holdco and its Subsidiaries. Any
prepayments from Excess Cash Flow paid pursuant to this Section 1.5(b) shall be
made by the applicable Borrower and applied in accordance with Section 1.5(e).
Borrowers shall deliver to Administrative Agent and European Loan Agent not less
than five (5) days prior to the date on which any such payment is due a detailed
calculation of the required prepayment and an aggregation of the specific
contributions to Excess Cash Flow of US Borrowers, considered as a group, and of
European Borrowers, considered as a group, and the resulting proportional
allocation of the prepayments between US Borrowers and European Borrowers.
Aggregate prepayments pursuant to this Section 1.5(b) shall be allocated to the
Obligations of US Borrowers and European Borrowers under Section
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1.5(a) based on the relative contributions of US Borrowers and European
Borrowers to Excess Cash Flow for the applicable Fiscal Year.
(c) Prepayments from Net Proceeds.
(i) Immediately upon receipt by any US Credit Party of any Net
Proceeds in excess of $250,000 during any Fiscal Year, Borrowers shall prepay
the Loans in an amount equal to all such Net Proceeds. Notwithstanding the
foregoing, US Credit Parties may reinvest all such Net Proceeds, within 180
days, in productive replacement fixed assets of a kind then used or usable in
the business of Borrowers. If US Credit Parties do not intend to so reinvest
such Net Proceeds or if the period set forth in the immediately preceding
sentence expires without US Credit Parties having reinvested, such Net Proceeds
or if such Net Proceeds are of the type referred to in clause (ii) of the
definition thereof, Borrowers shall prepay the Loans in an amount equal to such
Net Proceeds or, to the extent that a portion of such Net Proceeds have been
reinvested, the remainder of such Net Proceeds. Any such prepayment shall be
made by the applicable Borrower and applied in accordance with Section l.5(e).
(ii) Immediately upon receipt by any European Credit Party of
Net Proceeds (other than from the sale of the German Property) in excess of
$250,000 (or the Equivalent Amount in an Alternative Currency) during any Fiscal
Year, Borrowers shall prepay the Loans in an amount equal to all such Net
Proceeds. Notwithstanding the foregoing, European Credit Parties may reinvest
all such Net Proceeds (other than from the sale of the German Property), within
180 days, in productive replacement fixed assets of a kind then used or usable
in the business of Borrowers. If European Credit Parties do not intend to so
reinvest such Net Proceeds or if the period set forth in the immediately
preceding sentence expires without European Credit Parties having reinvested
such Net Proceeds or if such Net Proceeds are of the type referred to in clause
(ii) of the definition thereof, Borrowers shall prepay the Loans in an amount
equal to such Net Proceeds or, to the extent that a portion of such Net Proceeds
have been reinvested, the remainder of such Net Proceeds. Any such prepayment
shall be made by the applicable Borrower and applied in accordance with Section
1.5(e); provided, that upon receipt by any European Credit Party of Net Proceeds
from the sale of the German Property during any Fiscal Year, European Borrowers
shall prepay pro rata the remaining Scheduled Installments of the European Term
Loan A.
(d) Prepayments from Issuance of Stock. Immediately upon receipt by
any Credit Party of proceeds of the issuance or reissuance of any Stock, other
than the Excluded Stock Proceeds, the Borrowers shall prepay the Loans on the
date of receipt of the proceeds thereof in an amount equal to all such proceeds,
net of underwriting discounts and commissions and other reasonable costs, fees
and expenses with respect to legal, investment banking, underwriting, brokerage,
accounting and other professional services paid to non-Affiliates in connection
therewith. Any such prepayment shall be made by the applicable Borrowers and
applied in accordance with Section 1.5(e). "Excluded Stock Proceeds" shall mean
(i) proceeds from the exercise of any stock options granted to directors,
officers and employees pursuant to the Stock Option Plan or any other stock
option or bonus plan, (ii) proceeds from the issuance of Stock pursuant to
Section 3.3(d), (e), (n) or (o), and (iii) proceeds of the issuance of Stock of
not more than $5,000,000 in the aggregate by Ultimate Holdco to any Person who
holds Stock in
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Ultimate Holdco on the Closing Date and at the time of such issuance; provided
that no Default or Event of Default has occurred and is continuing.
(e) Application of Proceeds. Any prepayments pursuant to Sections
1.5(b), (c) or (d) shall be made by the applicable Borrowers and applied as
follows: (i) with respect to Excess Cash Flow allocated to any European Borrower
or Net Proceeds or proceeds of business interruption insurance received by any
European Credit Party or proceeds of the issuance or reissuance of Stock
received by any European Credit Party, first, to prepay pro rata the remaining
Scheduled Installments of the European Term Loan A until prepaid in full; and
second, to prepay the principal balance of the European Revolving Credit
Advances until the same have been paid in full, and (ii) with respect to Excess
Cash Flow or proceeds of business interruption insurance allocated to any US
Borrower or Net Proceeds received by any US Credit Party or proceeds of the
issuance or reissuance of Stock received by any US Credit Party, first, to
prepay pro rata the remaining Scheduled Installments of each of the US Term
Loans until prepaid in full; second, to prepay pro rata the remaining Scheduled
Installments of the European Term Loan A until prepaid in full; third to prepay
the principal balance of the US Revolving Credit Advances until paid in full;
and last, to prepay the European Revolving Credit Advances until the same have
been paid in full. None of the Revolving Loan Commitments shall be permanently
reduced by the amount of any such prepayments. Notwithstanding the foregoing,
each of the US Term B Lenders may, in the event of a prepayment pursuant to
Sections 1.5(b), (c) or (d), waive the application of any such prepayment to the
outstanding principal amount of the US Term Loan B under this Section 1.5(e) by
providing written notice of such waiver to Administrative Agent (duly executed
by such US Term B Lender) prior to the application by Administrative Agent of
such prepayment, in which case the amount of such prepayment intended to prepay
US Term Loan B shall be applied to prepay pro rata the remaining Scheduled
Installments of US Term Loan A.
1.6 Maturity. All of the Obligations shall become due and payable as
otherwise set forth herein, but in any event all of the remaining Obligations
shall become due and payable upon termination of this Agreement. Until the
Termination Date, Authorized Agents shall be entitled to retain the security
interests in the Collateral granted under the Collateral Documents and the
ability to exercise all rights and remedies available to them under the Loan
Documents and applicable laws. Notwithstanding anything contained in this
Agreement to the contrary, upon any termination of the US Revolving Loan
Commitment or the European Revolving Loan Commitment, all of the Obligations
shall be due and payable except for the US Term Loan B which shall be due and
payable on June 30, 2009 or earlier pursuant to Section 6.3.
1.7 Loan Accounts. Each Appropriate Agent shall maintain a loan account
(each, a "Loan Account") on its books to record: all Advances and the Term Loan
for which it is Agent, all payments made by Borrowers, and all other debits and
credits as provided in this Agreement with respect to the Loans or any other
Obligations. All entries in the Loan Accounts shall be made in accordance with
Appropriate Agent's customary accounting practices as in effect from time to
time. The balance in the applicable Loan Account, as recorded on Appropriate
Agent's most recent printout or other written statement, shall, absent manifest
error, be presumptive evidence of the amounts due and owing to Agents and
Lenders by Borrowers; provided that any failure to so record or any error in so
recording shall not limit or otherwise affect any Borrower's duty to pay the
Obligations. Each Appropriate Agent shall render to Appropriate Borrower
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Representative a monthly accounting of transactions with respect to the Loans
setting forth the balance of the Loan Account as to each Borrower for the
immediately preceding month. Unless Appropriate Borrower Representative notifies
Appropriate Agent and Administrative Agent, if different, in writing of any
objection to any such accounting (specifically describing the basis for such
objection), within thirty (30) days after the date thereof, each and every such
accounting shall, absent manifest error, be deemed final, binding and conclusive
on Borrowers in all respects as to all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed by
Borrowers. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the applicable Loan Account as evidence
of the amount of Obligations from time to time owing to it.
1.8 Yield Protection; Illegality.
(a) Capital Adequacy and Other Adjustments. In the event that any
Lender shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from any central bank or governmental
agency or body having jurisdiction does or shall have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Lender or any corporation controlling such Lender and thereby reducing the rate
of return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder, then Borrowers shall from time to time within fifteen
(15) days after notice and demand from such Lender (together with the
certificate referred to in the next sentence and with a copy to Appropriate
Agent) pay to Appropriate Agent, for the account of such Lender, additional
amounts sufficient to compensate such Lender for such reduction. A certificate
as to the amount of such cost and showing the basis of the computation of such
cost submitted by such Lender to Appropriate Borrower Representative and
Appropriate Agent shall, absent manifest error, be final, conclusive and binding
for all purposes.
(b) Increased IBOR Funding Costs; Illegality. Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law, rule, regulation, treaty or directive (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to continue to fund or maintain any IBOR Loan, then, unless that
Lender is able to make or to continue to fund or to maintain such IBOR Loan at
another branch or office of that Lender without, in that Lender's reasonable
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Appropriate Borrower
Representative through Appropriate Agent, (i) the obligation of such Lender to
agree to make or to continue to fund or maintain IBOR Loans shall terminate,
(ii) each US Borrower shall forthwith prepay in full all outstanding IBOR Loans
owing by such US Borrower to such Lender, together with interest accrued
thereon, unless with respect to US Revolving Credit Advances and US Term Loans
that are IBOR Loans, US Borrower Representative on behalf of such US Borrower,
within five (5) Business Days after the delivery of such notice and demand,
converts all IBOR Loans into Index Rate Loans, and (iii) each
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European Borrower shall forthwith prepay in full all outstanding IBOR Loans
owing by such European Borrower to such Lender, together with interest accrued
thereon. If, after the date hereof, the introduction of, change in or
interpretation of any law, rule, regulation, treaty or directive would impose or
increase reserve requirements (other than as taken into account in the
definition of IBOR) or otherwise increase the cost to any Lender of making or
maintaining an IBOR Loan, then US Borrowers or European Borrowers, as
applicable, shall from time to time within twenty (20) days after notice and
demand from Appropriate Agent to Appropriate Borrower Representative (together
with the certificate referred to in the next sentence) pay to Appropriate Agent,
for the account of all such affected Lenders, additional amounts sufficient to
compensate such Lenders for such increased cost. A certificate as to the amount
of such cost and showing the basis of the computation of such cost submitted by
Appropriate Agent on behalf of all such affected Lenders to Appropriate Borrower
Representative shall, absent manifest error, be final, conclusive and binding
for all purposes.
(c) Each Lender shall notify Appropriate Borrower Representative of
any event that will entitle such Lender to compensation under this Section 1.8
as promptly as practicable, but in any event within 120 days after such Lender
obtains actual knowledge thereof; provided, however, that (i) if any Lender
fails to give such notice within 120 days after it obtains actual knowledge of
such an event, such Lender shall, with respect to compensation payable pursuant
to this Section 1.8 in respect of any Costs resulting from such event, only be
entitled to payment under this Section 1.8 for amounts or losses incurred from
and after the date 120 days prior to the date that such Lender does give such
notice.
1.9 Taxes.
(a) No Deductions. Any and all payments or reimbursements made
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all charges, taxes, levies, imposts, deductions or
withholdings, and all liabilities with respect thereto of any nature whatsoever
imposed by any taxing authority, excluding such taxes to the extent imposed on
an Agent's or a Lender's net income by the jurisdiction in which such Agent or
such Lender is organized. If any Borrower shall be required by law to deduct any
such amounts from or in respect of any sum payable hereunder to any Lender or
any Agent, then the sum payable hereunder shall be increased as may be necessary
so that, after making all required deductions, such Lender or such Agent
receives an amount equal to the sum it would have received had no such
deductions been made.
(b) Changes in Tax Laws. In the event that, subsequent to the Closing
Date, (1) any changes in any existing law, regulation, treaty or directive or in
the interpretation or application thereof, (2) any new law, regulation, treaty
or directive enacted or any interpretation or application thereof, or (3)
compliance by any Agent or any Lender with any request or directive (whether or
not having the force of law) from any Governmental Authority:
(i) does or shall subject any Agent or any Lender to any tax
of any kind whatsoever with respect to this Agreement, the other Loan Documents
or any Loans made or Letters of Credit issued hereunder, or change the basis of
taxation of payments to such Agent or such Lender of principal, fees, interest
or any other amount payable hereunder (except for net income taxes, or franchise
taxes imposed in lieu of net income taxes, imposed generally by
29
federal, state or local taxing authorities with respect to interest or
commitment fees or other fees or Fees payable hereunder or changes in the rate
of tax on the overall net income of such Agent or such Lender); or
(ii) does or shall impose on any Agent or any Lender any other
condition or increased cost in connection with the transactions contemplated
hereby or participations herein;
and the result of any of the foregoing is to increase the cost to any such Agent
or any such Lender of issuing any Letter of Credit or making or continuing any
Loan hereunder, as the case may be, or to reduce any amount receivable
hereunder, then, in any such case, Borrowers shall promptly pay to such Agent or
such Lender, upon its demand, any additional amounts necessary to compensate
such Agent or such Lender, on an after-tax basis, for such additional cost or
reduced amount receivable, as determined by such Agent or such Lender with
respect to this Agreement or the other Loan Documents. If such Agent or such
Lender becomes entitled to claim any additional amounts pursuant to this Section
1.9(b), it shall promptly notify Appropriate Borrower Representative of the
event by reason of which such Agent or such Lender has become so entitled. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by such Agent or such Lender to Appropriate Borrower
Representative (with a copy to Appropriate Agent) shall, absent manifest error,
be final, conclusive and binding for all purposes.
(c) Foreign Lenders. Each US Lender organized under the laws of a
jurisdiction outside the United States and each European Lender organized under
the laws of a jurisdiction outside of Denmark, shall, on or prior to the date of
its execution and delivery of this Agreement in the case of each initial Lender
hereunder, and on the date of the Assignment Agreement pursuant to which it
became a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by a Borrower or the Appropriate Agent (but
only so long thereafter as such Lender remains lawfully able to do so), provide
the Appropriate Agent and Appropriate Borrower Representative with: (i) in the
case of such a US Lender, a properly completed and executed IRS Form W-8BEN or
Form W-8ECI or other applicable form, certificate or document prescribed by the
IRS of the United States certifying as to such US Lender's entitlement an
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Note, and (ii) in the case of any such
European Lender organized under the laws of a jurisdiction outside of Denmark,
such valid and fully completed forms, as are required by the applicable tax
authority of Denmark, indicating that such European Lender is entitled to
benefits under an income tax treaty to which the country within which such
European Borrower is resident is a party that reduces the rate of
interest-withholding tax on payments under this Agreement or the Notes (each a
"Certificate of Exemption"). No such Person may become a Lender hereunder if
such Person fails to deliver a Certificate of Exemption in advance of becoming a
Lender as provided above. In addition, each of the foregoing Lenders agrees that
from time to time after the Closing Date, when a lapse in time or change in
circumstances renders the previous Certificate of Exemption obsolete or
inaccurate in any material respect, it will deliver to the Appropriate Agent and
the Appropriate Borrower Representative a new, accurate, complete and executed
Certificate of Exemption and such other forms as may be required in order to
confirm the entitlement of such Lender to a continued exemption from United
States withholding tax or other interest-withholding tax, as applicable, with
respect to payments under this Agreement or any Note, or it shall promptly upon
actual
30
knowledge thereof notify the Appropriate Agent and the Appropriate Borrower
Representative of its inability to deliver any such Certificate of Exemption. No
Borrower shall be required to indemnify any Lender, or pay any additional
amounts to any Lender, in respect of United States withholding tax or Danish
withholding tax, as applicable, pursuant to Section 1.9(a) to the extent that
(y) the obligation to withhold such amounts existed on the date such Lender
became a party to this Agreement; provided however, that this clause (y) shall
not apply to the extent that (I) the indemnity payments or additional amounts
any Lender would be entitled to receive (without regard to this clause (y)) do
not exceed the indemnity payments or additional amounts that the Person making
the assignment or transfer to such Lender would have been entitled to receive in
the absence of such assignment or transfer, or (II) such assignment or transfer
had been requested by any Borrower, or (z) the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender to comply with
the provisions of this Section 1.9(c).
(d) Each Lender shall notify Appropriate Borrower Representative of
any event that will entitle such Lender to compensation under this Section 1.9
as promptly as practicable, but in any event within 120 days after such Lender
obtains actual knowledge thereof; provided however, that (i) if any Lender fails
to give such notice within 120 days after it obtains actual knowledge of such an
event, such Lender shall, with respect to compensation payable pursuant to this
Section 1.9 in respect of any costs result from such event, only be entitled to
payment under this Section 1.9 for amounts or losses incurred from and after the
date 120 days prior to the date that such Lender does give such notice.
1.10 Limitations on Obligations of European Credit Parties.
Notwithstanding anything set forth in this Agreement or any other Loan Document
to the contrary, other than as may be required under Section 2.7(d), no European
Credit Party shall at any time be liable for any portion of the principal of the
US Term Loans or US Revolving Loan or any interest thereon or Fees payable with
respect thereto (and the US Credit Parties are liable for such Obligations), and
no assets of any European Credit Party shall at any time serve, directly or
indirectly, as security for any portion of the principal of the US Term Loans or
US Revolving Loan or any interest thereon or any Fees payable with respect
thereto.
1.11 Borrower Representatives. Each US Borrower hereby designates TPI as
its representative and agent on its behalf for the purposes of issuing any
Notice of US Revolving Credit Advances and Notice of Conversion/Continuation,
giving instructions with respect to the disbursement of the proceeds of the
Loans, selecting interest rate options, requesting Letters of Credit, giving and
receiving all other notices and consents hereunder or under any of the other
Loan Documents and taking all other actions (including in respect of compliance
with covenants) on behalf of any US Borrower or US Borrowers under the Loan
Documents. US Borrower Representative hereby accepts such appointment. Each
European Borrower hereby designates TWHC as its representative and agent on its
behalf for the purposes of issuing any Notice of European Revolving Credit
Advances and Notice of Continuation, giving instructions with respect to the
disbursement of the proceeds of the Loans, selecting interest rate options,
requesting Letters of Credit, giving and receiving all other notices and
consents hereunder or under any of the other Loan Documents and taking all other
actions (including in respect of compliance with covenants) on behalf of any
European Borrower or European Borrowers under the Loan Documents. European
Borrower Representative hereby accepts such appointment. Each Agent and each
Lender may regard any notice or other communication pursuant to any
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Loan Document from any Appropriate Borrower Representative as a notice or
communication from all applicable Borrowers. Each Borrower agrees that each
warranty, covenant, agreement and undertaking made on its behalf by Appropriate
Borrower Representative shall be deemed for all purposes to have been made by
such Borrower and shall be binding upon and enforceable against such Borrower to
the same extent as it if the same had been made directly by such Borrower.
1.12 Single Loan. All Loans to each US Borrower and all of the other
Obligations of each US Borrower arising under this Agreement and the other Loan
Documents, including its obligations as a Guarantor, shall constitute one
general obligation of that US Borrower secured, until the Termination Date, by
the Collateral pledged by the US Credit Parties to secure such Obligations
pursuant to the Collateral Documents (it being understood that, subject to the
provisions of Section 2.7(d), pursuant to the Collateral Documents only 65% of
the Stock of TWHC is pledged to secure such Obligations). All Loans to each
European Borrower and all of the other Obligations of each European Borrower
arising under this Agreement and the other Loan Documents shall constitute one
general obligation of that European Borrower secured, until the Termination
Date, by all of the Collateral pursuant to the Collateral Documents.
SECTION 2.
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
2.1 Compliance With Laws and Contractual Obligations. Each Credit Party
will (a) comply with and shall cause each of its Subsidiaries to comply with (i)
the requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including, without limitation, Charges, laws, rules,
regulations and orders relating to taxes, employer and employee contributions,
securities, employee retirement and welfare benefits, environmental protection
matters and employee health and safety) as now in effect and which may be
imposed in the future in all jurisdictions in which any Credit Party or any of
its Subsidiaries is now doing business or may hereafter be doing business and
(ii) the obligations, covenants and conditions contained in all Contractual
Obligations of such Credit Party or any of its Subsidiaries other than those
laws, rules, regulations, orders and provisions of such Contractual Obligations
the noncompliance with which could not be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, and (b) maintain or
obtain and shall cause each of its Subsidiaries to maintain or obtain all
licenses, qualifications and permits now held or hereafter required to be held
by such Credit Party or any of its Subsidiaries, for which the loss, suspension,
revocation or failure to obtain or renew, could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. This Section
2.1 shall not preclude any Credit Party or its Subsidiaries from contesting any
taxes or other payments, if they are being diligently contested in good faith in
a manner which stays enforcement thereof and if appropriate expense provisions
have been recorded in conformity with GAAP. Each Credit Party represents and
warrants that it (i) is in compliance and each of its Subsidiaries is in
compliance with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority and the obligations, covenants and
conditions contained in all Contractual Obligations other than those laws,
rules, regulations, orders and provisions of such
32
Contractual Obligations the noncompliance with which could not be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect, and (ii) maintains and each of its Subsidiaries maintains all licenses,
qualifications and permits referred to above, except where the failure to do so
could not be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect.
2.2 Maintenance of Properties; Insurance. Each Credit Party will maintain
or cause to be maintained in good repair, working order and condition all
material properties used in the business of such Credit Party and its
Subsidiaries and will make or cause to be made all appropriate repairs, renewals
and replacements thereof. Each Credit Party will maintain or cause to be
maintained, with financially sound and reputable insurers, public liability and
property damage insurance with respect to its business and properties and the
business and properties of its Subsidiaries against loss or damage of the kinds
customarily carried or maintained by corporations of established reputation
engaged in similar businesses and in amounts acceptable to Administrative Agent
and will deliver evidence thereof to Administrative Agent. Each European Credit
Party will maintain business interruption insurance providing coverage for a
period of at least six (6) months and in an amount not less than $12,000,000,
and each US Credit Party will maintain business interruption insurance providing
coverage for a period of at least six (6) months and in an amount not less than
$11,000,000. Each Credit Party shall cause Administrative Agent (or with respect
to any European Credit Party, the European Security Agent), pursuant to
endorsements and/or assignments in form and substance reasonably satisfactory to
such Agent, to be named as lender's loss payee in the case of casualty
insurance, additional insured in the case of all liability insurance and
assignee in the case of all business interruption insurance, in each case for
the benefit of Agents and Lenders. Each Credit Party represents and warrants
that it and each of its Subsidiaries currently maintains all material properties
as set forth above and maintains all insurance described above. In the event any
Credit Party fails to provide Administrative Agent with evidence of the
insurance coverage required by this Agreement, Administrative Agent (or with
respect to any European Credit Party, the European Loan Agent or the European
Security Agent) may purchase such insurance at such Credit Party's expense to
protect such Agent's interest in the Collateral. This insurance may, but need
not, protect such Credit Party's interests. The coverage purchased by any Agent
may not pay any claim made by such Credit Party or any claim that is made
against such Credit Party in connection with the Collateral. Such Credit Party
may later cancel any insurance purchased by any Agent, but only after providing
such Agent with evidence that such Credit Party has obtained insurance as
required by this Agreement. If any Agent purchases insurance for the Collateral,
such Credit Party will be responsible for the costs of that insurance, including
interest and other Charges imposed by such Agent in connection with the
placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the
Obligations, as provided in Section l.4(d). The costs of the insurance may be
more than the cost of insurance such Credit Party is able to obtain on its own.
2.3 Inspection; Lender Meeting. Each Credit Party shall permit any
authorized representatives of the Administrative Agent, the European Loan Agent
and the European Security Agent (the "Authorized Agents") to visit, audit and
inspect any of the properties of such Credit Party and its Subsidiaries,
including its and their financial and accounting records, and to make copies and
take extracts therefrom, and to discuss its and their affairs, finances and
business with its and their officers and certified public accountants, (a) prior
to the occurrence
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and during the continuance of an Event of Default, no more than twice each
Fiscal Year (or more frequently as may be mutually agreed on by Administrative
Agent and Borrower Representative), at such reasonable times during normal
business hours, in each case, upon 2 Business Day's prior notice, and (b) after
the occurrence and during the continuance of an Event of Default, without notice
and as often as Administrative Agent determines to be appropriate.
Representatives of each Lender will be permitted to accompany representatives of
any Authorized Agent during each visit, inspection and discussion referred to in
the immediately preceding sentence. Without in any way limiting the foregoing,
each Credit Party will participate and will cause key management personnel of
each Credit Party and its Subsidiaries to participate in a meeting with
Authorized Agents and Lenders at least once during each year, which meeting
shall be held at such time and such place as may be reasonably requested by
Administrative Agent.
2.4 Organizational Existence. Except as otherwise permitted by Section
3.6, each Credit Party will and will cause its Subsidiaries to at all times
preserve and keep in full force and effect its organizational existence and all
rights and franchises material to its business.
2.5 Environmental Matters. Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance that could not reasonably be expected to have a
Material Adverse Effect; (b) implement any and all investigation, remediation,
removal and response actions that are required to comply with Environmental Laws
and Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify each
Agent promptly after such Credit Party or any Person within its control becomes
aware of any violation of Environmental Laws or Environmental Permits or any
Release on, at, in, under, above, to, from or about any Real Estate that is
reasonably likely to result in Environmental Liabilities to a Credit Party or
its Subsidiaries in excess of $500,000; and (d) promptly forward to
Administrative Agent a copy of any order, notice, request for information or any
communication or report received by such Credit Party or any Person within its
control in connection with any such violation or Release or any other matter
relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in Environmental Liabilities in excess of
$500,000, in each case whether or not the Environmental Protection Agency or any
Governmental Authority has taken or threatened any action in connection with any
such violation, Release or other matter. If any Authorized Agent at any time has
a reasonable basis to believe that there may be a violation of any Environmental
Laws or Environmental Permits by any Credit Party or any Person under its
control or any Environmental Liability arising thereunder, or a Release of
Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party and its Subsidiaries shall, upon such
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling, of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as such Agent may from time to
time reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to such Agent and shall be in form and
substance reasonably acceptable to such Agent, and (ii) permit each Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Administrative Agent deems
34
appropriate, including subsurface sampling of soil and groundwater. Borrowers
shall reimburse Appropriate Agent for the costs of such audits and tests and the
same will constitute a part of the Obligations secured hereunder.
2.6 Landlords' Agreements, Mortgagee Agreements and Bailee Letters. Each
US Credit Party and Designated European Credit Party shall use 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 Collateral is stored or located, which
agreement or letter shall 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 (and, with respect to any Designated European
Credit Party, the European Loan Agent). With respect to such locations or
warehouse space leased or owned as of the Closing Date and thereafter, if
Administrative 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), the Eligible Inventory at that location shall, in
Administrative Agent's discretion, be subject to such Reserves as may be
established by Administrative Agent in its reasonable credit judgment. After the
Closing Date, no real property or warehouse space shall be leased by any US
Credit Party or Designated European Credit Party and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Closing Date without the prior written consent of Administrative Agent (which
consent, shall not be unreasonably withheld, but which consent, in
Administrative Agent's discretion, may be conditioned upon the exclusion from
the Borrowing Base of Eligible Inventory at that location or the establishment
of Reserves 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 and shall cause its Subsidiaries to timely and fully pay and perform their
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located.
2.7 Further Assurances.
(a) Each Credit Party (except as noted in the following sentence)
shall, from time to time, execute such guaranties, financing statements,
documents, security agreements and reports as any Authorized Agent or Requisite
Lenders at any time may reasonably request to evidence, perfect or otherwise
implement the guaranties and security for repayment of the Obligations
contemplated by the Loan Documents. If at any time TIL has assets with a fair
market value greater than $250,000 (or the Equivalent Amount in an Alternative
Currency), TIL, at its cost and expense, shall promptly upon the request of any
Authorized Agent execute and deliver, or cause to be executed and delivered, to
the European Security Agent (i) a Guaranty in form and substance satisfactory to
the Administrative Agent and the European Loan Agent, guaranteeing the
Obligations of the European Borrowers hereunder and under the other Loan
Documents, and (ii) Collateral Documents in form and substance satisfactory to
Authorized Agents, granting to the European Security Agent a Lien over TIL's
properties and assets to secure the Obligations of the European Credit Parties,
to the extent such Guaranty or Collateral Document is not prohibited by the Laws
of the United Kingdom.
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(b) In the event any Credit Party acquires after the Closing Date a
fee simple interest for a purchase price in excess of $250,000, or a leasehold
interest in real property having annual rental or lease payments of greater than
$250,000, such Credit Party shall deliver to Administrative Agent or European
Security Agent, as applicable, a fully executed mortgage or deed of trust over
such real property in form and substance satisfactory to Administrative Agent,
together with such title insurance policies, surveys, appraisals, evidence of
insurance, legal opinions, environmental assessments and other documents and
certificates as shall be reasonably required by Administrative Agent (or with
respect to any European Credit Party, Administrative Agent and European Security
Agent).
(c) Each US Credit Party shall (i) cause each Person, upon its
becoming a Domestic Subsidiary of such US Credit Party (provided that this shall
not be construed to constitute consent by any of the Lenders to any transaction
not expressly permitted by the terms of this Agreement), promptly to guaranty
the Obligations and to grant to Administrative Agent, for the benefit of
Administrative Agent and Lenders, a security interest in the real, personal and
mixed property of such Person to secure the Obligations, (ii) pledge, or cause
to be pledged, to Administrative Agent, for the benefit of Administrative Agent
and Lenders, all of the Stock of such Subsidiary to secure the Obligations and
(iii) enter into blocked account agreements in form and substance approved by
the Administrative Agent. The documentation for such guaranty, security and
pledge shall be substantially similar to the Loan Documents executed
concurrently herewith with such modifications as are reasonably requested by
Administrative Agent.
(d) To the extent that no incremental income tax liability (other
than de minimus incremental income tax liability) would result from
consolidating any European Credit Party's financial statements with the US
Credit Parties for US tax-reporting purposes, then at the request of the
Administrative Agent or the Required Lenders, Ultimate Holdco shall cause each
such European Credit Party to execute and deliver to the Administrative Agent
(a) a Guaranty in form and substance reasonably satisfactory to the
Administrative Agent, guaranteeing the Obligations of the US Borrowers hereunder
and under the other Loan Documents, and (b) Collateral Documents in form and
substance reasonably satisfactory to the Agents, granting to the European
Security Agent a Lien over such European Credit Party's properties and assets,
in each case, to the extent such European Credit Party has, or is required to
have, entered into a Guaranty or a Collateral Document with respect to the
Obligations of the European Credit Parties, and to the extent such Guaranty or
Collateral Document is not prohibited by the law of the jurisdiction of
formation of such European Credit Party, and shall cause the pledge of all Stock
of such European Credit Party to the Administrative Agent to secure all of the
Obligations to the extent only a portion of such Stock was previously pledged to
the Administrative Agent to secure the Obligations of the US Credit Parties.
(e) Each European Credit Party, at its cost and expense, shall
promptly upon the request of either Agent execute and deliver, or cause to be
executed and delivered, to the European Security Agent (a) a Guaranty in form
and substance satisfactory to the Administrative Agent and the European Loan
Agent, guaranteeing the Obligations of the European Borrowers hereunder and
under the other Loan Documents, and (b) Collateral Documents in form and
substance satisfactory to Agents, granting to the European Security Agent a Lien
over such European Credit Party's properties and assets to secure the
Obligations of the European Credit Parties, to the extent such Guaranty or
Collateral Document is not prohibited by the law of the
36
jurisdiction of formation of such European Credit Party. The Administrative
Agent may make any such request (i) after the occurrence and during the
continuance of a Default or Event of Default, in its sole and absolute
discretion and (ii) so long as no Default or Event of Default has occurred and
is continuing, (x) in the exercise of reasonable credit judgment and taking into
consideration the costs associated therewith in relation to the value or
importance of such Guaranty or Collateral (it being understood that it is the
intent of the parties that the Obligations of the European Credit Parties shall
be secured by substantially all of the assets and properties of the European
Credit Parties) or (y) with respect to any European Credit Party having assets
with a fair market value greater than $1,500,000 (or the Equivalent Amount in an
Alternative Currency). The security interests required to be granted pursuant to
this Section 2.7 shall be valid and enforceable perfected security interests
prior to the rights of all third Persons and subject to no other Liens, except
Permitted Encumbrances. The Collateral Documents and other instruments related
thereto shall be duly recorded or filed in such manner and in such places and at
such times, and such other actions shall be taken, as are required by law to
establish, perfect, preserve and protect the Liens, in favor of the European
Security Agent, required to be granted pursuant to such documents and all taxes,
fees and other charges payable in connection therewith shall be paid in full by
the European Credit Parties. At the time of the execution and delivery of the
additional documents, the European Credit Parties shall cause to be delivered to
the Agents such opinions of counsel, mortgage policies, title surveys, real
estate appraisals, certificates of title, stock certificates and other related
documents as may be reasonably requested by the Administrative Agent or the
European Loan Agent to assure themselves that this Section 2.7 has been complied
with.
2.8 Interest Rate Agreement. Borrowers shall maintain Interest Rate
Agreements providing for interest rate protection as currently in effect with
respect to $60,000,000 of the Term Loans for a term expiring no earlier than
March 31, 2006.
2.9 Escrow. All Escrow Material shall be deposited with and at all times
held by the Escrow Agent pursuant to the Escrow Agreement.
2.10 Currency Risk Management Policy. Ultimate Holdco will maintain until
the Termination Date, a currency risk management policy in accordance with the
guidelines set out in Annex G (the "Currency Risk Management policy").
2.11 Post-Closing Date Matters. Credit Parties shall deliver the documents
listed on Schedule A to the Post Closing Agreement, and take of all actions set
forth on Schedule A to the Post Closing Agreement to the satisfaction of
Appropriate Agent on or before the date specified for such delivery or action.
SECTION 3.
NEGATIVE COVENANTS
------------------
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
3.1 Indebtedness. The Credit Parties shall not and shall not cause or
permit their Subsidiaries directly or indirectly to create, incur, assume, or
otherwise become or remain
37
directly or indirectly liable with respect to any Indebtedness (other than
pursuant to a Contingent Obligation permitted under Section 3.4) except:
(a) the Obligations;
(b) Indebtedness evidenced by the Subordinated Notes Documents in an
aggregate principal amount not to exceed $150,000,000, in the aggregate at any
time outstanding;
(c) Indebtedness not to exceed $1,000,000 in the aggregate at any
time outstanding secured by purchase money Liens or incurred with respect to
Capital Leases and refinancings thereof or amendments or modifications thereto
that do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and that are
otherwise on terms and conditions no less favorable to any Credit Party, any
Agent or any Lender, as determined by Administrative Agent, than the terms of
the Indebtedness being refinanced, amended or modified;
(d) Existing Indebtedness (including intercompany loans) described in
Schedule 3.1 outstanding as of the Closing Date and refinancings thereof or
amendments or modifications thereto that do not have the effect of increasing
the principal amount thereof or changing the amortization thereof (other than to
extend the same) and that are otherwise on terms and conditions no less
favorable to any Credit Party, any Agent or any Lender, as determined by
Administrative Agent, than the terms of the Indebtedness being refinanced,
amended or modified;
(e) Indebtedness consisting of intercompany loans and advances made
by any US Borrower to the other US Borrower; provided that: (i) each US Borrower
shall record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Administrative Agent; (ii) the obligations of each US
Borrower with respect to such intercompany loans and advances shall be
subordinated to the Obligations pursuant to Section 9.23; and (iii) at the time
any such intercompany loan or advance is made, each US Borrower shall be
Solvent;
(f) Indebtedness consisting of intercompany loans and advances made
by any European Borrower to the other European Borrower or any other European
Credit Party which is a Subsidiary of such European Borrower; provided that: (i)
each European Borrower shall record all intercompany transactions on its books
and records in a manner reasonably satisfactory to European Loan Agent; (ii) the
obligations of each European Borrower with respect to such intercompany loans
and advances shall be subordinated to the Obligations pursuant to Section 9.23;
(iii) no Event of Default shall have occurred and be continuing as of the date
any such proposed intercompany loan or advance is to be made; and (iv) the
aggregate amount of such intercompany loans or advances made by the European
Borrowers to their respective Subsidiaries outstanding at any time shall not
exceed the following amounts: (x) with respect to Subsidiaries formed under
clause (ii) of Section 3.6(b), $3,500,000 (or the Equivalent Amount in an
Alternative Currency) at any time during Fiscal Year in which such Subsidiary
was formed, and (y) with respect to any other Subsidiaries, $3,500,000 (or the
Equivalent Amount in an Alternative Currency), in each case, or such higher
amount up to but not exceeding $7,500,000
38
as the Administrative Agent (after consultation with European Loan Agent) shall
approve in writing;
(g) Indebtedness consisting of intercompany loans and advances, made
by any US Borrowers to either European Borrower; provided that: (i) each US
Borrower shall record all intercompany transactions on its books and records in
a manner reasonably satisfactory to Administrative Agent; (ii) the obligations
of each European Borrower with respect to such intercompany loans and advances
shall be subordinated to the Obligations pursuant to Section 9.23; (iii) no
Event of Default shall have occurred and be continuing as of the date such
proposed intercompany loan or advance is to be made; (iv) after giving effect to
such intercompany loans and advances (other than any such intercompany loans or
advances the proceeds of which are used simultaneously to make mandatory
prepayments of the Loans hereunder), the US Borrowing Availability shall be
equal to or in excess of $5,000,000; and (v) the aggregate amount of such
intercompany loans or advances made by the US Borrowers to European Borrowers in
any Fiscal Year, together with the aggregate amount of any capital contributions
made by US Borrower to European Borrowers, shall not exceed $5,000,000 in the
aggregate at any time (excluding any intercompany loans or advances permitted
under Section 3.1(q));
(h) Indebtedness consisting of intercompany loans and advances made
by any European Borrower to either US Borrower; provided that: (i) each European
Borrower shall record all intercompany transactions on its books and records in
a manner reasonably satisfactory to Administrative Agent; (ii) the obligations
of each US Borrower with respect to such intercompany loans and advances shall
be subordinated to the Obligations pursuant to Section 9.23; and (iii) no Event
of Default shall have occurred and be continuing as of the date such proposed
intercompany loan or advance is to be made;
(i) Indebtedness under Interest Rate Agreements, Interest Hedge
Agreements and Foreign Exchange Agreements entered into in the ordinary course
of business; provided that such agreements (i) are designed solely to protect
Credit Parties against fluctuations in foreign currency exchange rates or
interest rates and (ii) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder;
(j) unsecured Indebtedness incurred by Credit Parties, not to exceed
$1,000,000 in the aggregate outstanding at any time;
(k) unsecured Subordinated Debt (other than the Subordinated Debt
permitted by clause (b) above and clause (m) below) incurred by Credit Parties,
not to exceed at any time $1,000,000 in the aggregate;
(l) Indebtedness of European Credit Parties (other than European
Borrowers) to banks arising out of overdrafts of deposit accounts, which
overdrafts are supported by Letters of Credit issued pursuant to this Agreement
and the amount of which Indebtedness does not exceed the amount of the Letter of
Credit issued in support thereof;
39
(m) Subordinated Debt evidenced by promissory notes, which shall be
in the form attached as Exhibit 3.1(m), issued by Ultimate Holdco to former
managers and employees of Ultimate Holdco or its Subsidiaries (or their Family
Members (as defined in the Stockholders Agreement) or their estates or
beneficiaries under their estates) representing the unpaid repurchase,
redemption, acquisition, or cancellation price for Stock of Ultimate Holdco, or
the price to effect the termination of options to purchase Stock of Ultimate
Holdco, in each case, owned by such former managers and employees of Ultimate
Holdco and its Subsidiaries (or their Family Members or their estates or
beneficiaries under their estates) and repurchased, redeemed, acquired,
cancelled or terminated in compliance with Section 3.5(b);
(n) The Additional Indebtedness; provided that (i) no Event of
Default has occurred and is continuing as of the date that such Additional
Indebtedness is incurred; (ii) the Senior Leverage Ratio and Leverage Ratio
shall not exceed 2.5 and 4.0, respectively, immediately after giving effect to
the incurrence of such Additional Indebtedness, (iii) immediately after giving
effect to the incurrence of such Additional Indebtedness, the outstanding
principal amount of the Loans (including Letters of Credit that have been drawn
upon) shall not exceed $290,000,000, and the sum of the principal amount of such
Loans and the Subordinated Notes (including Additional Subordinated Notes, if
any) shall not exceed $470,000,000 in the aggregate, (iv) the Credit Parties
shall be in compliance with (x) the Subordinated Notes Indenture and each other
material agreement by which such Credit Party is bound and (y) the financial
covenants set forth in Sections 4.2 through 4.5, as of the last day of the most
recent Fiscal Quarter ending more than 45 days prior to the date on which such
Additional Indebtedness was incurred, on a pro forma basis assuming that such
Additional Indebtedness was incurred on the first day of that Fiscal Quarter,
and (v) the Loans hereunder shall continue to be rated "B+" or better by S&P and
"B1" or better by Xxxxx'x taking into account the incurrence of such Additional
Indebtedness as evidenced by ratings letters received from such rating agencies
not more than 30 days prior to the incurrence of such Additional Indebtedness.
(o) Indebtedness consisting of intercompany loans and advances made
by any US Borrower to any Domestic Subsidiary of Holdco (other than the US
Borrowers); provided that: (i) each US Borrower shall record all intercompany
transactions on its books and records in a manner reasonably satisfactory to
Administrative Agent; (ii) the obligations of such Domestic Subsidiary with
respect to such intercompany loans and advances shall be subordinated to the
Obligations of such Domestic Subsidiary in its capacity as Guarantor pursuant to
Section 9.23; (iii) at the time any such intercompany loan or advance is made,
each US Borrower shall be Solvent; and (iv) no Default or Event of Default would
occur and be continuing after giving effect to any such proposed intercompany
loan; and (v) (A) the aggregate amount of such intercompany loans or advances
made by the US Borrowers to such Domestic Subsidiaries outstanding at any time
shall not exceed $1,000,000 and (B) in addition to the preceding clause (a) the
aggregate amount of such intercompany loans or advances made by the US Borrowers
to such Domestic Subsidiaries outstanding at any time in the case of
intercompany loans made to build, own and operate a new manufacturing plant (as
permitted under Section 3.6(b)(iv) shall not exceed $2,000,000;
(p) Indebtedness consisting of intercompany payables from any Credit
Party to another Credit Party incurred in the ordinary course of business;
provided that the total
40
intercompany payables of direct or indirect Subsidiaries of TWHC (other than DF)
that are payable to any other Credit Party and have been outstanding in excess
of 365 days from the due date of such intercompany payable (which due date shall
not be later than 180 days following the date such intercompany payable was
incurred), shall not exceed $2,000,000 in the aggregate at any time; and
(q) Indebtedness consisting of intercompany loans and advances of any
indemnity or other payments received by Intermediate Holdco pursuant to the
Merger Agreement made by (i) Intermediate Holdco, or (ii) any Credit Party to
which such indemnity or other payments have been contributed, in each case, to
the Credit Party which has incurred the obligation or liability with respect to
which such payment has been made under the Merger Agreement; and
(r) Indebtedness consisting of intercompany loans and advances made
by Spanish Holdco to DF; provided that, (i) DF shall record all intercompany
transactions on its books and records in a manner reasonably satisfactory to
European Loan Agent, (ii) the obligations of DF with respect to such
intercompany loans and advances shall be subordinated to the obligations
pursuant to Section 9.23, (iii) no Event of Default shall have occurred and be
continuing as of the date such proposed intercompany loan or advance is to be
made, and (iv) the aggregate amount of such intercompany loans or advances made
by Spanish Holdco to DF in any Fiscal Year shall not exceed the amounts of the
distributions made in such Fiscal Year pursuant to Section 3.5(h).
3.2 Liens and Related Matters
(a) No Liens. Except as set forth on Schedule 3.2, the Credit Parties
shall not and shall not cause or permit their Subsidiaries to directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any property or asset of such Credit Party or any such Subsidiary, whether
now owned or hereafter acquired, or any income or profits therefrom, except (i)
Permitted Encumbrances, (ii) subleases entered into in the ordinary course of
business by any Credit Party as lessor with respect to excess or unused real
property leased by such Credit Party; (iii) leases entered into in the ordinary
course of business by any Credit Party as lessor with respect to any excess or
unused real property owned by such Credit Party; and (iv) Liens not otherwise
permitted hereunder securing obligations of any Credit Party not exceeding
$250,000 in the aggregate at any one time.
(b) No Negative Pledges. Except as set forth on Schedule 3.2, the
Credit Parties shall not and shall not cause or permit their Subsidiaries to
directly or indirectly enter into or assume any agreement (other than the Loan
Documents) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, except (a) the
Subordinated Notes Documents and (b) Capital Leases or Licenses which prohibit
Liens upon the assets that are subject thereto.
(c) No Restrictions on Subsidiary Distributions to Borrowers. Except
as provided herein and as provided in the Subordinated Notes Documents, the
Credit Parties shall not and shall not cause or permit their Subsidiaries to
directly or indirectly create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to: (i) pay dividends or make any other distribution on
any of such Subsidiary's Stock owned by any Borrower or any other Subsidiary;
(ii) pay any
41
Indebtedness owed to any Borrower or any other Subsidiary; (iii) make loans or
advances to any Borrower or any other Subsidiary; or (iv) except for
restrictions on the transfers of specific assets subject to Capital Leases or
other leases or purchase money obligations, transfer any of its property or
assets to any Borrower or any other Subsidiary.
3.3 Investments. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly make or own any Investment
in any Person except:
(a) Borrowers may make and own Investments in Cash Equivalents
subject to a first priority perfected security interest in favor of
Administrative Agent or European Security Agent (including pursuant to Control
Letters); provided that such Cash Equivalents are not subject to setoff rights;
(b) The Credit Parties may make intercompany loans to other Credit
Parties to the extent permitted under Section 3.1;
(c) Credit Parties may make (i) loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary course
of business not to exceed $100,000 to any employee and not to exceed $200,000 in
the aggregate at any time outstanding and (ii) the Officer Loans;
(d) US Borrowers may make capital contributions to their wholly owned
Domestic Subsidiaries; provided that such capital contributions shall not exceed
$1,000,000 in any Fiscal Year;
(e) European Borrowers may make capital contributions to their
respective Subsidiaries (and Tempur Deutschland GmbH may make capital
contributions to its Subsidiaries) which do not in the aggregate exceed in any
Fiscal Year the following amounts: (x) with respect to Subsidiaries formed in
such Fiscal Year under clause (ii) of Section 3.6(b), $2,000,000 (or the
Equivalent Amount in an Alternative Currency), and (y) with respect to any other
Subsidiaries, $2,000,000 (or the Equivalent Amount in an Alternative Currency),
in each case, or such higher amount up to but not exceeding $7,500,000 as the
Administrative Agent (after consultation with European Loan Agent) shall approve
in writing; provided that capital contributions made in compliance with Section
3.3(n) shall not be considered for purposes of calculating compliance with this
clause (iv);
(f) Each Credit Party may hold investments comprised of notes
payable, or stock or other securities issued by Account Debtors (excluding
Affiliates) to such Credit Party pursuant to negotiated agreements with respect
to settlement of such Account Debtor's Accounts with such Credit Party in the
ordinary course of business;
(g) Each Credit Party may maintain its existing investments in its
Subsidiaries as of the Closing Date;
(h) Other investments not exceeding $1,000,000 in the aggregate at
any time outstanding;
42
(i) Investments existing on the Closing Date, as set forth on
Schedule 3.3 and any renewals, amendments and replacements thereof that do not
increase the amount thereof;
(j) Investments consisting of securities, promissory notes or other
non-cash consideration received as proceeds of Asset Dispositions permitted by
Section 3.7(b), (d) and (e);
(k) Investments consisting of loans by Ultimate Holdco to employees
of any Credit Party which are used solely by such employees to simultaneously
purchase the Stock of Ultimate Holdco;
(l) Investments consisting of pledges or deposits required in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other social security or similar legislation;
(m) Investments consisting of pledges or deposits in connection with
the non-delinquent performance of bids, trade contracts or leases, in each case,
incurred in the ordinary course of business; and
(n) (i) Intermediate Holdco may make capital contributions to Tempur
France Sarl, and (ii) TWHC and DF may make capital contributions to each of
their respective Subsidiaries; provided that, in each case (x) such capital
contributions as received by such Subsidiary shall be used to pay down
intercompany payables owed to any of Intermediate Holdco, DF or TWHC within 2
weeks of receipt of such capital contributions, (y) until applied pursuant to
the foregoing clause (x), the proceeds of such capital contributions shall be
held in a bank account subject to a first priority Lien in favor of the European
Loan Agent and otherwise on terms satisfactory to the European Loan Agent, and
(z) the aggregate amount of such capital contributions made and not applied
pursuant to the foregoing clause (x) at any one time shall not exceed $3,500,000
in the aggregate;
(o) Any indemnity or other payments received by Intermediate Holdco
pursuant to the Merger Agreement may be distributed by Intermediate Holdco to
the Credit Party which has incurred the obligation or liability with respect to
which such payment has been made under the Merger Agreement, which distribution
may be made to such Credit Party through successive capital contributions to
other Credit Parties or through intercompany loans or advances; and
(p) Spanish Holdco shall promptly make capital contributions to TWHC,
and TWHC shall promptly make capital contributions to DF, of any interest paid
by DF to Spanish Holdco on any intercompany loans and advances permitted under
Section 3.l(r).
(q) Intermediate Holdco and any European Credit Party may make
capital contributions to any of their respective Subsidiaries comprised of notes
receivable owing by such Subsidiary; provided that such notes are thereafter
immediately cancelled by such Subsidiary.
3.4 Contingent Obligations. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly create or become or
be liable with respect to any Contingent Obligation except:
43
(a) Letter of Credit Obligations;
(b) Those resulting from Interest Rate Agreements entered into by any
Borrower pursuant to Section 2.8;
(c) Those resulting from Indebtedness permitted under Section 3.1(i);
(d) Those resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
(e) Those existing on the Closing Date and described in Schedule 3.4;
(f) Those arising under indemnity agreements to title insurers to
cause such title insurers to issue to any Authorized Agent mortgagee title
insurance policies;
(g) Those arising with respect to customary indemnification
obligations incurred in connection with Asset Dispositions permitted hereunder;
(h) Those incurred with respect to Indebtedness permitted by Section
3.1; provided that any such Contingent Obligation is subordinated to the
Obligations to the same extent as the Indebtedness to which it relates is
subordinated to the Obligations;
(i) Any other Contingent Obligation not expressly permitted by
clauses (a) through (h) above, so long as any such other Contingent Obligations,
in the aggregate at any time outstanding, do not exceed $500,000; and
(j) (A) Contingent Obligations to Dent-A-Med, Inc. pursuant to the
Dent-A-Med Facility and (B) Contingent Obligations of Tempur UK, Ltd. to a
third-party financial institution under a factoring and/or consumer financing or
similar arrangement in form and substance satisfactory to Authorized Agents;
provided that the amount of such Contingent Obligations do not exceed $6,000,000
in the aggregate outstanding at any time.
3.5 Restricted Payments. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly declare, order, pay, make
or set apart (in trust or otherwise) any sum for any Restricted Payment, except
that:
(a) Any Domestic Subsidiary may make payments and distributions to
Ultimate Holdco that are used by Ultimate Holdco to pay federal and state income
taxes then due and owing, franchise taxes and other similar expenses incurred in
the ordinary course of business; provided that such Credit Party's aggregate
contribution to taxes as a result of the filing of a consolidated or combined
return by Ultimate Holdco shall not be greater, nor the aggregate receipt of tax
benefits less, than they would have been had such Credit Party not filed a
consolidated or combined return with Ultimate Holdco;
(b) (i) Any Credit Party that is a direct Subsidiary of Holdco may
pay dividends to Holdco, (ii) DF may pay dividends to TWHC and TWHS, (iii) TWHS
may pay dividends to TWHC, (iv) TWHC may pay dividends to Spanish Holdco, (v)
Spanish Holdco may pay dividends to Holdco, (vi) Holdco, Tempur France Sarl and
Tempur Italia Srl may pay
44
dividends to Intermediate Holdco, and (vii) Intermediate Holdco may pay
dividends to Ultimate Holdco, in each case, solely to the extent necessary,
either individually or in the aggregate to permit Ultimate Holdco, and Ultimate
Holdco may use such dividends (x) to effect the repurchase, redemption,
acquisition, cancellation or other retirement for value of the Stock of Ultimate
Holdco or to effect the termination of options to purchase Stock of Ultimate
Holdco, in each case, held by former managers and employees of Ultimate Holdco
or its Subsidiaries (or their Family Members (as defined in the Stockholders
Agreement) or their estates or beneficiaries under their estates) upon the
death, disability, retirement or termination of employment of any such former
managers or employees, and (y) to make payments on the subordinated promissory
notes referred to in Section 3.1(m); provided that (A) the sum of all such
Restricted Payments under this Section 3.5(b) shall not exceed $500,000 in any
Fiscal Year or $2,000,000 during the term of this Agreement and (B) no Event of
Default exists at the time of such Restricted Payment or would occur as a result
thereof;
(c) (i) Any Credit Party that is a direct Subsidiary of Holdco may
pay dividends to Holdco, (ii) DF may pay dividends to TWHC and TWHS, (iii) TWHS
may pay dividends to TWHC, (iv) TWHC may pay dividends to Spanish Holdco, (v)
Spanish Holdco may pay dividends to Holdco, (vi) Holdco, Tempur France Sarl and
Tempur Italia Srl may pay dividends to Intermediate Holdco, and (vii)
Intermediate Holdco may pay dividends to Ultimate Holdco, in each case, solely
to the extent necessary to permit (x) Holdco, Intermediate Holdco, Spanish
Holdco and/or Ultimate Holdco to pay, and Holdco, Intermediate Holdco, Spanish
Holdco and/or Ultimate Holdco may pay, out-of-pocket general administrative
costs and expenses incurred in the ordinary course of business, including
accounting, legal and other professional fees, reimbursement of reasonable
expenses of directors and executive compensation; provided that such dividend
payments shall not exceed $500,000 in the aggregate in any Fiscal Year for all
of the Credit Parties; and (y) Intermediate Holdco to make, and Intermediate
Holdco may make, payments under the Employment Agreements and the agreements
listed on Schedule 3.21;
(d) Subsidiaries of a Borrower may make Restricted Payments pro rata
to the Stockholders of such Subsidiary and Subsidiaries of Tempur Holding GmbH
may make Restricted Payments to Tempur Holding GmbH;
(e) Borrowers may make payments in respect of the Subordinated Notes
to the extent holders of the Subordinated Notes are permitted to accept such
payments by the terms of Article 12 of the Subordinated Notes Indenture;
(f) Any Credit Party may make payments to another Credit Party in the
ordinary course of business in respect of the Intercompany Obligations; provided
that either (i) both before and after giving effect to such payments, no Default
or Event of Default has occurred and is continuing and, with respect to payments
by any US Credit Party to any European Credit Party, US Borrowing Availability
is at least $5,000,000 or (ii) the Administrative Agent has otherwise consented
in writing to such payments;
(g) Ultimate Holdco may accrue (but not pay) dividends on the
Preferred Stock; and
45
(h) DF may make distributions to TWHC and TWHS, and TWHS may in turn
make distributions to TWHC, and TWHC may in turn promptly make distributions to
Spanish Holdco, in each case, for the purpose of enabling Spanish Holdco to
promptly make the intercompany loans and advances referred to in Section 3.1(r).
3.6 Restriction on Fundamental Changes. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly: (a)
amend, modify or waive any term or provision of its organizational documents,
including its articles of incorporation, certificates of designations pertaining
to preferred stock, by laws, partnership agreement or operating agreement in any
manner adverse to the rights and benefits of the Agents and Lenders under the
Loan Documents or the ability of the Credit Parties to repay the Obligations
unless required by law, except that Tempur France Sarl may change its corporate
form from an Sarl to an SAS under the laws of France, provided that Tempur
France SAS duly executes and delivers, or causes to be duly executed and
delivered, Collateral Documents and such further instruments in form and
substance satisfactory to the Authorized Agents, and does or causes to be done
such further acts as may be necessary or proper in the opinion of Administrative
Agent to evidence, continue, preserve and perfect the guarantees and security
for the Obligations provided by the Credit Parties and to carry out more
effectively the provisions and purposes of the Credit Agreement or any other
Loan Document; (b) enter into any transaction of merger or consolidation except,
upon not less than five (5) Business Days prior written notice to Administrative
Agent, (i) any US Credit Party existing on the Closing Date (other than Ultimate
Holdco) may merge with another US Credit Party; provided that a US Borrower
shall be the survivor of any such merger to which a US Borrower is a party, (ii)
TWHC may form directly-owned Subsidiaries organized under the laws of a foreign
jurisdiction for the purpose of sales and distribution of products in such
jurisdiction; provided that at or prior to formation of such Subsidiary, such
Subsidiary shall have executed and delivered a guarantee of the Obligations of
the European Credit Parties in favor of the European Security Agent and the
European Security Agent shall have been granted a first priority perfected Lien
(subject to Permitted Encumbrances) in the assets and Stock of such Subsidiary
to secure the Obligations of the European Credit Parties in form and substance
satisfactory to the Authorized Agents, and the Credit Parties shall have
executed such other documents, certificates and legal opinions and taken such
other action as may be required by the Administrative Agent in connection
therewith, (iii) any US Borrower may form a direct wholly-owned Domestic
Subsidiary to own and to exploit certain trademarks and to sell and distribute
products consistent with the description of business on Schedule 3.9; provided
that within 10 Business Days of formation of such Subsidiary, such US Borrower
and Subsidiary shall have complied with the requirements of Section 2.7(c); (iv)
any US Borrower, Holdco or Intermediate Holdco may form a direct wholly-owned
Domestic Subsidiary to build, own and operate a new manufacturing plant in the
United States; provided that within 10 Business Days of formation of such
Subsidiary, such US Borrower and Subsidiary shall have complied with the
requirements of Section 2.7(c); (v) TWHC may dissolve Tempur World Holding
Sweden AB, and (vi) Intermediate Holdco and Holdco may enter into the Holdco
Merger; (c) liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except for any of the Specified Credit Parties; provided that the
proceeds from any such liquidation, wind-up or liquidation shall be promptly
applied pro rata to the remaining Scheduled Installments of the European Term
Loan A; (d) acquire by purchase or otherwise all or any substantial part of the
business or assets of any other Person, except that DF may transfer all of the
outstanding Stock held by it of each of Tempur Japan Yugen Kaisha and
46
Tempur UK, Ltd. to TWHC, and TPI may transfer all of the outstanding Stock held
by it of any of its Domestic Subsidiaries to Holdco; provided that on or before
such transfer each of Tempur Japan Yugen Kaisha and Tempur UK, Ltd., and such
Domestic Subsidiary of TPI duly execute and deliver, or cause to be duly
executed and delivered, Collateral Documents and such further instruments in
form and substance satisfactory to the Authorized Agents, and do or cause to be
done such further acts as may be necessary or proper in the opinion of
Administrative Agent to evidence, continue, preserve and perfect the guarantees
and security for the Obligations provided by the Credit Parties and to carry out
more effectively the provisions and purposes of the Credit Agreement or any
other Loan Document, and (e) each of the European Borrowers may reduce its share
capital in one or more consecutive transactions (not to exceed in the case of
DF, a reduction of 1,000,000 DKK par value shares in the aggregate and, in the
case of TWHC, a reduction by 500,000 DKK par value shares in the aggregate)
solely to the extent necessary to make any Restricted Payments permitted to be
made by such European Borrower under Section 3.5. In connection with any capital
contribution permitted in Sections 3.3(e), (n) and/or (q), any additional shares
or equity interests issued as a result of such capital contributions may be
cancelled and not subject to any pledge or security interest in favor of the
Administrative Agent, the European Loan Agent or the European Security Agent;
provided that such additional shares are cancelled during the same board or
shareholder meeting in which such shares are authorized and issued.
3.7 Disposal of Assets or Subsidiary Stock. The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly
convey, sell, lease (as lessor), sublease, transfer or otherwise dispose of, or
grant any Person an option to acquire, in one transaction or a series of related
transactions, any of its property, business or assets, whether now owned or
hereafter acquired, except for (a) sales of inventory to customers for fair
value in the ordinary course of business and dispositions of obsolete equipment
not used or useful in the business; (b) Asset Dispositions by Borrowers and
their Subsidiaries (excluding sales of Accounts and Stock of any of Ultimate
Holdco's Subsidiaries) if all of the following conditions are met (i) the market
value of assets sold or otherwise disposed of in any single transaction or
series of related transactions does not exceed $250,000 end the aggregate market
value of assets sold or otherwise disposed of in any Fiscal Year does not exceed
$500,000, (ii) the consideration received is at least equal to the fair market
value of such assets, (iii) the sole consideration received is cash, or as
otherwise approved by Administrative Agent with not less than 80% of
consideration in cash, (iv) the Net Proceeds of such Asset Disposition are
applied as required by Section 1.5(e), (v) after giving effect to the Asset
Disposition and the repayment of Indebtedness with the proceeds thereof,
Borrowers are in compliance on a pro forma basis with the covenants set forth in
Section 4 recomputed for the most recently ended quarter for which information
is available and is in compliance with all other terms and conditions of this
Agreement, and (vi) no Default or Event of Default then exists or would result
from such Asset Disposition; (c) sales of property (other than as permitted in
clause (a) above) to any other Credit Party not exceeding $250,000 in the
aggregate in any Fiscal Year; (d) Asset Dispositions set forth on Schedule 3.7;
provided that the sole consideration received is cash, or as otherwise approved
by Administrative Agent with not less than 80% of consideration in cash; (e)
sales of assets not otherwise permitted in clauses (a) through (d) above and (f)
through (h) below, in an aggregate amount not exceeding $1,000,000 with the
prior written consent of Administrative Agent; provided that the sole
consideration received is cash, or as otherwise approved by Administrative Agent
with not less than 80% of consideration in cash; (f) transfers of the Stock of
certain Credit Parties to TWHC
47
and Holdco permitted under Section 3.6(d); (g) the sale of defaulted consumer
accounts receivable that have been repurchased by a US Borrower, a European
Borrower or one of its direct Subsidiaries from consumer finance companies
pursuant to such Credit Party's contractual repurchase obligations; (h) the sale
of the German Property and (i) dispositions associated with the dissolution by
TWHC of Tempur World Holding Sweden AB. No European Credit Party shall license
or otherwise transfer any of its Intellectual Property rights for use in North
America nor sell or otherwise transfer any of its Licensed Products for use in
North America (or distribution rights in respect thereof) to any Person, without
the written consent of Administrative Agent, other than (x) Holdco and the US
Borrower, and (y) pursuant to the Canadian Distribution Agreement with respect
to Canada.
3.8 Transactions with Affiliates. The Credit Parties shall not and shall
not cause or permit their 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 management, consulting, investment
banking, advisory or other similar services) with any Affiliate or with any
director, officer or employee of any Credit Party, except (a) as set forth on
Schedule 3.8; (b) transactions in the ordinary course of and pursuant to the
reasonable requirements of the business of any such Credit Party or any of its
Subsidiaries and upon fair and reasonable terms which are no less favorable to
any such Credit Party or any of its Subsidiaries than would be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate and
are fully disclosed to Administrative Agent in advance in the case of any such
transaction or series of related transactions that involve the payments,
receipts or transfers of assets by any Credit Party in excess of $500,000 in the
aggregate; (c) payment of reasonable compensation (including reasonable bonus
and other reasonable incentive arrangements) to officers and employees for
services actually rendered to any such Credit Party or any of its Subsidiaries;
(d) payment of director's fees not to exceed $500,000 in the aggregate for any
Fiscal Year; (e) Restricted Payments permitted in Section 3.5 and the agreements
pursuant to which such Restricted Payments are required to be made; (f)
reimbursement of employee travel and lodging costs and other business expenses
incurred in the ordinary course of business; (g) capital contributions permitted
by Section 3.3(d) and (e); and (h) loans and advances to employees pursuant to
Section 3.3(c) and (k).
3.9 Conduct of Business. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly engage in any business
other than businesses of the type described on Schedule 3.9.
3.10 Changes Relating to Indebtedness. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly change or
amend the terms of any of its Indebtedness permitted by Section 3.1(b), (c),
(d), (j) or (k) if the effect of such amendment is to: (a) increase the interest
rate on such Indebtedness (b) change the dates upon which payments of principal
or interest are due on or principal amount of such Indebtedness; (c) change any
event of default or add or make more restrictive any covenant with respect to
such Indebtedness (d) change the redemption or prepayment provisions of such
Indebtedness; (e) change the subordination provisions thereof (or the
subordination terms of any guaranty thereof); (f) change or amend any other term
if such change or amendment would materially increase the obligations of the
obligor or confer additional material rights on the holder of such Indebtedness
in a manner adverse to any Credit Party or Lenders; or (g) increase the portion
of interest payable in cash
48
with respect to any Indebtedness for which interest is payable by the issuance
of payment-in kind notes or is permitted to accrue. This Section 3.10 shall not
limit or prohibit any prepayment of Indebtedness permitted under Section 3.19.
The Credit Parties shall not designate any Indebtedness other than the
Obligations hereunder as Designated Senior Debt under (and as defined in) the
Subordinated Notes Indenture.
3.11 Fiscal Year. No Credit Party shall change its Fiscal Year or permit
any of its Subsidiaries to change their respective fiscal years.
3.12 Press Release; Public Offering Materials. Each Credit Party executing
this Agreement agrees that neither it nor its Affiliates will in the future
issue any press releases or other public disclosure, including any prospectus,
proxy statement or other materials filed with any Governmental Authority
relating to a public offering of the Stock of any Credit Party, using the name
of either GE Capital, LBI, Nordea, or GE ELF or any of their respective
affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days' prior
notice to GE Capital, Nordea, or GE ELF, as applicable, and without the prior
written consent of GE Capital, LBI, Nordea, or GE ELF, as applicable, unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital, LBI, Nordea, or GE ELF, as applicable, before issuing such
press release or other public disclosure. Each Credit Party consents to the
publication by any Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Such Agent or such Lender shall provide a draft of any such tombstone or similar
advertising material to each Credit Party and each other Agent for review and
comment prior to the publication thereof. Each Agent reserves the right to
provide to industry trade organizations information necessary and customary for
inclusion in league table measurements.
3.13 Subsidiaries. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly establish, create or acquire
any new Subsidiary other than as permitted by Section 3.6.
3.14 Bank Accounts; Cash Management. The US Credit Parties shall not and
shall not cause or permit their Subsidiaries to establish any new bank accounts
without prior written notice to Administrative Agent and unless Administrative
Agent and the bank at which the account is to be opened enter into a tri-party
agreement regarding such bank account pursuant to which such bank acknowledges
the security interest of Administrative Agent in such bank account, agrees to
comply with instructions originated by Administrative Agent directing
disposition of the funds in the bank account without further consent from such
Credit Party or Subsidiary, and agrees to subordinate and limit any security
interest the bank may have in the bank account on terms satisfactory to
Administrative Agent. Each European Credit Party shall establish and maintain
the cash management systems as described in Annex I. The Credit Parties agree
that with respect to banks at which any bank account is maintained which is
subject to any such tri-party agreement in favor of any Authorized Agent, such
Agent may give notice (an "Activation Notice") implementing the cash sweep or
similar provisions of such agreement at any time at which (1) an Event of
Default has occurred and is continuing, (2) such Agent believes in its
reasonable credit judgment that based upon information available to it that an
Event of Default
49
exists or could reasonably be expected to occur; or (3) Administrative Agent
reasonably believes that an event or circumstance that is likely to have a
Material Adverse Effect has occurred.
3.15 Hazardous Materials. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities by the Credit Parties or any of their Subsidiaries
under, any Environmental Laws or Environmental Permits or (b) otherwise
adversely impact the value or marketability of any of the Real Estate or any of
the Collateral, other than such violations, Environmental Liabilities or adverse
impacts that could not reasonably be expected to have a Material Adverse Effect.
3.16 ERISA. The Credit Parties shall not and shall not cause or permit any
ERISA Affiliate to, cause or permit to occur an ERISA Event to the extent such
ERISA Event could reasonably be expected to have a Material Adverse Effect.
3.17 Sale Leasebacks. The Credit Parties shall not and shall not cause or
permit any of their Subsidiaries to engage in any sale leaseback, synthetic
lease or similar transaction involving any of its assets, except for the
leaseback for temporary office space needs of a portion of the property located
at Xxxx-Xxxx-Xxxxxxx 0, X-00000, Xxxxxxxxxx, Xxxxxxx by Tempur Deutschland GmbH
(the "German Property") in connection with the sale thereof.
3.18 Changes to Material Contracts. No Credit Party shall terminate or
change or amend the terms of the Merger Agreement, the Holdco License and
Distribution Agreement or the Sub-License and Distribution Agreements without
the prior written consent of the Administrative Agent (after consultation with
the European Loan Agent). Except as provided in the immediately preceding
sentence, no Credit Party shall change or amend, except for inconsequential
technical changes, the terms of any Related Transaction Documents (other than
the Subordinated Notes Documents), any Non-Competition Agreement or any
confidentiality or non-competition provisions of any Employment Agreement
without the prior written consent of the Administrative Agent (after
consultation with the European Loan Agent), which consent shall not be
unreasonably withheld (unless such change or amendment would adversely affect in
any respect the Lenders or the Agents or be reasonably likely to cause a
Material Adverse Effect, in which case such consent may be given or withheld in
the sole discretion of the Administrative Agent). No Credit Party shall change
or amend the terms of any Subordinated Notes Document to the extent prohibited
by the Subordinated Notes Indenture.
3.19 Prepayments of Other Indebtedness. The Credit Parties shall not,
directly or indirectly, voluntarily purchase, redeem, defease, prepay or set
aside in trust or otherwise any funds for the prepayment of any principal of,
premium, if any, interest or other amount payable in respect of any
Indebtedness, other than (i) the Obligations and those Contingent Obligations
existing on the Closing Date and set forth on Schedule 3.21; (ii) Indebtedness
secured by a Permitted Encumbrance if the asset securing such Indebtedness has
been sold or otherwise disposed of in accordance with Section 3.7(b); (iii)
intercompany Indebtedness reflecting amounts owing to Borrowers; (iv)
Indebtedness secured by the German Property in connection with the sale of the
German Property permitted by Section 3.7(h); and, (v) Indebtedness described in
Schedule 3.1 that is refinanced as permitted by Section 3.1(c) or (d). Without
the
50
prior written consent of Administrative Agent, the Credit Parties shall not
forgive principal of, premium, if any, interest or other amount payable in
respect of any intercompany Indebtedness other than intercompany Indebtedness
consisting of up to $10,000,000 in the aggregate of intercompany payables owed
by US Borrowers to DF.
3.20 Real Estate Purchases. No Credit Party shall purchase a fee simple
ownership interest in Real Estate without the prior written consent of the
Administrative Agent, except for the purchase of a fee simple ownership interest
in Real Estate by newly formed Subsidiary of US Borrowers for the purpose of
establishing a manufacturing facility (as permitted under Section 3.6(b)(iv)).
3.21 Activities of Ultimate Holdco, Intermediate Holdco, Holdco and Spanish
Holdco. Except as set forth on Schedule 3.21, from and after the consummation
of the Related Transactions on the Closing Date none of Ultimate Holdco,
Intermediate Holdco, Holdco or Spanish Holdco shall engage in any business or
have any assets or incur any Indebtedness or Contingent Obligation (other than
the Obligations) other than (i) owning the stock of Intermediate Holdco, Holdco,
Spanish Holdco, TWHC, TPUSA, TPI, Tempur France Sarl and Tempur Italian Srl in
accordance with the terms hereof, (ii) the entering into, and the performance of
obligations under, this Agreement, the other Loan Documents to which it is a
party and the Related Transaction Documents to which it is a party, (iii) the
receipt of the Recapitalization Dividend in accordance with the terms hereof,
(iv) activities associated with expenses and other amounts paid with any
distributions paid to Ultimate Holdco, Intermediate Holdco, Holdco or Spanish
Holdco which are permitted under Section 3.5, (v) the guarantee of the
Subordinated Notes by Ultimate Holdco, Intermediate Holdco and Holdco and (vi)
Intermediate Holdco entering into and performing its obligations under the
Additional Canadian Distribution Agreement. Notwithstanding the foregoing, each
of Ultimate Holdco, Intermediate Holdco, Holdco or Spanish Holdco may engage in
activities incidental to (a) the maintenance of its corporate existence in
compliance with applicable law, (b) legal, tax and accounting matters in
connection with any of the foregoing activities, (c) the licensing of
intellectual property rights by Holdco from the European Credit Parties and the
licensing of intellectual property rights by the US Borrowers and 1390658
Ontario, Inc. from Holdco and TWI and (d) the intercompany loans incurred as a
result of the upstream payment by US Borrowers of the Recapitalization Dividend,
the Additional Payment and the Additional Dividend permitted under Section 3.24.
3.22 Change of Corporate Name or Location. No Credit Party shall (a) change
its name as it appears in official filings in the jurisdiction of its
incorporation or other organization (b) change its chief executive office,
principal place of business, corporate offices or warehouses or locations at
which Collateral is held or stored, or the location of its records concerning
the Collateral, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its jurisdiction of
incorporation or other organization, or (e) change its jurisdiction of
incorporation or organization, in each case, without at least 30 days prior
written notice, or in the case of a change in warehouses or locations at which
Collateral is held or stored, 10 days prior written notice, to Appropriate Agent
and with Administrative Agent's prior written consent (or with respect to any
European Credit Party, the consent of Administrative Agent and European Security
Agent).
51
3.23 Operating Leases. Schedule 3.23 sets forth all Operating Leases for
which any Credit Party is lessee in effect on the Closing Date which provide for
annual payments in excess of $25,000 in the aggregate. No Credit Party shall
enter into any additional Operating Lease, if the aggregate of all payments
under Operating Leases (including those set forth on Schedule 3.23) payable by
all Credit Parties on a consolidated basis would exceed $4,000,000 for Fiscal
Year 2003, increasing by 10% per annum for each year thereafter.
3.24 Recapitalization Dividend, Additional Payment and Additional Dividend.
(a) Notwithstanding the provisions of Sections 3.1 and 3.5, within 30
days after the Closing Date, in the case of the Recapitalization Dividend and
the Additional Payment, and within 30 days after the incurrence of the
Additional Indebtedness, in the case of the Additional Dividend, (i) US
Borrowers may transfer to Holdco, (ii) Holdco may transfer to Intermediate
Holdco, (iii) Intermediate Holdco may transfer to Ultimate Holdco and (iv)
Ultimate Holdco may pay to its Stockholders and warrantholders amounts equal to
the Recapitalization Dividend and the Additional Dividend; provided that in the
case of the Additional Dividend, the sum of the Additional Dividend and the
Recapitalization Dividend shall not exceed the sum of the principal amount of
the Subordinated Notes and the Additional Subordinated Notes by more than
$60,000,000. In the case of clauses (i), (ii) and (iii) above, such transfers
may be accomplished by means of intercompany loans or dividends and in the case
of intercompany loans, such intercompany loan may be made directly by US
Borrowers to Intermediate Holdco or Ultimate Holdco.
(b) Notwithstanding the provisions of Sections 3.1 and 3.5, within 30
days after the Closing Date, (i) US Borrowers may transfer to Holdco, (ii)
Holdco may transfer to Intermediate Holdco and (iii) Intermediate Holdco may pay
to the applicable obliges, amounts equal to the Additional Payment. In the case
of clauses (i) and (ii) above, such transfers may be accomplished by means of
intercompany loans or dividends and in the case of intercompany loans, such
intercompany loan may be made directly by US Borrowers to Intermediate Holdco or
Ultimate Holdco.
3.25 Holdco Merger. Lenders hereby consent to the merger of Intermediate
Holdco with and into Ultimate Holdco (the "Holdco Merger") at any time following
the Closing Date. Upon consummation of the Holdco Merger, all intercompany loans
and dividends permitted to be made to Intermediate Holdco may be made to
Ultimate Holdco, as its successor, and all capital contributions and
transactions permitted to be made or engaged in by Intermediate Holdco may be
made or engaged in by Ultimate Holdco, as its successor.
SECTION 4.
FINANCIAL COVENANTS/REPORTING
-----------------------------
The Credit Parties covenant and agree that from and after the date
hereof until the Termination Date, Borrowers shall perform and comply with, and
shall cause each of the other Credit Parties to perform and comply with, all
covenants in this Section 4 applicable to such Person.
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4.1 Maximum Capital Expenditures. Ultimate Holdco and its Subsidiaries on
a consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods (the "Capex Limit"):
Maximum Capital
Expenditures
Period per Period
----------------------------------- ---------------
Fiscal Year ended December 31, 2003 $ 30,000,000
Fiscal Year ended December 31, 2004 $ 30,000,000
Fiscal Year ended December 31, 2005 $ 40,000,000
Fiscal Year ended December 31, 2006 $ 40,000,000
Fiscal Year ended December 31, 2007 $ 40,000,000
Fiscal Year ended December 31, 2008 $ 40,000,000
provided however, that commencing with the Fiscal Year ended December 31, 2003
the Capex Limit referenced above will be increased in any Fiscal Year by the
positive amount equal to the amount (if any), equal to the difference obtained
by taking the Capex Limit minus the actual amount of any Capital Expenditures
expended during such preceding Fiscal Year (the "Carry Over Amount"), and for
purposes of measuring compliance herewith, the Carry Over Amount shall be deemed
to be the last amount spent on Capital Expenditures in that succeeding Fiscal
Year and no Carry Over Amount once carried forward pursuant to this Section 4.1
may be carried forward to any Fiscal Year thereafter.
4.2 Minimum Fixed Charge Coverage Ratio. Ultimate Holdco and its
Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Quarter set forth below, a Fixed Charge Coverage Ratio for the 12-month period
then ended of not less than the following:
Minimum Fixed
Charge Coverage
Fiscal Quarter Ending Ratio
------------------------------ ---------------
September 30, 2003 1.05
December 31, 2003 1.05
March 31, 2004 1.05
June 30, 2004 1.05
September 30, 2004 1.05
December 31, 2004 1.05
March 31, 2005 1.10
June 30, 2005 1.10
September 30, 2005 1.10
December 31, 2005 1.10
March 31, 2006 1.10
June 30, 2006 and thereafter 1.15
4.3 Minimum Interest Coverage Ratio. Ultimate Holdco and its Subsidiaries
on a consolidated basis shall have at the end of each Fiscal Quarter, an
Interest Coverage Ratio, for the 12-month period then ended of not less than
3.0.
53
4.4 Maximum Leverage Ratio. Ultimate Holdco and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Leverage Ratio as of the last day of such Fiscal Quarter and for the
12-month period then ended of not more than the following:
Maximum
Fiscal Quarter Ending Leverage Ratio
---------------------------------- --------------
September 30, 2003 4.25
December 31, 2003 4.25
March 31, 2004 4.25
June 30, 2004 4.25
September 30, 2004 4.00
December 31, 2004 3.75
March 31, 2005 3.75
June 30, 2005 3.75
September 30, 2005 3.50
December 31, 2005 3.50
March 31, 2006 3.50
June 30, 2006 3.25
September 30, 2006 and thereafter 3.00
4.5 Maximum Senior Leverage Ratio. Ultimate Holdco and its Subsidiaries on
a consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Senior Leverage Ratio as of the last day of such Fiscal Quarter and for
the 12-month period then ended of not more than the following.
Maximum Senior
Fiscal Quarter Ending Leverage Ratio
------------------------------ --------------
September 30, 2003 2.75
December 31, 2003 2.75
March 31, 2004 2.65
June 30, 2004 2.60
September 30, 2004 2.50
December 31, 2004 2.25
March 31, 2005 2.25
June 30, 2005 2.25
September 30, 2005 2.15
December 31, 2005 2.15
March 31, 2006 and thereafter 2.00
4.6 Financial Statements and Other Reports. Ultimate Holdco will maintain,
and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of Financial Statements in conformity with GAAP (other than
monthly cash flow statements; provided that any accounts reflected in such cash
flow statements that are used in calculating compliance with Sections 4.1
54
through 4.5 shall be prepared in accordance with GAAP) (it being understood that
monthly Financial Statements are not required to have footnote disclosures), US
Borrower Representative will deliver each of the Financial Statements and other
reports described below to each Authorized Agent (and each Lender in the case of
the Financial Statements and other reports described in Sections 4.6(a), (b),
(d), (e), (f), (h), (i) and (o)).
(a) Monthly Financials. As soon as available and in any event within
thirty (30) days after the end of each month (including the last month of each
Fiscal Year), US Borrower Representative will deliver (1) the consolidated and
consolidating balance sheets of Ultimate Holdco and its Subsidiaries, as at the
end of such month, and the related consolidated and consolidating statements of
income and cash flow for such month and for the period from the beginning of the
then current Fiscal Year of Ultimate Holdco to the end of such month, (2) a
report setting forth in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the most recent Projections for the current Fiscal Year delivered pursuant
to Section 4.6(h) and (3) a schedule of the outstanding Indebtedness for
borrowed money of Ultimate Holdco and its Subsidiaries (excluding intercompany
loans and advances) describing in reasonable detail each such debt issue or loan
outstanding and the principal amount and amount of accrued and unpaid interest
with respect to each such debt issue or loan.
(b) Year-End Financials. As soon as available and in any event within
ninety (90) days after the end of each Fiscal Year, US Borrower Representative
will deliver (1) the consolidated and consolidating balance sheets of Ultimate
Holdco and its Subsidiaries, as at the end of such year, and the related
consolidated and consolidating statements of income, stockholders' equity and
cash flow for such Fiscal Year, (2) a schedule of the outstanding Indebtedness
for borrowed money of Ultimate Holdco and its Subsidiaries (excluding
intercompany loans and advances) describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or loan and (3) a report
with respect to the consolidated Financial Statements from a firm of certified
public accountants selected by Borrowers and reasonably acceptable to
Administrative Agent, which report shall be prepared in accordance with
Statement of Auditing Standards No. 58 (the "Statement") "Reports on Audited
Financial Statements" and such report shall be "Unqualified" (as such term is
defined in such Statement).
(c) Accountants' Reports. Promptly upon receipt thereof, US Borrower
Representative will deliver copies of all significant reports submitted by
Borrowers' firm of certified public accountants in connection with each annual,
interim or special audit or review of any type of the Financial Statements or
related internal control systems of Ultimate Holdco or its Subsidiaries made by
such accountants, including any comment letter submitted by such accountants to
management in connection with their services.
(d) Borrowing Base Certificates. As soon as available and in any
event within ten (10) Business Days after the end of each month, and from time
to time upon the request of Administrative Agent, US Borrower Representative
will deliver a US Borrowing Base Certificate (in substantially the same form as
Exhibit 4.6(d)(i), the "US Borrowing Base Certificate") as at the last day of
such period. As soon as available and in any event within ten (10) Business Days
after the end of each month, and from time to time upon the request of
55
European Loan Agent, European Borrower Representative will deliver a European
Borrowing Base Certificate (in substantially the same form as Exhibit
4.6(d)(ii), the "European Borrowing Base Certificate") as at the last day of
such period.
(e) Management Report. Together with each delivery of Financial
Statements of Ultimate Holdco pursuant to Sections 4.6 (a) and (b) ,US Borrower
Representative will deliver a management report (1) describing the operations
and financial condition of Ultimate Holdco and its Subsidiaries for the month
then ended and the portion of the current Fiscal Year then elapsed (or for the
Fiscal Year then ended in the case of year-end financials) and (2) discussing
the reasons for any significant variations. The information above shall be
presented in reasonable detail and shall be certified by the chief financial
officer of Ultimate Holdco to the effect provided under Section 3.02 of the
Xxxxxxxx-Xxxxx Act of 2002 as at the dates and for the periods indicated.
(f) Collateral Value Report. Upon the election of Administrative
Agent, which may be made not more than once each year prior to an Event of
Default and at any time while and so long as an Event of Default shall be
continuing, Administrative Agent may obtain, at Borrowers' expense, a report or
reports of a collateral auditor satisfactory to Administrative Agent (which may
be, or may be affiliated with, a Lender) with respect to the Eligible Accounts
and Eligible Inventory components included in any Borrowing Base, which report
shall indicate whether or not the information set forth in any Borrowing Base
Certificate most recently delivered is accurate and complete in all material
respects based upon a review by such auditor of the Eligible Accounts (including
verification with respect to the amount, aging, identity and credit of the
respective account debtors and the billing practices of Borrowers) and Eligible
Inventory (including verification as to the value, location and respective
types).
(g) Appraisals. From time to time after the occurrence and during the
continuance of an Event of Default, if any Authorized Agent or any Lender
determines that obtaining appraisals is necessary in order for such Agent or
such Lender to comply with applicable laws or regulations, Administrative Agent
will, at Borrowers' expense, obtain appraisal reports in form and substance and
from appraisers satisfactory to Administrative Agent stating the then current
fair market values of all or any portion of the Real Estate owned by Credit
Parties. In addition to the foregoing, at Borrower's expense, at any time while
and so long as an Event of Default shall have occurred and be continuing,
Administrative Agent may obtain appraisal reports in form and substance and from
appraisers satisfactory to Administrative Agent stating the then current market
values of all or any portion of the Real Estate and personal property owned by
any of the Credit Parties.
(h) Projections. To each Agent and Lenders, as soon as available, but
not later than 30 days after the end of each Fiscal Year, an annual operating
plan for Holdings, on a consolidated and consolidating basis, approved by the
Board of Directors of Ultimate Holdco, for the following Fiscal Year, which (i)
includes a statement of all of the material assumptions on which such plan is
based, (ii) includes monthly balance sheets, income statements and statements of
cash flows for the following year and (iii) integrates sales, gross profits,
operating expenses, operating profit, cash flow projections and Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
56
performance based on historical performance), and including plans for personnel,
Capital Expenditures and facilities.
(i) SEC Filings and Press Releases. Promptly upon their becoming
available, US Borrower Representative will deliver copies of (1) all Financial
Statements, reports, notices and proxy statements sent or made available by
Ultimate Holdco, Borrowers or any of their Subsidiaries to their Stockholders,
(2) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by Ultimate Holdco, Borrowers or any of their
Subsidiaries with any securities exchange or with the Securities and Exchange
Commission, any Governmental Authority or any private regulatory authority, and
(3) all press releases and other statements made available by Ultimate Holdco,
Borrowers or any of their respective Subsidiaries to the public concerning
developments in the business of any such Person.
(j) Events of Default; Etc. Promptly upon any officer of any Credit
Party obtaining knowledge of any of the following events or conditions, US
Borrower Representative shall deliver copies of all notices given or received by
such Credit Party with respect to any such event or condition and a certificate
of US Borrower Representative's chief executive officer specifying the nature
and period of existence of such event or condition and what action Ultimate
Holdco, Borrowers or any-of their Subsidiaries has taken, is taking and proposes
to take with respect thereto: (1) any condition or event that constitutes, or
which could reasonably be expected by such officer to result in the occurrence
of an Event of Default or Default; (2) any notice that any Person has given to
Ultimate Holdco, any Borrower or any of their Subsidiaries or any other action
taken with respect to a claimed default or event or condition of the type
referred to in Section 6.1(b); (3) any event or condition that could reasonably
be expected to result in any Material Adverse Effect; or (4) any default or
event of default with respect to any Indebtedness of any Borrower or any of its
Subsidiaries.
(k) Litigation. Promptly upon any officer of any Credit Party
obtaining knowledge of (l) the institution of any action, charge, claim, demand,
suit, proceeding, petition, governmental investigation, tax audit or arbitration
now pending or, to the best knowledge of such Credit Party after due inquiry,
threatened against or affecting any Credit Party or any of its Subsidiaries or
any property of any Credit Party or any of its Subsidiaries ("Litigation") not
previously disclosed by US Borrower Representative to Administrative Agent or
(2) any material development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against or affecting any Credit
Party or any property of any Credit Party which, in each case, could reasonably
be expected to have a Material Adverse Effect, US Borrower Representative will
promptly give notice thereof to Administrative Agent and provide such other
information as may be reasonably available to them to enable Administrative
Agent and its counsel to evaluate such matter.
(l) Notice of Corporate and other Changes. US Borrower Representative
shall provide prompt written notice of (1) all jurisdictions in which a Credit
Party becomes qualified after the Closing Date to transact business, (2) any
change after the Closing Date in the authorized and issued Stock of any Credit
Party or any Subsidiary of any Credit Party or any amendment to their articles
or certificate of incorporation, by laws, partnership agreement or other
organizational documents, (3) any Subsidiary created or acquired by any Credit
Party or any of its Subsidiaries after the Closing Date, such notice, in each
case, to identify the applicable
57
jurisdictions, capital structures or Subsidiaries, as applicable, and (4) any
other event that occurs after the Closing Date which would cause any of the
representations and warranties in Section 5 of this Agreement or in any other
Loan Document to be untrue or misleading in any material respect. The foregoing
notice requirement shall not be construed to constitute consent by any of the
Lenders to any transaction referred to above which is not expressly permitted by
the terms of this Agreement.
(m) Borrowing Base Reports. Appropriate Borrower Representative shall
deliver or cause to be delivered to:
(i) Administrative Agent, upon its request, and in any event
no less frequently than 12:00 p.m. (New York time) on the first Business Day of
each month (together with a copy of all or any part of the following reports
requested by any Lender in writing after the Closing Date), each of the
following reports, each of which shall be prepared by TPI as of the last day of
the immediately preceding week or the date 2 days prior to the date of any such
request: a summary of TPI's Inventory by location and type with a supporting
perpetual Inventory report, and a monthly trial balance showing TPI's Accounts
outstanding aged from invoice date as follows: 1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, in each case accompanied by such supporting
detail and documentation as shall be requested by Administrative Agent in its
reasonable discretion.
(ii) European Loan Agent, upon its request, and in any event no
less frequently than 12:00 p.m. (Local Time) on the first Business Day of each
month (together with a copy of all or any part of the following reports
requested by any Lender in writing after the Closing Date), each of the
following reports, each of which shall be prepared by the applicable European
Borrower as of the last day of the immediately preceding week or the date 2 days
prior to the date of any such request, a summary of each European Borrower's
Inventory by location and type with a supporting perpetual Inventory report, and
a monthly trial balance showing each European Borrower's Accounts outstanding
aged from invoice date as follows: to 30 days, 31 to 60 days, 61 to 90 days and
91 days or more, in each case, accompanied by such supporting detail and
documentation as shall be requested by European Loan Agent in its reasonable
discretion.
(n) Other Information. With reasonable promptness, US Borrower
Representative will deliver such other information and data with respect to any
Credit Party or any Subsidiary of any Credit Party as from time to time may be
reasonably requested by any Authorized Agent.
(o) Compliance and Excess Cash Flow Certificate. Together with each
delivery of Financial Statements of Ultimate Holdco and its Subsidiaries
pursuant to Sections 4.6(a) and (b), US Borrower Representative will deliver a
fully and properly completed Compliance and Excess Cash Flow Certificate (in
substantially the same form as Exhibit 4.6(o) (the "Compliance and Excess Cash
Flow Certificate") signed by Appropriate Borrower Representative's chief
executive officer or chief financial officer.
(p) Taxes. US Borrower Representative shall provide prompt written
notice of (i) the execution or filing with the IRS or any other Governmental
Authority of any agreement or other document extending, or having the effect of
extending, the period for assessment or
58
collection of any Charges by any Credit Party or any of its Subsidiaries and
(ii) any agreement by any Credit Party or any of its Subsidiaries or request
directed to any Credit Party or any of its Subsidiaries to make any adjustment
under IRC Section 481(a), by reason of a change in accounting method or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
4.7 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement. For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to such terms in
conformity with GAAP Financial statements and other information furnished to
Administrative Agent pursuant to Section 4.6 or any other section (unless
specifically indicated otherwise) shall be prepared in accordance with GAAP
(other than monthly cash flow statements; provided that any accounts reflected
in such cash flow statements that are used in calculating compliance with
Sections 4.1 through 4.5 shall be prepared in accordance with GAAP) as in effect
at the time of such preparation; provided that no Accounting Change shall affect
financial covenants, standards or terms in this Agreement; provided further that
Borrowers shall prepare footnotes to the Financial Statements required to be
delivered hereunder that show the differences between the Financial Statements
delivered (which reflect such Accounting Changes) and the basis for calculating
financial covenant compliance (without reflecting such Accounting Changes).
Borrowers shall deliver a certified schedule along with Financial Statements
required to be delivered hereunder detailing each difference between such
Financial Statements and the basis for calculating financial covenant compliance
resulting from any Accounting Change. All such adjustments described in clause
(c) of the definition of the term Accounting Changes resulting from expenditures
made subsequent to the Closing Date (including capitalization of costs and
expenses or payment of pre-Closing Date liabilities) shall be treated as
expenses in the period the expenditures are made.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce Agents and Lenders to enter into the Loan Documents, to make
Loans and to issue or cause to be issued Letters of Credit, Borrowers and the
other Credit Parties executing this Agreement, jointly and severally, represent,
warrant and covenant to each Agent and each Lender that the following statements
are and, after giving effect to the Related Transactions, will remain true,
correct and complete until the Termination Date with respect to all Credit
Parties:
5.1 Disclosure. No statement, representation or warranty of any Credit
Party contained in this Agreement, the Financial Statements referred to in
Section 5.5, the other Related Transactions Documents or any other document,
certificate or written statement furnished to any Agent or any Lender by or on
behalf of any such Person for use in connection with the Loan Documents or the
Related Transactions Documents contains any untrue statement of a material fact
or omitted, omits or will omit to state a material fact necessary in order to
make the statements contained herein or therein not misleading in light of the
circumstances in which the same were made.
5.2 No Material Adverse Effect. Since December 31, 2002, there have been
no events or changes in facts or circumstances affecting any Credit Party or any
of its Subsidiaries
59
which individually or in the aggregate have had or could reasonably be expected
to have a Material Adverse Effect and that have not been disclosed herein or in
the attached Disclosure Schedules.
5.3 No Conflict. The consummation of the Related Transactions does not and
will not violate or conflict with any laws, rules, regulations or orders of any
Governmental Authority or violate, conflict with, result in a breach of, or
constitute a default (with due notice or lapse of time or both) under any
Contractual Obligation or organizational documents of any Credit Party or any of
its Subsidiaries other than any such violations, conflicts, breaches or defaults
that could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
5.4 Organization, Powers, Capitalization and Good Standing.
(a) Organization and Powers. Each of the Credit Parties and each of
their Subsidiaries is duly organized, validly existing and in good standing (or
the equivalent in non-US jurisdictions) under the laws of its jurisdiction of
organization and qualified to do business in all states where such qualification
is required except where failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect. The jurisdiction of organization and
all jurisdictions in which each Credit Party is qualified to do business are set
forth on Schedule 5.4(a). Each of the Credit Parties and each of their
Subsidiaries has all requisite organizational power and authority to own and
operate its properties, to carry on its business as now conducted and proposed
to be conducted, to enter into each Related Transactions Document to which it is
a party and to incur the Obligations, grant liens and security interests in the
Collateral and carry out the Related Transactions.
(b) Capitalization. As of the Closing Date: (i) the authorized Stock
of each of the Credit Parties and each of their Subsidiaries is as set forth on
Schedule 5.4(b); (ii) all issued and outstanding Stock of each of the Credit
Parties and each of their Subsidiaries is duly authorized and validly issued,
fully paid, nonassessable, free and clear of all Liens other than those in favor
of Authorized Agents, and such Stock was issued in compliance with all
applicable state, federal and foreign laws concerning the issuance of
securities; (iii) the identity of the holders of the Stock of each of the Credit
Parties and the percentage of their fully diluted ownership of the Stock of each
of the Credit Parties is set forth on Schedule 5.4(b); and (iv) no Stock of any
Credit Party or any of their Subsidiaries, other than those described above, are
issued and outstanding. Except as provided in Schedule 5.4(b), as of the Closing
Date, there are no preemptive or other outstanding rights, options, warrants,
conversion rights or similar agreements or understandings for the purchase or
acquisition from any Credit Party or any of their Subsidiaries of any Stock of
any such entity.
(c) Binding Obligation. This Agreement is, and the other Related
Transactions Documents when executed and delivered will be, the legally valid
and binding obligations of the applicable parties thereto, each enforceable
against each of such parties, as applicable, in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganizations,
moratorium or other laws affecting creditor's rights generally and the effect of
general principles of equity.
60
5.5 Financial Statements and Projections. All Financial Statements
concerning Ultimate Holdco and its Subsidiaries which have been or will
hereafter be furnished to Agents and Lenders pursuant to this Agreement,
including those listed below, have been or will be prepared in accordance with
GAAP (other than monthly cash flow statements; provided that any accounts
reflected in such cash flow statements that are used in calculating compliance
with Sections 4.1 through 4.5 shall be prepared in accordance with GAAP)
consistently applied (except as disclosed therein) and do or will present fairly
the financial condition of the entities covered thereby as at the dates thereof
and the results of their operations for the periods then ended, subject to, in
the case of unaudited Financial Statements, the absence of footnotes and normal
year end adjustments.
(a) The consolidated balance sheets at December 31, 2002 and the
related statement of income of Ultimate Holdco and its Subsidiaries, for the
Fiscal Year then ended, audited by Ernst & Young LLP.
(b) The unaudited consolidated balance sheet at June 30, 2003 and the
related statement of income of Ultimate Holdco and its Subsidiaries for the six
(6) months then ended.
The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.6(h) are based upon estimates and
assumptions stated therein, all of which the Credit Parties believe, as of the
Closing Date, to be reasonable and fair in light of current conditions and
current facts known to the Credit Parties and, as of the Closing Date, reflect
the Credit Parties good faith and reasonable estimates of the future financial
performance of the Credit Parties and of the other information projected
therein, for the periods set forth therein. The Projections constitute a
reasonable basis as of the date hereof for the assessment of the future
performance of the Credit Parties, on a consolidated basis, during the periods
indicated therein (it being recognized by the Agents and the Lenders that the
Projections as they relate to future events are not to be viewed as facts and
that actual results during the period or periods covered by financial
information may vary from the projected results set forth therein by a material
amount), and all material assumptions used in the preparation of the Projections
are set forth in the notes thereto.
5.6 Intellectual Property. Each of the Credit Parties and its Subsidiaries
owns, is licensed to use or otherwise has the right to use, all Intellectual
Property used and sufficient for the conduct of its business as currently
conducted that is material to the condition (financial or other), business or
operations of such Credit Party and its Subsidiaries and all such Intellectual
Property is identified on Schedule 5.6 and fully protected and/or duly and
properly registered, filed or issued in the appropriate office and jurisdictions
for such registrations, filings or issuances. As of the Closing Date, except as
disclosed in Schedule 5.6, the use of such Intellectual Property by the Credit
Parties and their Subsidiaries and the conduct of their businesses does not and
has not been alleged by any Person to infringe on the rights of any Person.
Except as otherwise described in Schedule 5.6, as of the Closing Date no Credit
Party is a party to or bound by any agreement or contract (whether written or
oral) containing any covenant prohibiting any Credit Party from competing in any
business of any kind in any territory or from competing with any Person, or
prohibiting any Credit Party from doing any kind of business with any person.
61
5.7 Investigations, Audits, Etc. As of the Closing Date, except as set
forth on Schedule 5.7, to the best knowledge of any Credit Party, no Credit
Party or any of their Subsidiaries is the subject of any review or audit by the
IRS or any Governmental Authority or any other governmental investigation
concerning the violation or possible violation of any law.
5.8 Employee Matters. Except as set forth on Schedule 5.8, (a) no Credit
Party or Subsidiary of a Credit Party nor any of their respective employees is
subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending with respect to the employees of any
Credit Party or any of their Subsidiaries and no union or collective bargaining
unit has sought such certification or recognition with respect to the employees
of any Credit Party or any of their Subsidiaries, (c) there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
any Credit Party after due inquiry, threatened between any Credit Party or any
of their Subsidiaries and its respective employees, other than employee
grievances arising in the ordinary course of business which could not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect and (d) hours worked by and payment made to employees of each Credit
Party and each of their Subsidiaries comply with the Fair Labor Standards Act
and each other federal, state, local or foreign law applicable to such matters.
As of the Closing Date, except as set forth on Schedule 5.8, neither Borrower
nor any of their respective Subsidiaries is party to an employment contract in
which compensation exceeds $100,000 per annum.
5.9 Solvency. Each of the Credit Parties and its Subsidiaries is Solvent.
5.10 Litigation; Adverse Facts. Except as set forth on Schedule 5.10 there
are no judgments outstanding against any Credit Party or any of its Subsidiaries
or affecting any property of any Credit Party or any of its Subsidiaries, nor is
there any Litigation pending, or to the best knowledge of any Credit Party
threatened, against any Credit Party or any of its Subsidiaries which, in each
case or in the aggregate, could reasonably be expected to result in any Material
Adverse Effect.
5.11 Use of Proceeds; Margin Regulations
(a) No part of the proceeds of any Loan will be used for "buying" or
"carrying" "margin stock" within the respective meanings of such terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect or for any other purpose that violates the
provisions of the regulations of the Board of Governors of the Federal Reserve
System. If requested by Administrative Agent, each Credit Party will furnish to
each Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form G 3 or FR Form 0 1, as applicable, referred to
in Regulation U.
(b) Borrowers shall utilize the proceeds of the Loans solely to fund
a portion of the Recapitalization Dividend, to pay the Additional Payments in an
aggregate amount not to exceed $40,000,000, to pay in full the Mezzanine Debt
and to pay fees and expenses with respect to the Related Transactions, and for
the financing of Borrowers' ordinary working capital and general corporate
needs. To the greatest extent possible Borrowers will use the proceeds of the
Subordinated Notes to pay the Recapitalization Dividend. Borrowers shall utilize
the proceeds
62
of the Additional Indebtedness solely to fund the Additional Dividend and any
related fees, costs and expenses. Schedule 5.11 contains a description of
Borrowers' sources and uses of funds as of the Closing Date, including Loans and
Letter of Credit Obligations to be made or incurred on that date, and a funds
flow memorandum detailing how funds from each source are to be transferred for
particular uses.
5.12 Ownership of Property; Liens. As of the Closing Date, the real estate
("Real Estate") listed in Schedule 5.12 constitutes all of the real property
owned, leased, subleased, or used (pursuant to any arrangement or agreement,
written, oral or tacit) by any Credit Party or any of its Subsidiaries. As of
the Closing Date, except with respect to Real Estate having an aggregate fair
market value of less than $250,000, each of the Credit Parties and each of its
Subsidiaries owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Schedule 5.12, and copies of all such leases or a
summary of terms thereof reasonably satisfactory to Administrative Agent have
been delivered to Administrative Agent. Schedule 5.12 further describes any Real
Estate with respect to which any Credit Party or any of its Subsidiaries is a
lessor, sublessor or assignor as of the Closing Date. As of the Closing Date,
except with respect to personal property having an aggregate fair market value
of less than $250,000, each of the Credit Parties and each of its Subsidiaries
also has good and marketable title to, or valid leasehold interests in, all of
its personal property and assets. As of the Closing Date, none of the properties
and assets of any Credit Party or any of its Subsidiaries are subject to any
Liens other than Permitted Encumbrances, and there are no facts, circumstances
or conditions known to any Borrower that may result in any Liens (including
Liens arising under Environmental Laws) other than Permitted Encumbrances
against the properties or assets of any Credit Party or any of its Subsidiaries.
As of the Closing Date, each of the Credit Parties and each of its Subsidiaries
has received all deeds, assignments, waivers, consents, nondisturbance and
attornment or similar agreements, bills of sale and other documents, and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Credit Party's or Subsidiary's right, title and
interest in and to all such Real Estate and other properties and assets as of
the Closing Date. Schedule 5.12 also describes any purchase options, rights of
first refusal or other similar contractual rights pertaining to any Real Estate.
As of the Closing Date, no portion of any Credit Party's or any of its
Subsidiaries' Real Estate has suffered any material damage by fire or other
casualty loss that has not heretofore been repaired and restored in all material
respects to its original condition or otherwise remedied. As of the Closing
Date, all material permits required to have been issued or appropriate to enable
the Real Estate to be lawfully occupied and used for all of the purposes for
which it is currently occupied and used have been lawfully issued and are in
full force and effect.
5.13 Environmental Matters
(a) Except as set forth in Schedule 5.13, as of the Closing Date: (i)
the Real Estate is free of contamination from any Hazardous Material except for
such contamination that could not reasonably be expected to adversely impact the
value or marketability of such Real Estate and that could not reasonably be
expected to have a Material Adverse Effect; (ii) no Credit Party and no
Subsidiary of a Credit Party has caused or suffered to occur any Release of
Hazardous Materials on, at, in, under, above, to, from or about any of their
Real Estate other than in compliance with Environmental Laws that could
reasonably be expected to have a Material
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Adverse Effect; (iii) the Credit Parties and their Subsidiaries are and have
been in compliance with all Environmental Laws, except for such noncompliance
that could not reasonably be expected to have a Material Adverse Effect; (iv)
the Credit Parties and their Subsidiaries have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as proposed
to be conducted, except where the failure to so obtain or comply with such
Environmental Permits could not reasonably be expected to have a Material
Adverse Effect, and all such Environmental Permits are valid, uncontested and in
good standing; (v) no Credit Party and no Subsidiary of a Credit Party is
involved in operations or knows of any facts, circumstances or conditions,
including any Releases of Hazardous Materials, that are likely to result in any
Environmental Liabilities of such Credit Party or Subsidiary which could
reasonably be expected to have a Material Adverse Effect, and no Credit Party or
Subsidiary of a Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material that seeks damages, penalties, fines, costs or
expenses in excess of $100,000 in the aggregate or injunctive relief against, or
that alleges criminal misconduct by any Credit Party or any Subsidiary of a
Credit Party; (vii) no notice has been received by any Credit Party or any
Subsidiary of a Credit Party identifying any of them as a "potentially
responsible party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Credit Parties, there are no facts,
circumstances or conditions that may result in any of the Credit Parties or
their Subsidiaries being identified as a "potentially responsible party" under
CERCLA or analogous state statutes; and (viii) the Credit Parties have provided
to Administrative Agent copies of all existing environmental reports, reviews
and audits and all written information that has been provided to any Credit
Party pertaining to actual or potential material Environmental Liabilities, in
each case relating to any of the Credit Parties or their Subsidiaries. DF does
not use, and shall not use, any chlorinated solvents in its business or
operations.
(b) Each Credit Party hereby acknowledges and agrees that no Agent
(i) is now, nor has ever been, in control of any of the Real Estate or affairs
of such Credit Party or its Subsidiaries, and (ii) has the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's or
its Subsidiaries' conduct with respect to the ownership, operation or management
of any of their Real Estate or compliance with Environmental Laws or
Environmental Permits.
5.14 ERISA
(a) Schedule 5.14 lists as of the Closing Date all Plans and
separately identifies all Pension Plans, including Title IV Plans, Multiemployer
Plans, ESOPs and Welfare Plans, including all Retiree Welfare Plans. Copies of
all such listed Plans, together with a copy of the latest form IRS/DOL
5500-series for each such Plan have been delivered to the Administrative Agent.
Except with respect to Multiemployer Plans, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC (or an application for such determinations
has been filed with the IRS and there is a remaining period of time under
applicable Treasury regulations or IRS pronouncements in which to apply for such
determinations and make any amendments necessary to obtain such
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determinations), and to the knowledge of any Borrower nothing has occurred that
would cause the loss of such qualification or tax exempt status. Each Plan is in
material compliance with the applicable provisions of ERISA and the IRC,
including the timely filing of all reports required under the IRC or ERISA,
including the statement required by 29 CFR Section 2520.104 23. Neither any
Credit Party nor ERISA Affiliate has failed to make any contribution or pay any
amount due as required by either Section 412 of the IRC or Section 302 of ERISA.
Neither any Credit Party nor ERISA Affiliate has engaged in a "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC, in
connection with any Plan, that would subject any Credit Party to a material tax
on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of
the IRC.
(b) Except as set forth in Schedule 5.14: (i) no Title IV Plan has
any Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) as of the Closing Date, there are no
pending, or to the knowledge of any Borrower, threatened claims (other than
claims for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any Person as fiduciary or sponsor of
any Plan; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably
expects to incur any liability as a result of a complete or partial withdrawal
from a Multiemployer Plan; (v) within the last five years no Title IV Plan of
any Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 404(b)(l) of ERISA, nor
has any Title IV Plan of any Credit Party or ERISA Affiliate (determined at any
time within the past five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(l4) of ERISA) of any Credit Party or ERISA Affiliate; (vi) except in the
case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than 10% of fair market value of the assets of any
Plan measured on the basis of fair market value as of the latest valuation date
of any Plan; and (vii) no liability under any Title IV Plan has been satisfied
with the purchase of a contract from an insurance company that is not rated
"AAA" by S&P or an equivalent rating by another nationally recognized rating
agency.
(c) With respect to each scheme or arrangement mandated by a
government other than the United States providing for post-employment benefits
(a "Foreign Government Scheme or Arrangement") and with respect to each employee
benefit plan maintained or contributed to by any Credit Party or any Subsidiary
of any Credit Party that is not subject to United States law providing for
post-employment benefits (a "Foreign Plan"): (i) all material employer and
employee contributions required by law or by the terms of any Foreign Government
Scheme or Arrangement or any Foreign Plan have been made, or, if applicable,
accrued, in accordance with normal accounting practices; (ii) the liability of
each Credit Party and each Subsidiary of a Credit Party with respect to a
Foreign Plan is reflected in accordance with normal accounting practices on the
financial statements of such Credit Party or such Subsidiary, as the case may
be; and (iii) each Foreign Plan required to be registered has been registered
and has been maintained in good standing with applicable regulatory authorities
unless, in each case, the failure to do so would not be reasonably likely to
have a Material Adverse Effect.
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5.15 Brokers. No broker or finder acting on behalf of any Credit Party or
Affiliate thereof brought about the obtaining, making or closing of the Loans or
the Related Transactions, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
5.16 Deposit and Disbursement Accounts. Schedule 5.16 lists all banks and
other financial institutions at which any Credit Party maintains deposit or
other accounts as of the Closing Date, including any disbursement accounts, and
such Schedule correctly identifies the name and address of each depository, the
name in which the account is held, a description of the purpose of the account,
and the complete account number therefor.
5.17 Agreements and Other Documents. As of the Closing Date, each Credit
Party has provided to Administrative Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it is subject and each of which is listed in Schedule
5.17: supply agreements and purchase agreements not terminable by such Credit
Party within sixty (60) days following written notice issued by such Credit
Party and involving transactions in excess of $250,000 per annum; leases of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $100,000 per annum; licenses and permits
held by the Credit Parties, the absence of which could reasonably be expected to
have a Material Adverse Effect; instruments and documents evidencing any
Indebtedness or Contingent Obligation, in excess of $50,000 in the aggregate, of
such Credit Party and any Lien granted by such Credit Party with respect
thereto; instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party; any distribution agreements or other agreements providing for the
distribution of the Credit Parties' products; and any other Material Contracts
(as defined in the Merger Agreement).
5.18 Insurance. Schedule 5.18 lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by each Credit
Party, as well as a summary of the key business terms of each such policy such
as deductibles, coverage limits and term of policy.
5.19 Government Regulation. No Credit Party is an "investment company" or
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940. No Credit Party is subject to regulation under
the Public Utility Holding Company Act of 1935 or the Federal Power Act.
5.20 Subordinated Notes Documents. As of the Closing Date, Borrowers have
delivered to Administrative Agent a complete and correct copy of the
Subordinated Notes Documents (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith). No Credit Party is in default in
the performance or compliance with any provisions thereof. None of the
representations or warranties of any Credit Party in the Subordinated Notes
Documents contain any untrue statement of a material fact or omit any fact
necessary to make the statements therein not misleading. Notwithstanding
anything contained in the Subordinated Notes Documents to the contrary, such
representations and warranties of the Credit Parties are incorporated into this
Agreement by this Section 5.20.
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5.21 Taxes. All Federal and other material tax returns, reports and
statements, including information returns, required by any Governmental
Authority to be filed by any Credit Party have been filed with the appropriate
Governmental Authority.
5.22 Collateral Documents. Attached hereto as Schedule 5.22 are true,
correct and complete copies of each of the schedules to each of the Collateral
Documents updated to, and true, correct and complete as of the Closing Date.
5.23 Intercompany Payables. As of June 30, 2003, the intercompany payables
listed in Schedule 5.23 constitute all of the intercompany payables owed by any
Credit Party to any other Credit Party.
SECTION 6.
DEFAULT, RIGHTS AND REMEDIES
----------------------------
6.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
(a) Payment. (1) Failure to pay any installment or other payment of
principal of any Loan when due, or to repay the Revolving Loans to reduce their
balance to the maximum amount of Revolving Loans then permitted to be
outstanding or to reimburse any L/C Issuer for any payment made by such L/C
Issuer under or in respect of any Letter of Credit when due or (2) failure to
pay, within two (2) Business Days after the due date, any interest on any Loan
or any other amount due under this Agreement or any of the other Loan Documents;
or
(b) Default in Other Agreements. (1) Any Credit Party or any of its
Subsidiaries fails to pay when due or within any applicable grace period any
principal or interest on Indebtedness (other than the Loans) or any Contingent
Obligations having a principal amount in excess of $2,000,000 or (2) breach or
default of any Credit Party or any of its Subsidiaries (which breach or default
is not waived or cured), or the occurrence of any condition or event, with
respect to any Indebtedness (other than the Loans) or any Contingent
Obligations, if the effect of such breach, default or occurrence is to cause or
to permit the holder or holders then to cause, Indebtedness and/or Contingent
Obligations having an aggregate principal amount in excess of $2,000,000 to
become or be declared due prior to their stated maturity; or
(c) Breach of Certain Provisions. Failure of any Credit Party to
perform or comply with any term or condition contained in that portion of
Section 2.2 relating to the Credit Parties' obligation to maintain insurance,
Section 2.3, Section 3 or Section 4; or
(d) Breach of Warranty. Any information contained in any US Borrowing
Base Certificate or European Borrowing Base Certificate is untrue or incorrect
in any respect (other than inadvertent errors or immaterial errors, in each
case, not exceeding $500,000 in the aggregate in any US Borrowing Base
Certificate or European Borrowing Base Certificate, as applicable), or any
representation, warranty, certification or other statement made by any Credit
Party in any Loan Document or in any statement or certificate (other than a US
Borrowing Base Certificate or European Borrowing Base Certificate) at any time
given by such Person in writing pursuant to or in connection with any Loan
Document is false in any material respect (without duplication of materiality
qualifiers contained therein) on the date made; or
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(e) Other Defaults Under Loan Documents. Any Credit Party defaults in
the performance of or compliance with any term contained in this Agreement or
the other Loan Documents (other than occurrences described in other provisions
of this Section 6.1 for which a different grace or cure period is specified, or
for which no cure period is specified and which constitute immediate Events of
Default) and such default is not remedied or waived within thirty (30) days
after the earlier of (1) receipt by any Borrower Representative of notice from
any Authorized Agent or Requisite Lenders of such default or (2) actual
knowledge of any Borrower or any other Credit Party of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (1) A court
enters a decree or order for relief with respect to any Credit Party in an
involuntary case under the Bankruptcy Code, or any other applicable federal,
state or foreign bankruptcy or similar law, which decree or order is not stayed
or other similar relief is not granted under any applicable federal, state or
foreign law; or (2) the continuance of any of the following events for sixty
(60) days unless dismissed, bonded or discharged: (a) an involuntary case is
commenced against any Credit Party, under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect; or (b) a decree or order of a
court for the appointment of a receiver, liquidator, examiner, administrator,
administrative receiver, sequestrator, trustee, custodian or other officer
having similar powers over any Credit Party, or over all or a substantial part
of its property, is entered; or (c) a receiver, liquidator, examiner,
administrator, administrative receiver, sequestrator, trustee or other custodian
(or similar official) is appointed without the consent of a Credit Party, for
all or a substantial part of the property of the Credit Party; or
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1) any
Credit Party commences a voluntary case under the Bankruptcy Code, or any other
applicable federal, state or foreign bankruptcy or similar law, or consents 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 consents to the
appointment of or taking possession by a receiver, trustee or other custodian
(or similar official) for all or a substantial part of its property; or (2) any
Credit Party makes any assignment, or otherwise enters into a scheme,
reorganization or other arrangement, for the benefit of creditors; or (3) the
Board of Directors of any Credit Party adopts any resolution or otherwise
authorizes action to approve any of the actions referred to in this Section
6.1(g); or
(h) Judgment and Attachments. Any money judgment, writ or warrant of
attachment, or similar process (other than those described elsewhere in this
Section 6.1) involving an amount in the aggregate at any time in excess of
$1,000,000 (in either case to the extent not adequately covered by insurance in
Authorized Agent's sole discretion as to which the insurance company has
acknowledged coverage) is entered or filed against one or more of the Credit
Parties or any of their respective assets and remains unsatisfied, undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in any event
later than five (5) Business Days prior to the date of any proposed sale
thereunder; or
(i) Dissolution. Any order, judgment or decree is entered against any
Credit Party (other than a Specified Credit Party) decreeing the dissolution or
split up of such Credit Party and such order remains undischarged or unstayed
for a period in excess of fifteen (15) days; or
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(j) Solvency. Any Credit Party ceases to be Solvent, fails to pay its
debts as they become due or admits in writing its present or prospective
inability to pay its debts as they become due; provided that any Specified
Credit Party may cease to be Solvent for any consecutive twelve-month period; or
(k) Invalidity of Loan Documents. Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, or any Credit Party denies that it has any further liability under any
Loan Documents to which it is party, or gives notice to such effect; or
(l) Damage; Casualty. Any event occurs, whether or not insured or
insurable, as a result of which income-producing activities cease or are
substantially curtailed at any facility of any Credit Party generating more than
20% of the consolidated net income of Ultimate Holdco and their Subsidiaries for
the Fiscal Year preceding such event and such cessation or curtailment continues
for more than 30 days (except to the extent any net income from such activities
which is not generated as a result of such event is replaced or covered by
payments made under business interruption insurance); or
(m) Change of Control. A Change of Control occurs; or
(n) Subordinated Indebtedness. The failure of any Credit Party or any
creditor of any Borrower or any of its Subsidiaries to comply with the terms of
the Subordinated Notes Indenture or any other subordination or intercreditor
agreement or any subordination provisions of any note or other document running
to the benefit of any Agent or Lenders, or any party subject to or bound by such
agreement challenges the enforceability thereof; or
(o) License Agreements. Any material default or breach (after giving
effect to any applicable cure periods) by any Borrower occurs and is continuing
under any of the following agreements or any of the following agreements shall
be terminated for any reason: (i) the Holdco License and Distribution Agreement
or (ii) the Sub-License and Distribution Agreements; or
(p) Collateral Documents. Any default by any Credit Party in the
observance or performance of any covenant or agreement contained or incorporated
by reference in any Collateral Document and such default shall continue beyond
the grace period, if any, provided in such Collateral Document; or
(q) Environmental Liabilities. Any Credit Party shall incur
Environmental Liabilities which could reasonably be expected to exceed
$1,000,000 (net of any insurance proceeds paid to such Credit Party in
connection with such Environmental Liabilities and environmental indemnity
proceeds paid to such Credit Party pursuant to Section 9.02 of the Merger
Agreement and, in each case, applied to such Environmental Liabilities) in any
consecutive twelve-month period with respect to any Release or threatened
Release (or any reasonably related Release or Releases) or presence of Hazardous
Material at any single location; or any litigation is commenced against any
Credit Party that seeks Environmental Liabilities which could reasonably be
expected to exceed $1,000,000 (net of any insurance proceeds paid to such Credit
Party in connection with such Environmental Liabilities and environmental
69
indemnity proceeds paid to such Credit Party pursuant to Section 9.02 of the
Merger Agreement and, in each case, applied to such Environmental Liabilities)
in any consecutive twelve-month period with respect to any Release or threatened
Release (or any reasonably related Release or Releases) or presence of Hazardous
Material at any single location and such Litigation is not, within 60 days after
the commencement thereof, discharged or dismissed; or
(r) ERISA and Foreign Plans. Any Credit Party (i) shall, or shall
cause or permit any ERISA Affiliate to, cause or permit to occur an event that
could result in the imposition of a Lien under Section 412 of the IRC or Section
302 or 4068 of ERISA or cause or permit to occur an ERISA Event to the extent
such ERISA Event could reasonably be expected to have a Material Adverse Effect;
(ii) shall cause or permit an event that could result in the imposition of a
Lien with respect to any Foreign Plan; or (iii) shall cause or permit the fair
market value of the assets of any funded Foreign Plan, the liability of each
insurer for such Foreign Plan funded through insurance or the book reserve
established for such Foreign Plan, together with any accrued contributions, to
become insufficient to satisfy all the accrued benefit obligations with respect
to all current and former participants in such Foreign Plan according to the
actuarial assumptions and valuations most recently used to account for such
obligations in accordance with generally accepted accounting principles to the
extent such underfunding could reasonably be expected to have a Material Adverse
Effect.
6.2 Suspension or Termination of Commitments. Upon the occurrence of any
Default or Event of Default, Administrative Agent may, and at the request of
Requisite Lenders, Administrative Agent shall, without notice or demand,
immediately suspend or terminate all or any portion of Lenders' obligations to
make additional Revolving Credit Advances or issue or cause to be issued Letters
of Credit under the Revolving Loan Commitments; provided that if the subject
condition or event is waived by Requisite Lenders or cured within any applicable
grace or cure period, the Revolving Loan Commitments shall be reinstated.
6.3 Acceleration and other Remedies. Upon the occurrence of any Event of
Default described in Sections 6.1(f) or 6.1(e) the Commitments shall be
immediately terminated and all of the Obligations, including the Revolving
Loans, shall automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived by Borrowers, and the Commitments shall thereupon terminate.
Upon the occurrence and during the continuance of any other Event of Default,
Administrative Agent may, and at the request of the Requisite Lenders,
Administrative Agent shall, by written notice to each Borrower Representative
(a) reduce the aggregate amount of the Commitments from time to time, (b)
declare all or any portion of the Loans and all or any portion of the other
Obligations to be, and the same shall forthwith become, immediately due and
payable together with accrued interest thereon, (c) terminate all or any portion
of the obligations of Authorized Agents, L/C Issuers and Lenders to make
Revolving Credit Advances and issue Letters of Credit, (d) demand that Borrowers
immediately deliver cash to Appropriate Agent for the benefit of L/C Issuers
(and Borrowers shall then immediately so deliver) in an amount equal to 103% of
the aggregate outstanding Letter of Credit Obligations and (e) exercise any
other remedies which may be available under the Loan Documents or applicable
law. US Borrowers hereby grant to Administrative Agent, for the benefit of US
L/C Issuers and each Lender with a participation in any US Letters of Credit
then outstanding, a security interest in such cash collateral to secure all
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of the US Letter of Credit Obligations. Any such cash collateral shall be made
available by Administrative Agent to US L/C Issuers to reimburse US L/C Issuers
for payments of drafts drawn under such US Letters of Credit and any Fees,
Charges and expenses of US L/C Issuers with respect to such US Letters of Credit
and the unused portion thereof, after all such US Letters of Credit shall have
expired or been fully drawn upon, shall be applied to repay any other
Obligations. After all such US Letters of Credit shall have expired or been
fully drawn upon and all Obligations shall have been satisfied and paid in full,
the balance, if any, of such cash collateral shall be returned to US Borrowers.
European Borrowers hereby grant to European Security Agent, for the benefit of
European L/C Issuers and each Lender with a participation in any European
Letters of Credit then outstanding, a security interest in such cash collateral
to secure all of the European Letter of Credit Obligations. Any such cash
collateral shall be made available by European Security Agent to European L/C
Issuers to reimburse European L/C Issuers for payments of drafts drawn under
such European Letters of Credit and any Fees, Charges and expenses of European
L/C Issuers with respect to such European Letters of Credit and the unused
portion thereof, after all such European Letters of Credit shall have expired or
been fully drawn upon, shall be applied to repay any other Obligations of the
European Credit Parties. After all such European Letters of Credit shall have
expired or been fully drawn upon and all Obligations of the European Credit
Parties shall have been satisfied and paid in full, the balance, if any, of such
cash collateral shall be returned to European Borrowers. Borrowers shall from
time to time execute and deliver to Appropriate Agent such further documents and
instruments as such Agent may request with respect to such cash collateral. If
any Event of Default has occurred and is continuing, European Loan Agent and
European Security Agent may (with the prior written consent the Administrative
Agent) and, at the written request of the Requisite Lenders or the
Administrative Agent, shall, exercise any rights and remedies provided to the
European Loan Agent and European Security Agent under the Loan Documents or at
law or equity. If any Event of Default has occurred and is continuing, and the
Obligations have been declared to be or otherwise become immediately due and
payable, Administrative Agent may (and at the written request of the Requisite
Lenders, shall), cause the Escrow Agent to release the Escrow Materials to it
pursuant to the terms of the Escrow Agreement (it being understood that Agents
and Lenders may not cause the Escrow Materials to be so released except as
provided in this sentence).
6.4 Performance by Agent. If any Credit Party shall fail to perform any
covenant, duty or agreement contained in any of the Loan Documents, any
Authorized Agent may perform or attempt to perform such covenant, duty or
agreement on behalf of such Credit Party after the expiration of any cure or
grace periods set forth herein. In such event, such Credit Party shall, at the
request of any Authorized Agent, promptly pay any amount reasonably expended by
any Authorized Agent in such performance or attempted performance to such Agent,
together with interest thereon at the highest rate of interest in effect upon
the occurrence of an Event of Default as specified in Section 1.2(d) from the
date of such expenditure until paid. Notwithstanding the foregoing, it is
expressly agreed that no Agent shall have any liability or responsibility for
the performance of any obligation of any Credit Party under this Agreement or
any other Loan Document.
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6.5 Application of Proceeds and Payments.
(a) So long as no Default or Event of Default has occurred and is
continuing, (i) payments matching specific scheduled payments then due shall be
applied to those scheduled payments; (ii) voluntary prepayments of Revolving
Loans shall be applied as determined by Appropriate Borrower Representative and
voluntary prepayments of Term Loans shall be applied as in accordance with
Section 1.5(a); and (iii) mandatory prepayments shall be applied as set forth in
Section 1.5(e); provided that prior to application of any funds to any payments
or prepayments of principal of any Loan the Appropriate Agent, in its
discretion, may (provided that European Loan Agent shall first consult with the
Administrative Agent), apply such funds to Fees and any expenses of the Agents
then reimbursable hereunder and to interest then due on the Loans, ratably in
proportion to the interest accrued as to each Loan; provided further that no
payments from any European Credit Party shall be applied to principal of the US
Term Loans or US Revolving Loan or any interest thereon or any Fees payable with
respect thereto. All payments and prepayments applied to a particular Loan shall
be applied ratably to the portion thereof held by each Lender as determined by
its Pro Rata Share. Except as otherwise provided in Sections 6.5(b) and (c), as
to any other payment, and as to all payments made when an Event of Default has
occurred and is continuing or following the Commitment Termination Date, each
Borrower hereby irrevocably waives the right to direct the application of any
and all payments received from or on behalf of such Borrower, and each Borrower
hereby irrevocably agrees that Administrative Agent shall have the continuing
exclusive right to direct Appropriate Agent to apply any and all such payments
against the Obligations of Borrowers as Administrative Agent may deem advisable
notwithstanding any previous entry by Appropriate Agent in the Loan Account or
any other books and records; provided that no payments from any European Credit
Party shall be applied to principal of the US Term Loans or US Revolving Loan or
any interest thereon or any Fees payable with respect thereto. In the absence of
a specific determination by Administrative Agent with respect thereto, payments
shall be applied to amounts then due and payable in the following order: (1) to
each Agent's expenses and Fees reimbursable hereunder; (2) to interest on the
Loans, ratably in proportion to the interest accrued as to each Loan; (3) to
principal payments on the Loans and to provide cash collateral for Letter of
Credit Obligations in the manner described in Section 6.3, ratably to the
aggregate, combined principal balance of the Loans and outstanding Letter of
Credit Obligations; and (4) to all other Obligations, including expenses of
Lenders to the extent reimbursable under Section 1.3(e).
(b) Upon the exercise of any rights and remedies by any Authorized
Agent under any of the Loan Documents with respect to Collateral pledged by any
US Credit Party to secure the Obligations of the US Credit Parties after an
Event of Default shall have occurred and be continuing, any and all Proceeds
received by any Authorized Agent pursuant to any of the Loan Documents with
respect to such Collateral shall be applied and distributed by such Agent in the
following order: (1) to expenses of the Administrative Agent and Fees
reimbursable hereunder; (2) to interest on the US Revolving Loan and the US Term
Loans ratably in proportion to the interest accrued thereon; (3) to principal of
the US Revolving Loan and the US Term Loans ratably in proportion to the
outstanding principal amounts thereof; (4) to all other Obligations of the US
Lenders to the extent reimbursable under Section 1.3(e), ratably in proportion
to the unpaid amount thereof; (5) to fees and expenses of the European Loan
Agent, the European Funding Agent and the European Security Agent; (6) to
interest on the European Revolving Credit Advances and the European Term Loan A
ratably in proportion to interest
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accrued thereon; (7) to principal of the European Revolving Credit Advances and
the European Term Loan A ratably in proportion to the outstanding principal
amounts thereof; (8) to all other Obligations of the European Lenders to the
extent reimbursable under Section 1.3(e), ratably in proportion to the unpaid
amount thereof; and (9) to the US Borrowers or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct.
(c) Upon the exercise of any rights and remedies by European Loan
Agent, European Funding Agent or European Security Agent under any of the Loan
Documents with respect to Collateral pledged by any European Credit Party to
secure the Obligations of the European Credit Parties after an Event of Default
shall have occurred and be continuing, any and all Proceeds received by European
Loan Agent, the European Funding Agent or the European Security Agent pursuant
to any of the Loan Documents with respect to such Collateral shall be applied
and distributed by European Loan Agent, European Funding Agent or European
Security Agent in the following order: (1) to Fees and expenses of the European
Loan Agent, European Funding Agent or European Security Agent reimbursable
hereunder; (2) to interest on the European Revolving Loan and the European Term
Loan A ratably in proportion to the interest accrued thereon; (3) to principal
of the European Revolving Credit Advances and the European Term Loan A ratably
in proportion to the outstanding principal amounts thereof; (4) to all other
Obligations of the European Lenders to the extent reimbursable under Section
1.3(e) ratably in proportion to the unpaid amount thereof; and (5) to the
European Borrowers or to whomsoever may be lawfully entitled to receive the same
or as a court of competent jurisdiction may direct.
6.6 Loss Sharing. On the first day on which any Bankruptcy Event shall
occur in respect of any Credit Party or upon the date of acceleration of all or
part of the Obligations in accordance with Section 6.2 (collectively, the
"Reallocation Date"), the Lenders shall automatically and without further act be
deemed to have purchased participations in the Loans such that as a result of
such deemed purchases, such Lender shall hold an interest in every one of the
Loans (including principal, interest and fee obligations of each Borrower in
respect of each such Loan), whether or not such Lender shall previously have
participated therein, equal to such Lender's Reallocation Percentage thereof.
Simultaneously with any Reallocation Exchange, as to each US Lender that has
notified Administrative Agent and US Borrower Representatives prior to the
Reallocation Date that it has elected to have this sentence applied to it, the
interests in Loans denominated in Alternative Currencies to be received by such
US Lender shall automatically and with no further action required, be converted
into the Equivalent Amount in Dollars and after the Reallocation Date all
amounts accruing and owing to such US Lender in respect of such Obligations
shall accrue and be payable in Dollars. Each Lender, each Person acquiring a
participation from any Lender as contemplated by Section 8.1, each Borrower and
each other Credit Party hereby consents to the Reallocation Exchange.
SECTION 7.
CONDITIONS TO LOANS
-------------------
The obligations of Lenders and L/C Issuers to make Loans and to issue
or cause to be issued Letters of Credit are subject to satisfaction of all of
the applicable conditions set forth below.
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7.1 Conditions to Initial Loans. The obligations of Lenders and L/C
Issuers to make the Loans and to issue or cause to be issued Letters of Credit
on the Closing Date are in addition to the conditions precedent specified in
Section 7.2, subject to the delivery of all documents listed on, the taking of
all actions set forth on and the satisfaction of all other conditions precedent
listed in the Closing Checklist attached hereto as Annex C, all in form and
substance, or in a manner, satisfactory to Authorized Agents and Lenders. In
addition, on the Closing Date, the following conditions must be satisfied in
form and substance satisfactory to Authorized Agents and Lenders:
(a) The US Borrowers shall have received not less than $140,000,000
in gross proceeds from the issuance of the Subordinated Notes;
(b) Senior Leverage Ratio and Leverage Ratio (including all funded
debt and Letters of Credit to the extent drawn upon) of Ultimate Holdco and its
Subsidiaries, on a consolidated basis determined in accordance with GAAP, as of
and for the twelve months ending on the last day of the most recent calendar
month ending prior to the Closing Date will be less than or equal to 2.5:1.0 and
4.1:1.0, respectively;
(c) Borrowers shall have combined US Borrowing Availability and
European Borrowing Availability of at least $10,000,000 in the aggregate after
giving effect to the Loans and Letters of Credit to be made on the Closing Date;
(d) The EBITDA of Ultimate Holdco and its Subsidiaries, on a
consolidated basis determined in accordance with GAAP, for the twelve month
period ending on June 30, 2003 is at least $95,000,000; and
(e) Immediately following funding of the Loans and the Letters of
Credit on the Closing Date, the outstanding Obligations (including all loans and
Letters of Credit to the extent drawn upon) shall be equal to or less than
$240,000,000.
Notwithstanding the foregoing, the parties hereto acknowledge and agree that so
long as European Lenders have executed this Agreement as of August 15, 2003 and
all other conditions precedent to the initial Loans have been met, waived or
deferred pursuant to the Post Closing Agreement, the US Lenders may fund the
initial US Loans on August 15, 2003, and the European Lenders may fund the
initial European Loans on August 18, 2003.
7.2 Conditions to All Loans. Except as otherwise expressly provided
herein, no Lender or L/C Issuer shall be obligated to fund any Advance or incur
any Letter of Credit Obligation, if, as of the date thereof (the "Funding
Date"):
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect in any material
respect (without duplication of any materiality qualifier contained therein) as
of such date, except to the extent that such representation or warranty
expressly relates to an earlier date, in which case, such representation or
warranty is untrue or incorrect in any material respect (without duplication of
any materiality qualifier contained therein) as of such date, and Administrative
Agent or Requisite Lenders have determined not to make such advance or incur
such Letter of Credit Obligation as a result of the fact that such warranty or
representation is untrue or incorrect;
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(b) any Default or Event of Default has occurred and is continuing or
would result after giving effect to any Advance (or the incurrence of any Letter
of Credit Obligation), and Administrative Agent or Requisite Lenders shall have
determined not to make any Advance or incur any Letter of Credit Obligation as a
result of that Default or Event of Default; or
(c) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding amount of the Revolving Loan
would exceed remaining Borrowing Availability (except as provided in Section
1.l(b)(i) or (ii), as applicable).
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, an IBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 7.2 have been satisfied and (ii) a reaffirmation by Borrowers of
their guaranties and of the granting and continuance of Authorized Agents'
Liens, on behalf of themselves and Lenders, pursuant to the Collateral
Documents.
SECTION 8.
ASSIGNMENT AND PARTICIPATION
----------------------------
8.1 Assignment and Participations.Subject to the terms of this Section
8.1, any Lender may make an assignment to a Qualified Assignee or a Related Fund
of, or sale of participations in, at any time or times, the Loan Documents,
Loans, Letter of Credit Obligations and the Commitments or any portion thereof
or interest therein, including such Lender's rights, title, interests, remedies,
powers or duties thereunder. Any assignment by a Lender shall: (i) with respect
to the Revolving Loans, the US Term Loan A, the European Term Loan A, the Letter
of Credit Obligations and the related Loan Documents, require the consent of US
Borrower Representative (which consent shall not be unreasonably withheld or
delayed); provided that US Borrower Representative's consent shall not be
necessary with respect to any assignment made (1) to any assignee who is then a
Lender or an Affiliate of a Lender or a Related Fund or (2) during the existence
of an Event of Default; (ii) require the consent of: (1) with respect to the US
Revolving Loan, the US Term Loan A, the US Letter of Credit Obligations, the US
Revolving Loan Commitments, the US Term Loan A Commitments and the related Loan
Documents, Administrative Agent (which consent shall not be unreasonably
withheld or delayed with respect to a Qualified Assignee), and (2) with respect
to the European Revolving Loan, the European Term Loan A, the European Letter of
Credit Obligations, the European Revolving Loan Commitments, the European Term
Loan Commitments and the related Loan Documents, notice to each of the European
Loan Agent and the European Funding Agent and the consent of Administrative
Agent and the European Loan Agent (which consent, in each case, shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee); provided
that Administrative Agent's and European Loan Agent's consent shall not be
necessary with respect to any assignment made to any assignee who is then a
Lender or an Affiliate of a Lender or a Related Fund; (iii) be conditioned on
such assignee Lender representing to the assigning Lender and the Agents that it
is purchasing the applicable portions of the Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iv) after giving effect to any such partial assignment, (1) in the
case of any assignment of Revolving Loans, US Term Loan A or European Term Loan
A, the assignee Lender shall have a Commitment with respect to any such Loan
assigned of at least $2,500,000 and the assigning
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Lender shall have retained a Commitment (unless the assigning Lender shall have
assigned its entire Commitment) in respect of such Loan in an amount at least
equal to $2,500,000 (or such lesser amount as agreed to by US Borrower
Representative and Administrative Agent) and (2) in the case of US Term Loan B,
the assignee Lender and its Affiliates and Related Funds shall have Commitments
of at least $1,000,000 in the aggregate and the assigning Lender and its
Affiliates and Related Funds shall have Commitments (unless the assigning Lender
shall have assigned its entire Commitment) of at least $1,000,000 in the
aggregate (or such lesser amount as agreed to by US Borrower Representative and
Administrative Agent); (v) with respect to the assignment of any US Lender's US
Revolving Loan Commitment and/or US Term Loan Commitment require a payment to
Administrative Agent of an assignment fee of $3,500 and with respect to the
assignment of any European Lender's European Revolving Loan Commitment and/or
European Term Loan Commitment require a payment to European Funding Agent of an
assignment fee of $1,500; provided that such assignment fee shall not be payable
for any assignment to any assignee who is then a Lender or a Related Fund or an
Affiliate of a Lender or any assignment to or from GE Capital, LCPI or LBI; and
(vi) shall require the execution of an assignment agreement (an "Assignment
Agreement") substantially in the form attached hereto as Exhibit 8.1 and
otherwise in form and substance reasonably satisfactory to, and acknowledged by,
Administrative Agent). Notwithstanding the above, Administrative Agent may in
its sole and absolute discretion permit any assignment by a Lender to a Person
or Persons that are not Qualified Assignees. An assignment or sale of
participation interests in US Term Loan B shall not require the consent of any
Borrower or any Agent. In the case of an assignment by a Lender under this
Section 8.1(a), the assignee shall have, to the extent of such assignment, the
same rights, benefits and obligations as all other Lenders hereunder. In
addition, any assignment by a European Lender of its Loans and Commitments shall
only be made as an integrated part of (and any such assignment shall be deemed
to be and constitute evidence of) an assignment on a proportionate basis of such
Lender's rights and interest under the Collateral Documents to which it is a
party and in the Collateral created or granted thereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof from and after the date of such assignment.
Borrowers hereby acknowledge and agree that any assignment shall give rise to a
direct obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender." In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event any Lender
assigns or otherwise transfers all or any part of the Obligations, such Lender
shall so notify the Borrower Representatives and Borrowers shall, upon the
request of such Lender, execute new Notes in exchange for the Notes, if any,
being assigned. The assignee Lender shall notify the Borrower Representatives of
its notice address pursuant to Section 9.3. Any assignee Lender which fails to
so notify the Borrower Representatives of its notice address shall not be
entitled to any notices, reports or other information required to be delivered
to any Lender by any Credit Party hereunder until such time as such assignee
Lender provides Borrower Representatives with its notice address.Notwithstanding
the foregoing provisions of this Section 8.1(a), (a) any Lender may at any time
pledge the Obligations held by it and such Lender's rights under this Agreement
and the other Loan Documents to a Federal Reserve Bank, (b) any Lender that is
an investment fund may assign, in whole or in part, the Obligations held by it
and such Lender's rights under this Agreement and the other Loan Documents to
another investment fund managed by the same investment advisor or pledge such
Obligations and rights to a trustee for the benefit of its
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investors and (c) any Lender may assign the Obligations to an Affiliate of such
Lender or to a Person that is a Lender prior to the date of such assignment.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Any participation by a Lender shall be
subject, after giving effect to any partial participation, to the same minimum
principal and/or Commitment amount requirements as any partial assignment, as
set forth in Section 8.1(a). Solely for purposes of Sections 1.8, 1.9, 8.3 and
9.1. Borrowers acknowledge and agree that a participation shall give rise to a
direct obligation of Borrowers to the participant and the participant shall be
considered to be a "Lender." Except as set forth in the preceding sentence no
Borrower or any other Credit Party shall have any obligation or duty to any
participant. No Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 8.1, no Lender
shall, as between Borrowers and that Lender, or any Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party shall assist each Lender permitted to sell
assignments or participations under this Section 8.1 as required to enable the
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be reasonably requested and the prompt
preparation of informational materials for, and the participation of management
in meetings with, potential assignees or participants, all on a timetable
established by any Agent in its sole discretion. Each Credit Party executing
this Agreement shall certify' the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their respective affairs, in all material
respects, contained in any selling materials provided by it and all other
information provided by it and included in such materials, except that any
Projections delivered by Borrowers shall only be certified by Borrowers as
having been prepared by Borrowers in compliance with the representations
contained in Section 5.5. Administrative Agent shall maintain, on behalf of
Borrowers, in its offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000 a "register" for recording the name, address and commitment of each
Lender. The entries in such register shall be presumptive evidence of the
amounts due and owing to each Lender in the absence of manifest error.
Borrowers, Agents and each Lender may treat each Person whose name is recorded
in such register pursuant to the terms hereof as a Lender for all purposes of
this Agreement. The register described herein shall be available for inspection
by the Borrowers and any Lender and any Authorized Agent, at any reasonable time
upon reasonable prior notice.
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(e) A Lender may furnish any information concerning Credit Parties in
the possession of such Lender from time to time to assignees, pledgees and
participants (including prospective assignees and participants); provided that
such Lender shall obtain from assignees, pledgees or participants
confidentiality covenants substantially equivalent to those contained in Section
9.13.
(f) So long as no Event of Default has occurred and is continuing, no
Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.8(a), increased
costs or an inability to fund IBOR Loans under Section 1.8(b), or withholding
taxes in accordance with Section 1.9.
8.2 Agents.
(a) Appointment. Each Lender hereby designates and appoints GE
Capital as Administrative Agent, GE ELF as European Loan Agent, HSBC as European
Funding Agent and Nordea as European Security Agent under this Agreement and the
other Loan Documents, and each Lender hereby irrevocably authorizes each
Authorized Agent to execute and deliver the Collateral Documents and to take
such action or to refrain from taking such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers as are set forth herein or therein, together with such other powers as
are reasonably incidental thereto. The provisions of this Section 8.2 are solely
for the benefit of Agents and Lenders and neither Borrowers nor any other Credit
Party shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
each Agent shall act solely as agent of Lenders and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for any Borrower or any other Credit Party or any other Person.
Each Agent may perform any of its duties hereunder, or under the Loan Documents,
by or through its agents or employees. No Agent shall have any duties or
responsibilities except as set forth in this Agreement and the other Loan
Documents.
(b) Nature of Duties. The duties of each Agent shall be mechanical
and administrative in nature. No Agent shall have or be deemed to have by reason
of this Agreement a fiduciary relationship in respect of any Lender. Nothing in
this Agreement or any of the Loan Documents or otherwise, express or implied, is
intended to or shall be construed to impose upon any Agent any obligations in
respect of this Agreement or any of the Loan Documents except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of each Credit Party in
connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of each Credit Party, and no Agent shall have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto
(other than as expressly required herein). If any Agent seeks the consent or
approval of any Lenders to the taking or refraining from taking any action
hereunder, then such Agent shall send notice thereof to each Lender. Each Agent
shall promptly notify each Lender any time that the Requisite Lenders have
instructed such Agent to act or refrain from acting pursuant hereto.
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(c) Rights, Exculpation; Etc. No Agent nor any of its officers,
directors, employees or agents shall be liable to any Lender for any action
taken or omitted by them hereunder or under any of the Loan Documents, or in
connection herewith or therewith, except that each Agent shall be liable to the
extent of its own gross negligence or willful misconduct as determined by a
final non-appealable order by a court of competent jurisdiction. No Agent shall
be liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them). In no event shall any Agent be liable for punitive, special,
consequential, incidental, exemplary or other similar damages. In performing its
functions and duties hereunder, each Agent shall exercise the same care which it
would in dealing with loans for its own account, but no Agent nor any of its
agents or representatives shall be responsible to any Lender for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility, or
sufficiency of this Agreement or any of the Loan Documents or the transactions
contemplated thereby, or for the financial condition of any Credit Party. No
Agent shall be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any of the Loan Documents or the financial condition of any Credit Party, or the
existence or possible existence of any Default or Event of Default. Each Agent
may at any time request instructions from Requisite Lenders or all affected
Lenders with respect to all actions or approvals which by the terms of this
Agreement or of any of the Loan Documents such Agent is permitted or required to
take or to grant. If such instructions are promptly requested, such Agent shall
be absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Requisite
Lenders or such other portion of the Lenders as shall be prescribed by this
Agreement. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders or all affected
Lenders, as applicable; and, notwithstanding the instructions of Requisite
Lenders or all affected Lenders, as applicable, no Agent shall have any
obligation to take any action if it believes, in good faith, that such action is
deemed to be illegal by such Agent or exposes such Agent to any liability for
which it has not received satisfactory indemnification in accordance with
Section 8.2(e). Each Lender acknowledges that it has, independently and without
reliance upon any Agent or any other Lender and based on the Financial
Statements referred to in Section 5.5 and such other documents and information
as it has deemed appropriate, made its own credit and financial analysis of the
Credit Parties and its own decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement. Each Lender acknowledges the
potential conflict of interest of each other Lender as a result of Lenders
holding disproportionate interests in the Loans, and expressly consents to, and
waives any claim based upon, such conflict of interest.
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(d) Reliance. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, fax or telegram) believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person, and with respect to all matters pertaining to this Agreement
or any of the Loan Documents and its duties hereunder or thereunder. Each Agent
shall be entitled to rely upon the advice of legal counsel, independent
accountants, and other experts selected by such Agent in its sole discretion.
(e) Indemnification. Lenders will reimburse and indemnify each Agent
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, attorneys' fees and expenses), advances or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by, or asserted against
such Agent in any way relating to or arising out of this Agreement or any of the
Loan Documents or any action taken or omitted to be taken by such Agent under
this Agreement or any of the Loan Documents, in proportion to each Lender's Pro
Rata Share, but only to the extent that any of the foregoing is not reimbursed
by Credit Parties; provided however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements to the extent
resulting from such Agent's gross negligence or willful misconduct as determined
by a final non-appealable order by a court of competent jurisdiction. 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 even if
so directed by the Requisite Lenders or such other portion of the Lenders as
shall be prescribed by this Agreement until such additional indemnity is
furnished. The obligations of Lenders under this Section 8.2(e) shall survive
the payment in full of the Obligations and the termination of this Agreement.
(f) GE Capital, Nordea and GE ELF Individually. With respect to its
Commitments hereunder, each of GE Capital, Nordea and GE ELF shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders," "Requisite Lenders," or any similar terms shall,
unless the context clearly otherwise indicates, include each of GE Capital,
Nordea and GE ELF (to the extent applicable) in its individual capacity as a
Lender or one of the Requisite Lenders. Each of GE Capital, Nordea and GE ELF,
either directly or through strategic affiliations, may lend money to, acquire
equity or other ownership interests in, provide advisory services to and
generally engage in any kind of banking, trust or other business with any Credit
Party as if it were not acting as an Agent pursuant hereto and without any duty
to account therefor to Lenders. Each of GE Capital, Nordea and GE ELF, either
directly or through strategic affiliations, may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital,
Nordea and GE ELF (to the extent applicable) as Lenders holding disproportionate
interests in the Loans and each of GE Capital, Nordea and GE ELF as Agents.
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(g) Successor Agent.
(i) Resignation. Any Agent may resign from the performance of
all its agency functions and duties hereunder at any time by giving at least
thirty (30) Business Days' prior written notice to Borrower Representatives and
Lenders. Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clause (ii) below or as otherwise provided in
clause (ii) below. Syndication Agent may resign at any time upon notice to
Administrative Agent.
(ii) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (i) above, Requisite Lenders shall appoint a
successor Agent which, unless an Event of Default has occurred and is
continuing, shall be reasonably acceptable to Borrowers; provided that the
consent of the Administrative Agent shall also be required to appoint a
successor European Loan Agent, successor European Funding Agent or successor
European Security Agent. No successor to Syndication Agent shall be appointed.
If a successor Agent shall not have been so appointed within the thirty (30)
Business Day period referred to in clause (i) above, the retiring Agent, upon
notice to Borrower Representatives, shall then appoint a successor Agent who
shall serve as Agent until such time, if any, as Requisite Lenders appoint a
successor Agent as provided above.
(iii) Successor Agent. Upon the acceptance of any appointment as
an Agent under the Loan Documents by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Loan Documents. After any
retiring Agent's resignation as an Agent, the provisions of this Section 8.2)
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it in its capacity as an Agent.
(h) Collateral Matters.
(i) Release of Collateral. Lenders hereby irrevocably authorize
each Authorized Agent to release any Lien granted to or held by such Agent upon
any Collateral (x) upon the occurrence of the Termination Date or (y)
constituting property being sold or disposed of if Borrowers (or any of them)
certify to such Agent that the sale or disposition is made in compliance with
the provisions of this Agreement (and such Agent may rely in good faith
conclusively on any such certificate, without further inquiry).
(ii) Confirmation of Authority: Execution of Releases. Without
in any manner limiting any Agent's authority to act without any specific or
further authorization or consent by Lenders (as set forth in Section 8.2(h)(i)),
each Lender agrees to confirm in writing, upon request by any Authorized Agent
or any Borrower Representative, the authority to release any Collateral
conferred upon such Agent under clauses (x) and (y) of Section 8.2(h)(i). Upon
receipt by any Authorized Agent of any required confirmation from the Requisite
Lenders of its authority to release any particular item or types of Collateral,
and upon at least ten (10) Business Days' prior written request by Appropriate
Borrower Representative, such Agent shall (and is hereby irrevocably authorized
by Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to such Agent upon such Collateral; provided,
however,
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that (x) such Agent shall not be required to execute any such document on terms
which, in such Agent's opinion, would expose such Agent to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (y) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
any Credit Party, in respect of), all interests retained by any Credit Party,
including the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
(iii) Absence of Duty. No Agent shall have any obligation
whatsoever to any Lender or any other Person to assure that the property covered
by the Collateral Documents exists or is owned by Borrowers or any other Credit
Party or is cared for, protected or insured or has been encumbered or that the
Liens granted to any Authorized Agent have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to such Agent in this
Section 8.2(h) or in any of the Loan Documents, it being understood and agreed
that in respect of the property covered by the Collateral Documents or any act,
omission or event related thereto, such Agent may act in any manner it may deem
appropriate, in its discretion, given such Agent's own interest in property
covered by the Collateral Documents as one of the Lenders and that such Agent
shall have no duty or liability whatsoever to any of the other Lenders; provided
that such Agent shall exercise the same care which it would in dealing with
loans for its own account.
(i) Agency for Perfection. Each Agent and each Lender hereby appoint
each other Lender as agent for the purpose of perfecting such Agent's security
interest in assets which, in accordance with the Code in any applicable
jurisdiction, can be perfected by possession or control. Should any Lender
(other than Administrative Agent, European Security Agent, European Funding
Agent or European Loan Agent) obtain possession or control of any such assets,
such Lender shall notify Appropriate Agent thereof, and, promptly upon such
Agent's request therefor, shall deliver such assets to such Agent or in
accordance with such Agent's instructions or transfer control to such Agent in
accordance with such Agent's instructions. Each Lender agrees that it will not
have any right individually to enforce or seek to enforce any Collateral
Document or to realize upon any collateral security for the Loans unless
instructed to do so by Administrative Agent in writing (or with respect to the
European Revolving Loan and the European Term Loan A, Administrative Agent and
European Loan Agent), it being understood and agreed that such rights and
remedies may be exercised only by Administrative Agent or European Loan Agent
(which shall include any such exercise by Agents at the request of Requisite
Lenders pursuant to Section 6.3).
(j) Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default except with respect
to defaults in the payment of principal, interest and Fees required to be paid
to such Agent for the account of Lenders, unless such Agent shall have received
written notice from a Lender or any Borrower Representative referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". Each Agent will use reasonable efforts to
notify each Lender of its receipt of any such notice, unless such notice is with
respect to defaults in the payment of principal, interest and fees, in which
case such Agent will notify each Lender of its receipt of such notice.
Administrative Agent shall take such action with respect to such Default
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or Event of Default as may be requested by Requisite Lenders in accordance with
Section 6. Unless and until Administrative Agent has received any such request,
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interests of Lenders.
(k) Lender Actions Against Collateral. Each Lender agrees that it
will not take any action, nor institute any actions or proceedings, with respect
to the Loans, against any Borrower or any Credit Party hereunder or under the
other Loan Documents or against any of the Real Estate encumbered by Mortgages
without the consent of the Requisite Lenders. With respect to any action by
Administrative Agent, European Security Agent, European Funding Agent or
European Loan Agent at the direction of Administrative Agent, to enforce the
rights and remedies of Agents and the Lenders under this Agreement and the other
Loan Documents, each Lender hereby consents to the jurisdiction of the court in
which such action is maintained, and agrees to deliver its Notes to
Administrative Agent to the extent necessary to enforce the rights and remedies
of Administrative Agent for the benefit of the Lenders under the Mortgages in
accordance with the provisions hereof.
(l) The Syndication Agent shall not have any duties or
responsibilities, and shall incur no liability under this Agreement and the
other Loan Documents. Each Lender expressly acknowledges that neither
Syndication Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by Syndication Agent hereafter taken, including any review of
the affairs of a Credit Party or any affiliate of a Credit Party, shall be
deemed to constitute any representation or warranty by Syndication Agent to any
Lender. Each Lender represents to the Syndication Agent that it has,
independently and without reliance upon Syndication Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Credit Parties and
their affiliates and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon Syndication Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Syndication Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Credit Party or any affiliate
of a Credit Party that may come into the possession of Syndication Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.3 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender is hereby
authorized by Borrowers at any time or from time to time, with reasonably prompt
subsequent notice to Appropriate Borrower Representative (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (A) balances held by such Lender at any of
its offices
83
for the account of any Borrower or any of its Subsidiaries (regardless of
whether such balances are then due to any Borrower or its Subsidiaries), and (B)
other property at any time held or owing by such Lender to or for the credit or
for the account of any Borrower or any of its Subsidiaries, against and on
account of any of the Obligations; except that no Lender shall exercise any such
right without the prior written consent of Administrative Agent (or with respect
to European Borrowers, Administrative Agent and European Loan Agent). Any Lender
exercising a right to set off shall purchase for cash (and the other Lenders
shall sell) interests in each of such other Lender's Pro Rata Share of the
Obligations as would be necessary to cause all Lenders to share the amount so
set off with each other Lender in accordance with their respective Pro Rata
Shares. Borrowers agree, to the fullest extent permitted by law, that any Lender
may exercise its right to set off with respect to amounts in excess of its Pro
Rata Share of the Obligations and upon doing so shall deliver such amount so set
off to the Appropriate Agent for the benefit of all Lenders in accordance with
their Pro Rata Shares. To the extent permitted under applicable law, any Lender
which receives a payment through the exercise of rights under this Section 8.3
shall use reasonable efforts to forward such payment to Appropriate Agent for
distribution to Lenders in accordance with the provisions hereof.
8.4 Disbursement of Funds. Appropriate Agent may, on behalf of Lenders,
disburse funds to Borrowers for Loans requested. Each Lender shall reimburse
Appropriate Agent on demand for all funds disbursed on its behalf by such Agent,
or if such Agent so requests, each Lender will remit to such Agent its Pro Rata
Share of any Loan before such Agent disburses same to Borrowers. If either
Appropriate Agent elects to require that each Lender make funds available to
such Agent prior to a disbursement by such Agent to Borrowers, such Agent shall
advise each Lender by telephone or fax of the amount of such Lender's Pro Rata
Share of the Loan requested by Appropriate Borrower Representative (i) with
respect to any Index Rate Loan, no later than 1:00 p.m. (Local Time) on the
Funding Date applicable thereto, and (ii) with respect to any IBOR Loan, no
later than 2:00 p.m. (Local Time) on the third Business Day prior to the Funding
Date applicable thereto. Each Lender shall pay such Agent such Lender's Pro Rata
Share of such requested Loan, in same day funds, by wire transfer to such
Agent's account on such Funding Date. If any Lender fails to pay the amount of
its Pro Rata Share within one (1) Business Day after such Agent's demand, such
Agent shall promptly notify' Appropriate Borrower Representative, and the
applicable Borrowers shall immediately repay such amount to such Agent. Any
repayment required pursuant to this Section 8.4 shall be without premium or
penalty. Nothing in this Section 8.4 or elsewhere in this Agreement or the other
Loan Documents, including the provisions of Section 8.5 shall be deemed to
require either Appropriate Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its commitments hereunder or
to prejudice any rights that such Agent or Borrowers may have against any Lender
as a result of any default by such Lender hereunder.
8.5 Disbursements of Advances; Payment.
(a) Advances; Payments.
(i) US Revolving Lenders shall refund or participate in the
Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(d). If
the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Administrative Agent shall notify US Revolving Lenders,
promptly after receipt of a Notice of US Revolving Credit
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Advance and in any event prior to 1:00 p.m. (New York time) on the date such
Notice of a US Revolving Credit Advance is received, by fax, telephone or other
similar form of transmission. European Loan Agent shall notify European
Revolving Lenders promptly after receipt of a Notice of European Revolving
Credit Advance and in any event prior to 1:00 p.m. (London time) on the date
such Notice of European Revolving Credit Advance is received, by fax, telephone
or similar form of transmission. Each Revolving Lender shall make the amount of
such Lender's Pro Rata Share of any Revolving Credit Advance available to
Appropriate Agent in same day funds in Dollars, or the Equivalent Amount in the
requested Alternative Currency, as applicable, by wire transfer to Appropriate
Agent's account as set forth in Section 1.1(h) not later than 11:00 a.m. (Local
Time) on the requested Funding Date. After receipt of such wire transfers (or,
in Appropriate Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof, Appropriate Agent shall make the requested
Revolving Credit Advance to Borrowers as designated by Appropriate Borrower
Representative in the Notice of US Revolving Credit Advance or Notice of
European Revolving Credit Advance, as applicable. All payments by each Revolving
Lender shall be made without setoff, counterclaim or deduction of any kind.
(ii) No later than the second Business Day after receipt of
principal, interest and Fees (each, a "Settlement Date"), the Appropriate Agent
shall advise each Lender by telephone or fax of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of Lender with
respect to the applicable Loans. Provided that each Lender has funded all
payments and Revolving Credit Advances (if applicable) required to be made by it
and purchased all participations required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date, the
Appropriate Agent shall pay or cause to be paid to each Lender such Lender's Pro
Rata Share of principal, interest and Fees paid since the previous Settlement
Date for the benefit of such Lender on the Loans held by it. Such payments shall
be made by wire transfer to such Lender's account (as specified by such Lender
in Annex E, the signature pages hereof, or the applicable Assignment Agreement)
not later than 2:00 p.m. (Local time) on the next Business Day following each
Settlement Date. To the extent that any Revolving Lender (a "Non Funding
Lender") has failed to fund all such payments and Revolving Credit Advances or
failed to fund the purchase of all such participations, the Appropriate Agent
shall be entitled to set off the funding shortfall against that Non Funding
Lender's Pro Rata Share of all payments otherwise payable to that Non Funding
Lender.
(b) Availability of Lender's Pro Rata Share. Appropriate Agent may
assume that each Revolving Lender will make its Pro Rata Share of each Revolving
Credit Advance available to Appropriate Agent on each Funding Date. If such Pro
Rata Share is not, in fact, paid to Appropriate Agent by such Revolving Lender
when due, Appropriate Agent will be entitled to recover such amount on demand
from such Revolving Lender without setoff, counterclaim or deduction of any
kind. If any Revolving Lender fails to pay the amount of its Pro Rata Share
forthwith upon Appropriate Agent's demand, Appropriate Agent shall promptly
notify Appropriate Borrower Representative and Borrowers shall immediately repay
such amount to Appropriate Agent. Nothing in this Section 8.5(b) or elsewhere in
this Agreement or the other Loan Documents shall be deemed to require either
Appropriate Agent to advance funds on behalf of any Revolving Lender or to
relieve any Revolving Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Borrowers may have against any
Revolving Lender as a result of any default by such Revolving Lender hereunder.
To the extent that either Appropriate Agent advances funds to Borrowers on
behalf of any Revolving Lender
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and is not reimbursed therefor on the same Business Day as such Advance is made,
such Agent shall be entitled to retain for its account all interest accrued on
such Advance until reimbursed by the applicable Revolving Lender.
(c) Return of Payments.
(i) If either Appropriate Agent pays an amount to a Lender
under this Agreement in the belief or expectation that a related payment has
been or will be received by such Agent from Borrowers and such related payment
is not received by such Agent, then such Agent will be entitled to recover such
amount from such Lender on demand without setoff, counterclaim or deduction of
any kind.
(ii) If either Appropriate Agent determines at any time that any
amount received by such Agent under this Agreement must be returned to any
Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Loan Document, such Agent will not be required to distribute any
portion thereof to any Lender. In addition, each Lender will repay to such Agent
on demand any portion of such amount that such Agent has distributed to such
Lender, together with interest at such rate, if any, as such Agent is required
to pay to any Borrower or such other Person, without setoff, counterclaim or
deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder, or to
purchase any participation in any Swing Line Loan to be made or purchased by it
on the date specified therefor shall not relieve any other Lender (each such
other Revolving Lender, an "Other Lender") of its obligations to make such
Advance, make any other payment or purchase such participation on such date, but
neither any Other Lender nor any Agent shall be responsible for the failure of
any Non-Funding Lender to make an Advance, make any other payment or purchase a
participation or make any other payment required hereunder. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have
any voting or consent rights under or with respect to any Loan Document or
constitute a "Lender" a "US Lender", a "European Lender", a US Revolving
Lender", a "European Revolving Lender", a "US Term Lender" or a "European Term A
Lender" (or be included in the calculation of "Requisite Lenders" hereunder) for
any voting or consent rights under or with respect to any Loan Document.
(e) Dissemination of Information. Each Authorized Agent shall use
reasonable efforts to provide Lenders and the other Agents with any notice of
Default or Event of Default received by such Agent from, or delivered by such
Agent to, any Credit Party, with notice of any Event of Default of which such
Agent has actually become aware and with notice of any action taken by such
Agent following any Event of Default, unless such notice is with respect to
defaults in the payment of principal, interest and fees, in which case such
Agent will notify each Lender of its receipt of such notice; provided that, in
each case, such Agent shall not be liable to any Lender or the other Agent for
any failure to do so.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender and European Loan Agent hereby agrees with each
other Lender and Agent that no Lender nor European Loan Agent shall take any
action to protect or enforce its
86
rights arising out of this Agreement or the Notes (including exercising any
rights of setoff) without first obtaining the prior written consent of
Administrative Agent and Requisite Lenders, it being the intent of Lenders that
any such action to protect or enforce rights under this Agreement and the Notes
shall be taken in concert and at the direction or with the consent of
Administrative Agent or Requisite Lenders, except as specifically provided
herein with respect to actions by European Loan Agent. Administrative Agent is
authorized to issue all notices to be issued by or on behalf of the Lenders with
respect to any Subordinated Debt.
8.6 Swiss and German Power of Attorney. Each European Lender hereby
authorizes and empowers the European Security Agent with the right of delegation
and substitution and under relief from any restrictions (including but not
limited to restrictions of Section 181 German Civil Code) to execute on its sole
signature on behalf of such European Lender any and all agreements, sub
powers-of-attorney to third persons or other instruments and take such actions,
make all statements and accept all declarations deemed necessary or useful in
order to effect any Collateral on behalf of such European Lender.
SECTION 9.
MISCELLANEOUS
-------------
9.1 Indemnities. Credit Parties agree, jointly and severally, to
indemnify, pay, and hold each Agent, each Lender, each L/C Issuer and their
respective officers, directors, employees, agents, trustees and attorneys (the
"Indemnitees") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs and
expenses (including all reasonable fees and expenses of counsel to such
Indemnitees) of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Indemnitees as a result of such Indemnitees' being a
party to this Agreement or the transactions consummated pursuant to this
Agreement or otherwise relating to any of the Related Transactions (including
any IBOR Breakage Fee or any other loss sustained in converting between any
Alternative Currency and Dollars); provided, that Credit Parties shall have no
obligation to an Indemnitee hereunder with respect to liabilities to the extent
resulting from the gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Credit Parties
agree to make the maximum contribution to the payment and satisfaction thereof
which is permissible under applicable law.
9.2 Amendments and Waivers.
(a) Except for actions expressly permitted in this Agreement or the
other Loan Documents to be taken by Administrative Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or any consent to any departure by any Credit Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Administrative Agent, Borrowers, and by Requisite Lenders or all
affected Lenders, as applicable (or with respect to Collateral Documents
executed by any European Credit Party, by European Loan Agent or European
Security Agent, as applicable, with the consent of Administrative Agent). Except
as set forth in clause (b) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.
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(b) No amendment, modification, termination or waiver shall, unless
in writing and signed by Administrative Agent and each Lender directly and
adversely affected thereby: (i) increase the principal amount of any Lender's
Commitment (which action shall be deemed only to affect those Lenders whose
Commitments are increased and may be approved by Requisite Lenders, including
those Lenders whose Commitments are increased); (ii) reduce the principal of,
rate of interest on (other than any determination or waiver to charge or not
charge interest at the Default Rate) or Fees payable with respect to any Loan or
Letter of Credit Obligations of any affected Lender; (iii) extend any scheduled
payment date or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend or postpone any payment of
interest or Fees as to any affected Lender (which action shall be deemed only to
affect those Lenders to whom such payments are made); (v) except as otherwise
permitted in Section 3.7, release substantially any Guarantor or release
substantially all of the Collateral (which action shall be deemed to directly
affect all Lenders); (vi) amend or change Section 6.5(b); (vii) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans that shall be required for Lenders or any of them to take any action
hereunder; and (viii) amend or waive this Section 9.2 or the definitions of the
terms "Requisite Lenders" insofar as such definition affects the substance of
this Section 9.2. Furthermore, no amendment, modification, termination or waiver
affecting the rights or duties of any Agent or L/C Issuers under this Agreement
or any other Loan Document shall be effective unless in writing and signed by
such Agent or L/C Issuers, as the case may be, in addition to Lenders required
hereinabove to take such action. Notwithstanding clause (i) above, the
Commitments may be increased to provide for the Additional Senior Debt hereunder
subject to the provisions of Section 3.1(n) hereof, and this Agreement may be
amended in accordance therewith with the consent only of Administrative Agent
and those Lenders, if any, whose Commitments are increased. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for any Authorized Agent
to take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No-notice
to or demand on any Credit Party in any case shall entitle such Credit Party or
any other 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 9.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
9.3 Notices. Any notice or other communication required shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by fax, on the date of transmission if transmitted
on a Business Day before 4:00 p.m. Local Time; (c) if delivered by overnight
courier, one (1) Business Day after delivery to the courier properly addressed;
or (d) if delivered by U.S. mail, three (3) Business Days after deposit with
postage prepaid and properly addressed.
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Notices shall be addressed as follows:
If to any Credit Party: c/o Tempur-Pedic, Inc.
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx and Xxxx Xxxxxxxx
Telecopier No.: 000-000-0000
Telephone No. : 000-000-0000
With a copy to: Xxxxxxx XxXxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxxxxx X. Xxxxxxxxxxxx, Esq.
Fax: (000) 000-0000
TA Associates, Inc.
High Street Tower
125 High Street, Suite 2500
Xxxxxx, Xxxxxxxxxxxxx 00000
ATTN: X. Xxxxxxx XxXxxx
Fax: (000) 000-0000
Xxxxxxxx Xxxxxxxxx & Xxxx, LLC
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
ATTN: Xxxxxxxxxxx X. Xxxxx
Fax: (000)000-0000
If to Administrative Agent GENERAL ELECTRIC CORPORATION
or GE Capital: 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Tempur World Account Manager
Fax: (000) 000-0000
With a copy to: GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
ATTN: Corporate Counsel
Commercial Finance - Merchant Banking
Fax: (000)0000000
and
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GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Corporate Counsel
Commercial Finance - Merchant Banking
Fax: (000) 000 0000
If to European Loan Agent GE European Leveraged Finance Limited
or GE ELF: 0/xx/ Xxxxx, 0-00 Xxxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attention: Tempur World Account Manager
Telecopier No.: x00 (0) 00 0000 00 00
Telephone No. : x00 (0) 00 0000 00 00
If to European Funding Agent HSBC Bank Plc
or HSBC: Xxxxx 00
0 Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Xxxxxxx
Attention: Xxxxxx Xxxxx
Debt Finance Support and
Agency Services
Telecopier No.: 44 020 7991 4348
Telephone No. : 00 000 0000 0000
If to European Security Agent Nordea Bank Danmark A/S
or Nordea: X.X. Xxx 000
XX-0000 Xxxxxxxxxx C
Attention: 6929 International Loan
Administration - Xxxx Xxxxxxxxx
Telecopier No.: x00 0000 0000
Telephone No. : x00 0000 0000
If to a Lender: To the address set forth on the signature
page hereto or in the applicable Assignment
Agreement
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of any Agent or any Lender to exercise, nor any partial
exercise of, any power, right or privilege hereunder or under any other Loan
Documents shall impair such power, right, or privilege or be construed to be a
waiver of any Default or Event of Default. All rights and remedies existing
hereunder or under any other Loan Document are cumulative to and not exclusive
of any rights or remedies otherwise available.
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9.5 Marshaling; Payments Set Aside. No Agent nor any Lender shall be
under any obligation to marshal any assets in payment of any or all of the
Obligations. To the extent that Borrowers make payment(s) or any Agent enforces
its Liens or any Agent or any Lender exercises its right of set-off, and such
payment(s) or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set off had not occurred.
9.6 Severability. The invalidity, illegality, or unenforceability in any
jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.
9.7 Lenders' Obligations Several; Independent Nature of Lenders' Rights.
The obligation of each Lender hereunder is several and not joint and no Lender
shall be responsible for the obligation or commitment of any other Lender
hereunder. In the event that any Lender at any time should fail to make a Loan
as herein provided, the Lenders, or any of them, at their sole option, may make
the Loan that was to have been made by the Lender so failing to make such Loan.
Nothing contained in any Loan Document and no action taken by any Agent or any
Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be 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.
9.8 Headings. Section and subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.
9.9 Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
9.10 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns except that Borrowers may not assign their rights or obligations
hereunder without the written consent of all Lenders; provided that any
assignment by a Lender shall be made in accordance with Section 8.1 hereof.
9.11 No Fiduciary Relationship Limited Liability. No provision in the Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty owing to Borrowers by any Agent or any Lender. Borrowers
agree that no Agent nor any Lender shall have liability to Borrowers (whether
sounding in tort, contract or otherwise) for losses suffered by Borrowers in
connection with, arising out of, or in any way related to the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless and to the extent
that it is determined that such losses resulted from the gross negligence or
willful misconduct of the party from which
91
recovery is sought as determined by a final non-appealable order by a court of
competent jurisdiction. No Agent nor any Lender shall have any liability with
respect to, and Borrowers hereby waive, release and agree not to xxx for, any
special, indirect or consequential damages suffered by Borrowers in connection
with, arising out of, or in any way related to the Loan Documents or the
transactions contemplated thereby.
9.12 Construction. Each Agent, each Lender, Borrowers and each other
Credit Party acknowledge that each of them has had the benefit of legal counsel
of its own choice and has been afforded an opportunity to review the Loan
Documents with its legal counsel and that the Loan Documents shall be construed
as if jointly drafted by each Agent, each Lender, Borrowers and each other
Credit Party.
9.13 Confidentiality. Each Agent and each Lender agree to exercise its
best efforts to keep confidential any non-public information delivered pursuant
to the Loan Documents and identified as such by Borrowers and not to disclose
such information to Persons other than to potential assignees or participants or
to Persons employed by or engaged by an Agent, a Lender or a Lender's assignees
or participants that has agreed to comply with the covenant contained in this
Section 9.13 including attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management services. The
confidentiality provisions contained in this Section 9.13 shall not apply to
disclosures (i) required to be made by any Agent or any Lender to any regulatory
or governmental agency or pursuant to legal process or (ii) consisting of
general portfolio information that does not identify Borrowers. The obligations
of Agents and Lenders under this Section 9.13 shall supersede and replace the
obligations of Agents and Lenders under any confidentiality agreement in respect
of this financing executed and delivered by any Agent or any Lender prior to the
date hereof. Each Agent agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure, including any
prospectus, proxy statement or other materials filed with any Governmental
Authority relating to a public offering of the Stock of any Agent, using the
name of any Credit Party or their affiliates without at least two (2) Business
Days' prior notice to US Borrower Representative, and without the prior written
consent of US Borrower Representative, not to be unreasonably withheld, unless
(and only to the extent that) such Agent or Affiliate is required to do so under
law and then, in any event, such Agent or Affiliate will consult with US
Borrower Representative before issuing such press release or other public
disclosure. Notwithstanding anything to the contrary set forth herein or in any
other agreement to which the parties or by which they are bound, the obligations
of confidentiality contained herein and therein, as they relate to the
transactions contemplated by this Agreement and the other Loan Documents, shall
not apply to the federal tax structure or federal tax treatment of such
transactions, and each party hereto (and any employee, representative, agent of
any party hereto) may disclose to any and all persons, without limitation of any
kind the federal tax structure and federal tax treatment of such transactions.
The preceding sentence is intended to cause the transactions to be treated as
not having been offered under conditions of confidentiality for purposes of
Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended,
and shall be construed in a manner consistent with such purpose. In addition,
each party hereto acknowledges that it has no proprietary or exclusive rights to
the federal tax structure of such transactions, or any federal tax matter or
federal tax idea related to such transactions.
92
9.14 CONSENT TO JURISDICTION. BORROWERS AND CREDIT PARTIES HEREBY CONSENT
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK
COUNTY, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO ADMINISTRATIVE
AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE NOTES SHALL BE LITIGATED IN SUCH COURTS. BORROWERS AND CREDIT
PARTIES EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS
AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. BORROWERS AND CREDIT PARTIES
HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE UPON BORROWERS AND CREDIT PARTIES BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO APPROPRIATE BORROWER
REPRESENTATIVE, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY
LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF BORROWERS, CREDIT PARTIES OR ANY OF THEIR AFFILIATES
SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF BORROWERS OR SUCH CREDIT
PARTIES FOR PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE
PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT
TRIAL OR OTHERWISE). BORROWERS AND CREDIT PARTIES AGREE THAT ANY AGENT'S OR ANY
LENDER'S COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF
THESE INDIVIDUALS AS IF UNDER CROSS- EXAMINATION AND THAT ANY DISCOVERY
DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN
EVIDENCE DEPOSITION. BORROWERS AND CREDIT PARTIES IN ANY EVENT WILL USE ALL
COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION
PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY ANY AGENT OR ANY LENDER,
ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER
THINGS UNDER THEIR CONTROL AND RELATING TO THE DISPUTE. TO THE EXTENT THAT ANY
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY (SOVEREIGN OR OTHERWISE) FROM
ANY LEGAL ACTION, SUIT OR PROCEEDING FROM JURISDICTION OF ANY COURT OR FROM
SET-OFF OR ANY LEGAL PROCESS (WHETHER SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OR EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR
OTHERWISE) WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, SUCH BORROWER HEREBY
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY NOTE.
9.15 WAIVER OF JURY TRIAL. BORROWERS, CREDIT PARTIES, EACH AGENT AND EACH
LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BORROWERS CREDIT PARTIES, EACH AGENT AND EACH LENDER ACKNOWLEDGE THAT
THIS WAIVER
93
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWERS, CREDIT PARTIES, EACH AGENT AND EACH LENDER WARRANT
AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER
WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS.
9.16 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, issuances of Letters of
Credit and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Borrowers
set forth in Sections 1.3(e), 1.8, 1.9 and 9.1 shall survive the repayment of
the Obligations and the termination of this Agreement.
9.17 Entire Agreement. This Agreement, the Notes and the other Loan
Documents embody the entire agreement among the parties hereto and supersede all
prior commitments, agreements, representations, and understandings, whether oral
or written, relating to the subject matter hereof, and may not be contradicted
or varied by evidence of prior, contemporaneous, or subsequent oral agreements
or discussions of the parties hereto. All Exhibits, Schedules and Annexes
referred to herein are incorporated in this Agreement by reference and
constitute a part of this Agreement.
9.18 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one in the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
9.19 Replacement of Lenders.
(a) Within twenty (20) days after receipt by Appropriate Borrower
Representative of written notice and demand from any Lender for payment pursuant
to Section 1.8 or 1.9 or, as provided in this Section 9.19, in the case of
certain refusals by any Lender to consent to certain proposed amendments,
modifications, terminations or waivers with respect to this Agreement that have
been approved by Requisite Lenders or all affected Lenders, as applicable (any
such Lender demanding such payment or refusing to so consent being referred to
herein as an "Affected Lender"), Borrowers may, at their option, notify each
Agent and such Affected Lender of its intention to do one of the following:
(i) Borrowers may obtain, at Borrowers' expense, a replacement
Lender ("Replacement Lender") for such Affected Lender, which Replacement Lender
shall be reasonably satisfactory (notice of such satisfaction not to be
unreasonably withheld or delayed) to Administrative Agent (or with respect to
any European Lender, Administrative Agent and European Loan Agent). In the event
Borrowers obtain a Replacement Lender that will purchase
94
all outstanding Obligations owed to such Affected Lender and assume its
Commitments hereunder within thirty (30) days following notice of Borrowers'
intention to do so, the Affected Lender shall sell and assign all of its rights
and delegate all of its obligations under this Agreement to such Replacement
Lender in accordance with the provisions of Section 8.1; provided that Borrowers
have reimbursed such Affected Lender for any administrative fee payable pursuant
to Section 8.1 and, in any case where such replacement occurs as the result of a
demand for payment pursuant to Section 1.8 or 1.9, paid all amounts required to
be paid to such Affected Lender pursuant to Section 1.8 or 1.9 through the date
of such sale and assignment; or
(ii) Borrowers may, with Administrative Agent's consent, prepay
in full all outstanding Obligations owed to such Affected Lender and terminate
such Affected Lender's Pro Rata Share of the Revolving Loan Commitment and Pro
Rata Share of the Term Loan Commitment, in which case the Revolving Loan
Commitment and Term Loan Commitment will be reduced by the amount of such Pro
Rata Share. Borrowers shall, within ninety (90) days following notice of their
intention to do so, prepay in full all outstanding Obligations owed to such
Affected Lender (including, in any case where such prepayment occurs as the
result of a demand for payment for increased costs, such Affected Lender's
increased costs for which it is entitled to reimbursement under this Agreement
through the date of such prepayment), and terminate such Affected Lender's
obligations under the Revolving Loan Commitment and Term Loan Commitment.
(b) In the case of a Non-Funding Lender pursuant to Section 8.5(a),
at US Borrower Representative's request, Administrative Agent, in its sole
discretion, or a Person acceptable to Administrative Agent shall have the right
(but shall have no obligation) with the Administrative Agent's consent (which
consent shall not be unreasonably withheld in the case of a Qualified Assignee)
to purchase from any Non-Funding Lender, and each Non-Funding Lender agrees that
it shall, at Administrative Agent's request, sell and assign to Administrative
Agent or such Person, all of the Loans and Commitments of that Non-Funding
Lender for an amount equal to the principal balance of all Loans held by such
Non-Funding Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.
(c) If, in connection with any proposed amendment, modification,
waiver or termination pursuant to Section 9.2 (a "Proposed Change") requiring
the consent of all affected Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as described in this
Section 9.19(c) being referred to as a "Non-Consenting Lender"), then, so long
as Administrative Agent is not a Non-Consenting Lender, at US Borrower
Representative's request Administrative Agent in its sole discretion, or a
Person reasonably acceptable to Administrative Agent, shall have the right (but
shall have no obligation) with the Administrative Agent's consent (which consent
shall not be unreasonably withheld in the case of a Qualified Assignee) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Administrative Agent's request, sell and assign to
Administrative Agent or such Person, all of the Loans and Commitments of such
Non-Consenting Lenders for an amount equal to the principal balance of all Loans
held by the Non- Consenting Lenders and all accrued interest and Fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.
95
9.20 Delivery of Termination Statements and Mortgage Releases. On the
Termination Date, and so long as no suits, actions proceedings, or claims are
pending or, in the reasonable judgment of Administrative Agent, threatened
against any Indemnitee asserting any damages, losses or liabilities that are
indemnified liabilities hereunder, each Authorized Agent shall deliver to
Appropriate Borrower Representative termination statements, mortgage releases
and other documents necessary or appropriate to evidence the termination of the
Liens securing payment of the Obligations. Notwithstanding the foregoing, each
Authorized Agent agrees to deliver to Borrowers termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations notwithstanding
that a suit, action, proceeding or claim is pending or threatened against any
Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities; provided that the Borrowers provide a letter of credit,
surety bond or other collateral that is sufficient to secure such Indemnified
Liabilities, and which is satisfactory, including, but not limited to, in form
and amount, to the Administrative Agent in its reasonable discretion.
9.21 Judgment Currency.
(a) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under the Notes in any currency (the
"Original Currency") into another currency (the "Other Currency") the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the Original Currency with
the Other Currency at 11:00 A.M., Local Time, on the second Business Day
preceding that on which final judgment is given.
(b) The obligation of a Borrower in respect of any sum due in the
Original Currency from it to any Lender or any Agent hereunder or under the
Notes held by such Lender shall, notwithstanding any judgment in any Other
Currency, be discharged only to the extent that on the Business Day following
receipt by such Lender or such Agent (as the case may be) of any sum adjudged to
be so due in such Other Currency such Lender or such Agent (as the case may be)
may in accordance with normal banking procedures purchase the Original Currency
with such Other Currency; if the amount of the Original Currency so purchased is
less than the sum originally due to such Lender or such Agent (as the case may
be) in the Original Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or such Agent (as
the case may be) against such loss, and if the amount of the Original Currency
so purchased exceeds the sum originally due to any Lender or such Agent (as the
case may be) in the Original Currency, such Lender or such Agent (as the case
may be) agrees to remit to such Borrower such excess.
9.22 European Monetary Union. If any currency ceases to be the lawful
currency of the nation issuing the same and is replaced by the European Union
Euro, then any amount payable hereunder by any party hereto in such currency
shall instead be payable in the Euro and the amount so payable shall be
determined by translating the amount payable in such currency to the Euro at the
fixed conversion rate for such currency in Euros on the date of such event.
Prior to the occurrence of the foregoing event, each amount payable hereunder in
any currency will continue to be payable in only in that currency. Each Borrower
agrees, at the request of the Required Lenders, at the time of or any time
following such event, to enter into an agreement
96
amending this Agreement in such manner as the Required Lenders shall reasonably
request in order to avoid any unfair burden or disadvantage resulting from the
cessation of such currency as the lawful currency of the nation issuing the same
and to place the parties hereto in the position they would have been m had such
event not occurred, the intent being that neither party will be adversely
affected economically as a result of such event and that reasonable provisions
may be adopted to govern the Advances and, maintenance and repayment of Loans
denominated in any Alternative Currency after the occurrence of the event
described in the preceding sentence.
9.23 Subordination.
(a) Each Credit Party executing this Agreement covenants and agrees
that the payment of all indebtedness, principal, interest (including interest
which accrues after the commencement of any case or proceeding in bankruptcy, or
for the reorganization of any Credit Party), fees, charges, expenses, attorneys'
fees and any other sum, obligation or liability owing by any other Credit Party
to such Credit Party, including any intercompany trade payables or royalty or
licensing fees (collectively, the "Intercompany Obligations"), is subordinated,
to the extent and in the manner provided in this Section 9.23, to the prior
payment in full of all Obligations (herein, the "Senior Obligations") and that
the subordination is for the benefit of the Agents and Lenders, and
Administrative Agent may enforce such provisions directly.
(b) Each Credit Party executing this Agreement hereby (i) authorizes
Administrative Agent to demand specific performance of the terms of this Section
9.23 whether or not any other Credit Party shall have complied with any of the
provisions hereof applicable to it, at any time when such Credit Party shall
have failed to comply with any provisions of this Section 9.23 which are
applicable to it and (ii) irrevocably waives any defense based on the adequacy
of a remedy at law, which might be asserted as a bar to such remedy of specific
performance.
(c) Upon any distribution of assets of any Credit Party in any
dissolution, winding up, liquidation or reorganization (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):
(i) The Agents and Lenders shall first be entitled to receive
payment in full in cash of the Senior Obligations before any Credit Party is
entitled to receive any payment on account of the Intercompany Obligations.
(ii) Any payment or distribution of assets of any Credit Party
of any kind or character, whether in cash, property or securities, to which any
other Credit Party would be entitled except for the provisions of Section 9.23,
shall be paid by the liquidating trustee or agent or other Person making such
payment or distribution directly to the Administrative Agent, to the extent
necessary to make payment in full of all Senior Obligations remaining unpaid
after giving effect to any concurrent payment or distribution or provisions
therefor to the Agents and Lenders.
(iii) In the event that notwithstanding the foregoing provisions
of Section 9.23, any payment or distribution of assets of any Credit Party of
any kind or character, whether in cash, property or securities, shall be
received by any other Credit Party on account of
97
the Intercompany Obligations before all Senior Obligations are paid in full,
such payment or distribution shall be received and held in trust for and shall
be paid over to the Administrative Agent for application to the payment of the
Senior Obligations until all of the Senior Obligations shall have been paid in
full, after giving effect to any concurrent payment or distribution or provision
therefor to the Agents and Lenders.
(d) No right of the Agents and Lenders or any other present or future
holders of any Senior Obligations to enforce the subordination provisions herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of any Credit Party or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by any Credit Party with the
terms hereof, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with.
[Signature Page Follows]
98
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
TEMPUR-PEDIC, INC., as a Borrower
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
---------------------------------
Title: CFO
---------------------------------
TEMPUR PRODUCTION USA, INC.,
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: President
---------------------------------
TEMPUR WORLD HOLDING COMPANY ApS, as a
Borrower
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
XXX-FOAM ApS, as a Borrower
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
S-1
[Signature Page to Second Amended and Restated Credit Agreement]
Credit Parties:
TWI HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: President
---------------------------------
TEMPUR WORLD, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: President and CEO
---------------------------------
TEMPUR WORLD HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: President and CEO
---------------------------------
TEMPUR WORLD HOLDINGS, S.L.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: President
---------------------------------
TEMPUR-MEDICAL, INC.
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
---------------------------------
Title: President
---------------------------------
S-2
[Signature Page to Second Amended and Restated Credit Agreement]
TEMPUR-PEDIC, DIRECT RESPONSE, INC.
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
---------------------------------
Title: President
---------------------------------
TEMPUR WORLD HOLDING SWEDEN AB
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
---------------------------------
Title: Corporate Controller
---------------------------------
TEMPUR DANMARK A/S
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
TEMPUR UK, LTD.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
TEMPUR JAPAN YUGEN KAISHA
By: /s/ Xxxx Xxxxxx Siljedahl
---------------------------------
Name: Xxxx Xxxxxx Siljedahl
---------------------------------
Title: Country Manager
---------------------------------
S-3
[Signature Page to Second Amended and Restated Credit Agreement]
TEMPUR INTERNATIONAL LIMITED
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
TEMPUR SVERIGE AB
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
---------------------------------
Title: Corporate Controller
---------------------------------
TEMPUR NORGE AS
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
TEMPUR SUOMI OY
By: /s/ Arto Mannonen
---------------------------------
Name: Arto Mannonen
---------------------------------
Title: Country Manager
---------------------------------
TEMPUR SCHWEIZ AG
By: /s/ B. Lucy
---------------------------------
Name: B. Lucy
---------------------------------
Title: Managing Director
---------------------------------
S-4
[Signature Page to Second Amended and Restated Credit Agreement]
TEMPUR HOLDING GMBH
By: /s/ Xxxxxxx Krammenschneider
---------------------------------
Name: Xxxxxxx Krammenschneider
---------------------------------
Title: Managing Director
---------------------------------
TEMPUR DEUTSCHLAND GMBH
By: /s/ Xxxxxxx Krammenschneider
---------------------------------
Name: Xxxxxxx Krammenschneider
---------------------------------
Title: Managing Director
---------------------------------
TEMPUR PEDIC ESPANA SA
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
TEMPUR FRANCE SARL
By: /s/ M. Lawgaret
---------------------------------
Name: M. Lawgaret
---------------------------------
Title: Director of Operations
---------------------------------
TEMPUR SINGAPORE PTE LTD.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
S-5
[Signature Page to Second Amended and Restated Credit Agreement]
TEMPUR ITALIA SRL
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
TEMPUR BENELUX B.V.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
TEMPUR SOUTH AFRICA PTY. LTD.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title: Director
---------------------------------
XXXXX INNOVATION & DESIGN GMBH
By: /s/ Xxxxxxx Krammenschneider
---------------------------------
Name: Xxxxxxx Krammenschneider
---------------------------------
Title: Managing Director
---------------------------------
XXXXX POLSTERMOBEL SYSTEM GMBH
By: /s/ Xxxxxxx Krammenschneider
---------------------------------
Name: Xxxxxxx Krammenschneider
---------------------------------
Title: Managing Director
---------------------------------
S-6
[Signature Page to Second Amended and Restated Credit Agreement]
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, a US L/C Issuer
and a Lender
By: /s/ Xxxxxx Xxxxx
---------------------------------
S-7
[Signature Page to Second Amended and Restated Credit Agreement]
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent and a Lender
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Xxxxxxx Xxxxx
Vice President
S-8
[Signature Page to Second Amended and Restated Credit Agreement]
GE EUROPEAN LEVERAGED FINANCE LIMITED,
as European Loan Agent
By: /s/ Xxxxx Xxxxxx
---------------------------------
Director
S-9
[Signature Page to Second Amended and Restated Credit Agreement]
HSBC BANK PLC, as European Funding Agent
By: /s/ K. A. Raja
---------------------------------
Associate Director
S-10
[Signature Page to Second Amended and Restated Credit Agreement]
NORDEA BANK DANMARK A/S,
as a European Security Agent
and a Lender
By: /s/ Xxxx Xxxxxxxxxxxx
---------------------------------
Head of Corporate
/s/ Xxxx Xxxxxxxxx
---------------------------------
Head of AF
S-11
[Signature Page to Second Amended and Restated Credit Agreement]
ANTARES CAPITAL CORPORATION, as a Lender
By: /s/ Xxxxxx Xxxxx
---------------------------------
Director
S-12
[Signature Page to Second Amended and Restated Credit Agreement]
FIFTH THIRD BANK, KENTUCKY, INC.,
as a Lender
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxxx
Vice President
S-13
[Signature Page to Second Amended and Restated Credit Agreement]
GE LEVERAGED LOANS LIMITED, as a Lender
By: /s/ Xxxxx Xxxxxx
---------------------------------
Director
S-14
[Signature Page to Second Amended and Restated Credit Agreement]
