Amendment To Credit Agreement

Amendment No. 2 to Credit Agreement


Exhibit 10.1

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

THIS AMENDMENT NO. 2 TO CREDIT AND GUARANTY AGREEMENT (this “Amendment”), dated as of April 16, 2010, is made and entered into among DOUGLAS DYNAMICS, L.L.C., a Delaware limited liability company (the “Borrower”), and each of the Lenders (as hereinafter defined) party hereto.

 

RECITALS

 

A.            The Borrower and the Lenders party hereto are parties to that certain Credit and Guaranty Agreement dated as of May 21, 2007 (as amended by Amendment No. 1 to Credit and Guaranty Agreement, dated as of December 19, 2008 among the Borrower and each of the Lenders party thereto, the “Credit Agreement”) among the Borrower, Credit Suisse AG, Cayman Islands Branch, as Administrative Agent (in such capacity, the “Administrative Agent”) on behalf of the Lenders, each lender from time to time party thereto (the “Lenders”) and each of the other banks, financial institutions and other entities from time to time party thereto.

 

B.            The Borrower has requested that the Lenders agree, subject to the conditions and on the terms set forth in this Amendment, to amend certain provisions of the Credit Agreement as set forth herein.

 

C.            The Lenders are willing to amend the Credit Agreement, subject to the conditions and on the terms set forth below.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and each of the Lenders party hereto agree as follows:

 

1.             Definitions.           Except as otherwise expressly provided herein, capitalized terms used in this Amendment shall have the meanings given in the Amended Credit Agreement (as defined below), and the rules of interpretation set forth in the Amended Credit Agreement shall apply to this Amendment.  In addition:

 



 

Qualifying IPO” means the consummation of the first underwritten public offering of the Capital Stock (other than Disqualified Capital Stock) of Holdings following the Closing Date pursuant to a registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act.

 

Qualifying IPO Payment” means, concurrent with the closing of a Qualifying IPO, the one-time payment to Sponsor in connection with the termination of the Management Services Agreement in an aggregate amount not to exceed $6,000,000.

 

Qualifying Preferred Stock Redemption” means, concurrent with the closing of a Qualifying IPO, the payment of $1,000 to Aurora Equity Partners II L.P. and $1,000 to Ares Limited Partnership in respect of the redemption of the one share of Series B Preferred Stock and Series C Preferred Stock held by Aurora Equity Partners II L.P. and the Ares Limited Partnership, respectively.

 

Qualifying Senior Notes Redemption” means, concurrent with the closing of a Qualifying IPO, the Borrower and DD Finance (i) have given irrevocable and unconditional notice of redemption for all of the outstanding Senior Notes, (ii) have timely and irrevocably deposited or caused to be deposited with the trustee under the Senior Notes Indenture proceeds of a Qualifying IPO, proceeds of Additional Term Loans, Cash and/or Proceeds of Revolving Loans (as defined in the Revolving Credit Facility) sufficient to pay and discharge the entire indebtedness (including all principal, premium, if any, and accrued interest) on all outstanding Senior Notes and (iii) have satisfied all other conditions precedent to the discharge of the Senior Notes Indenture set forth in Section 8.8 of the Senior Notes Indenture.

 

2.             Consent and Agreement.  Notwithstanding anything to the contrary in the Credit Documents, the Lenders hereby consent to (i) the redemption of the Senior Notes by the Borrower pursuant to a Qualifying Senior Notes Redemption, (ii) the payment of the Qualifying IPO Payment and (iii) the redemption by Holdings of all preferred stock of Holdings pursuant to a Qualifying Preferred Stock Redemption.  The Borrower hereby agrees to consummate a Qualifying Senior Notes Redemption concurrently with the consummation of a Qualifying IPO.

 

3.             Amendment.  Concurrently with the consummation of a Qualifying IPO, the terms and provisions of the Credit Agreement are hereby amended by replacing such terms and provisions in their entirety with the terms and provisions set forth in the Credit Agreement attached hereto as Exhibit A (the “Amended Credit Agreement”).

 

4.             Representations and Warranties.  To induce the Lenders to agree to this Amendment, the Borrower represents to the Administrative Agent and the Lenders that as of the date hereof:

 

(a)           the Borrower has all power and authority to enter into this Amendment and to carry out the transactions contemplated by, and to perform its obligations under or in respect of, this Amendment;

 

(b)           the execution and delivery of this Amendment and the performance of the obligations of the Borrower hereunder have been duly authorized by all necessary action on the part of the Borrower;

 

(c)           the execution and delivery of this Amendment by the Borrower, and the performance of the obligations of the Borrower hereunder do not and will not conflict with or violate (i) any provision of the articles of incorporation or bylaws (or similar constituent documents) of the Borrower, (ii) any applicable provision of any material law, statute, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority or (iii) any indenture, agreement or instrument to which the Borrower is a party or by which the Borrower or any property of the Borrower, is bound, and do not and will not require any consent or approval of any Person that has not been obtained;

 

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(d)           this Amendment has been duly executed and delivered by the Borrower and the Credit Agreement and the other Credit Documents, as modified by this Amendment, are the legal, valid and binding obligations of the Borrower, enforceable in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law);

 

(e)           no event has occurred and is continuing or will result from the execution and delivery of this Amendment or the consummation of a Qualifying IPO, the Qualifying IPO Payment, the Qualifying Senior Notes Redemption and/or the Qualifying Preferred Stock Redemption (in each case, after giving effect to this Amendment) that would constitute a Default or an Event of Default;

 

(f)            since December 31, 2006, no event has occurred that has resulted, or could reasonably be expected to result, in a Material Adverse Effect;

 

(g)           each of the representations and warranties made by the Borrower in or pursuant to the Credit Documents are true and correct in all material respects on and as of the date this representation is being made, except for representations and warranties expressly stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date;

 

(h)           the Borrower has obtained $40 million in Additional Term Loan Commitments; and

 

(i)            after giving effect to (i) a Qualifying IPO, (ii) the redemption of the Senior Notes by the Borrower pursuant to the Qualifying Senior Notes Redemption, (iii) the payment of the Qualifying IPO Payment, (iv) the redemption by Holdings of all preferred stock of Holdings pursuant to the Qualifying Preferred Stock Redemption and (v) the incurrence of $40 million aggregate principal amount of Additional Term Loan Commitments, the aggregate amount of (1) Cash of the Borrower in Deposit Accounts subject to a Blocked Account Agreement and (2) Excess Availability (as defined in the Revolving Credit Facility) shall be at least $15,000,000; provided, that Excess Availability will be calculated without giving effect to any Cash.

 

Each Lender party to this Amendment represents and warrants to each Agent and each Lender that it has made its own independent investigation of the terms of the Credit Agreement and the Amended Credit Agreement and the facts and circumstances surrounding this Amendment, and has not relied in any way on any statement, advice or recommendation of any Agent or Lender in connection herewith.  No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such investigation on behalf of Lenders or to provide any Lender with any information, advice or recommendation with respect thereto, whether coming into its possession before the execution of this Amendment or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to Lenders relating to any of the foregoing.

 

5.             Effectiveness of Amendments.  This Amendment (other than Section 6 hereof which shall be effective as set forth in such Section) shall be effective as of the first date (the “Second Amendment Effective Date”) on which all of the following conditions precedent have been satisfied:

 

(a)           The Administrative Agent shall have received a counterpart signature page of this Amendment duly executed by each of the Credit Parties and the Requisite Lenders;

 

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(b)           The Administrative Agent shall have received a certificate signed by the chief financial officer of the Borrower dated the Second Amendment Effective Date, certifying (A) that the representations and warranties contained in Section 4 of this Amendment are true and correct as of the Second Amendment Effective Date and (B) that no event shall have occurred and be continuing or would result from the consummation of a Qualifying IPO, the Qualifying Senior Notes Redemption, the Qualifying Preferred Stock Redemption and/or the Qualifying IPO Payment (in each case, after giving effect to this Amendment) that would constitute a Default or an Event of Default;

 

(c)           The Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), in connection with this Amendment (or shall have made arrangements for the payment thereof satisfactory to the Administrative Agent);

 

(d)           a Qualifying IPO shall have occurred;

 

(e)           Borrower shall have delivered or cause to be delivered any legal opinions or other documents requested by Administrative Agent connection with the making of the Additional Term Loans;

 

(f)            Each Credit Party shall have delivered a solvency certificate in form and substance satisfactory to the Administrative Agent; and

 

(g)           Borrower shall pay, to each Lender executing this Amendment on or before April 16, 2010 by 12:00 p.m. New York City Time, an amendment fee equal to 0.25% of such Lender’s Term Loan Exposure (before giving effect to the making of any Additional Term Loans), which amendment fee shall be payable concurrently with the consummation of the Qualifying IPO.

 

6.             Delivery of Financial Statements.  Notwithstanding the provisions set forth in Section 5.1(c) of the Credit Agreement to the contrary, the financial statements of Holdings and its Subsidiaries for the Fiscal Year ended December 31, 2009 that were delivered to the Administrative Agent prior to the date hereof shall be deemed to satisfy the requirements of Section 5.1(c) that such financial statements be of the Company and its Subsidiaries solely with respect to the Fiscal Year ended December 31, 2009.  Notwithstanding the provisions set forth in Section 5.1(b) of the Credit Agreement requiring delivery of certain financial statements of the Company and its Subsidiaries, delivery of comparable financial statements of Holdings and its Subsidiaries shall be deemed to satisfy such requirement solely with respect to the Fiscal Quarters ending March 31, 2010 and June 30, 2010.  Notwithstanding the provisions of Section 5 of this Amendment, the provisions of this Section 6 shall be effective immediately upon receipt by Administrative Agent of a counterpart signature page of this Amendment duly executed by each of the Credit Parties and the Requisite Lenders.

 

7.             MiscellaneousTHIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).  This Amendment may be executed in one or more duplicate counterparts and when signed by all of the parties listed below shall constitute a single binding agreement.  Except for the amendments set forth in Section 3 hereof and the consent set forth in Section 2 hereof, all of the provisions of the Credit Agreement and the other Credit Documents shall remain in full force and effect.  The foregoing amendments shall be strictly construed in accordance with the express terms thereof.  Except with respect to the matters specifically waived or amended thereby, Section 2 and 3 above shall not operate as a waiver of any right, remedy, power or privilege of any Lender or the Administrative Agent under the Credit Agreement or any other Credit Document or of any other term or condition of the Credit Agreement or any other Credit Document.  This Amendment shall be deemed a “Credit Document” as defined in the Credit Agreement.  Sections 10.15 and 10.16 of the Credit Agreement shall apply to this

 

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Amendment and all past and future amendments to the Credit Agreement and other Credit Documents as if expressly set forth herein or therein.

 

8.             Additional Term LoansConcurrent with the occurrence of the Second Amendment Effective Date, the Persons party to a Term Loan Joinder Agreement as lenders (each an “Additional Term Loan Lender”) shall make Term Loans (the “Additional Term Loans”) to the Borrower in an amount equal to the amount set forth in such Additional Term Loan Lender’s Term Loan Joinder Agreement (the “Additional Term Loan Commitments”); provided, that such Additional Term Loans shall be made with 1% of original issue discount, such that the amount funded on the Second Amendment Effective Date by each Lender in respect of its Additional Term Loans shall be 99% of its Additional Term Loan Commitment.  The aggregate amount of the Additional Term Loan Commitments is $40,000,000.  Such Additional Term Loan Commitments shall be effected pursuant to one or more Term Loan Joinder Agreements executed and delivered by Borrower, each Additional Term Loan Lender and Administrative Agent, and each of which shall be recorded in the Register and shall be subject to the requirements set forth in Section 2.19(c) of the Amended Credit Agreement.  The amount of each Additional Term Loan owing to each Additional Term Loan Lender as of the Second Amendment Effective Date (before giving effect to any subsequent repayments) shall be an amount equal to 100% of such Additional Term Loan Lender’s Additional Term Loan Commitment, irrespective that the amount funded on the Second Amendment Effective Date is 99% of such Additional Term Loan Commitment.  The terms of the Additional Term Loan Commitments shall be as set forth in the Amended Credit Agreement.

 

9.             Acknowledgement and Consent.

 

Each Guarantor has read this Amendment and consents to the terms hereof and further hereby confirms and agrees that, notwithstanding the effectiveness of this Amendment, the obligations of such Guarantor under, and the Liens granted by such Guarantor as collateral security for the indebtedness, obligations and liabilities evidenced by the Credit Agreement and the other Credit Documents pursuant to, each of the Credit Documents to which such Guarantor is a party shall not be impaired and each of the Credit Documents to which such Guarantor is a party is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects.  Each of Holdings, Borrower and the Guarantor Subsidiaries hereby acknowledges and agrees that the Secured Obligations under, and as defined in, the Term Pledge and Security Agreement dated as of May 21, 2007, by and among Holdings, Borrower, the Guarantor Subsidiaries and Administrative Agent (the “Pledge and Security Agreement”) and, with respect to the other Collateral Documents, the Obligations secured by the Liens granted thereby, will include all Obligations under, and as defined in, the Amended Credit Agreement.

 

Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Credit Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Credit Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.

 

10.           Consent to ABL Amendment and Intercreditor Amendment.

 

(a)           Pursuant to Section 5.3(a) of the Intercreditor Agreement, the Lenders party hereto hereby consent to (i) an amendment to the ABL Credit Agreement (as defined in the Intercreditor Agreement) in substantially the form of Exhibit B and (ii) any amendments to the other ABL Loan Documents (as defined in the Intercreditor Agreement) executed in connection therewith; and

 

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(b)           The Lenders party hereto hereby consent to the execution of an amendment to the Intercreditor Agreement in substantially the form of Exhibit C (the “Intercreditor Amendment”) and hereby authorize and instruct (i) the Administrative Agent to execute the Intercreditor Amendment in its capacity as Term Administrative Agent thereunder and (ii) the Collateral Agent to execute the Intercreditor Amendment in its capacity as Term Collateral Agent thereunder.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed by their duly authorized officers as of the day and year first above written.

 

 

BORROWER:

 

 

 

DOUGLAS DYNAMICS, L.L.C.

 

 

 

 

 

By:

/s/ Robert McCormick

 

Name:

Robert McCormick

 

Title:

VP CFO

 

 

 

 

 

GUARANTORS (for purposes of Section 9):

 

 

 

DOUGLAS DYNAMICS, INC.

 

 

 

 

 

By:

/s/ Robert McCormick

 

Name:

Robert McCormick

 

Title:

VP CFO

 

 

 

 

 

DOUGLAS DYNAMICS FINANCE COMPANY

 

 

 

 

 

By:

/s/ Robert McCormick

 

Name:

Robert McCormick

 

Title:

VP CFO

 

 

 

 

 

FISHER, LLC

 

 

 

 

 

By:

/s/ Robert McCormick

 

Name:

Robert McCormick

 

Title:

VP CFO

 

Amendment No. 2

 



 

 

Russell Investment Company plc, as a Lender

 

 

 

 

 

By:

/s/ Michael Bishof

 

Name:

Michael Bishof

 

Title:

COO, Logan Circle Partners

 

Amendment No. 2

 


 

 

Russell Multi-Manager Bond Fund, as a Lender

 

 

 

 

 

By:

/s/ Michael Bishof

 

Name:

Michael Bishof

 

Title:

COO, Logan Circle Partners

 

Amendment No. 2

 



 

 

Russell Strategic Bond Fund, as a Lender

 

 

 

 

 

By:

/s/ Michael Bishof

 

Name:

Michael Bishof

 

Title:

COO, Logan Circle Partners

 

Amendment No. 2

 



 

 

Russell Institutional Funds, LLC – Russell Core Bond Fund, as a Lender

 

 

 

 

 

By:

/s/ Michael Bishof

 

Name:

Michael Bishof

 

Title:

COO, Logan Circle Partners

 

Amendment No. 2

 



 

 

Integrys Energy Group, Inc. Retirement Plan Trust, as a Lender

 

 

 

 

 

By:

/s/ Michael Bishof

 

Name:

Michael Bishof

 

Title:

COO, Logan Circle Partners

 

Amendment No. 2

 



 

 

Allina Health System Trust, as a Lender

 

 

 

 

 

By:

/s/ Michael Bishof

 

Name:

Michael Bishof

 

Title:

COO, Logan Circle Partners

 

Amendment No. 2

 



 

 

Sunoco Inc Master Retirement Trust, as a Lender

 

 

 

 

 

By:

/s/ Michael Bishof

 

Name:

Michael Bishof

 

Title:

COO, Logan Circle Partners

 

Amendment No. 2

 



 

 

 

Atrium VI

 

 

 

By: Credit Suisse Alternative Capital, Inc., as collateral manager

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Atrium IV

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Madison Park Funding IV, Ltd.
By Credit Suisse Alternative Capital, Inc., as collateral manager

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Atrium III

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 


 

 

CSAM Funding III

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

CSAM Funding IV

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Madison Park Funding I, Ltd,

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Madison Park Funding III, Ltd.
By Credit Suisse Alternative Capital, Inc., as collateral manager

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Madison Park Funding VI, Ltd.
By: Credit Suisse Alternative Capital, Inc., as collateral manager

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Credit Suisse Syndicated Loan Fund

 

By: Credit Suisse Alternative Capital, Inc., as Agent (Subadviser) for Credit Suisse Asset Management (Australia) Limited, the Responsible Entity for Credit Suisse Syndicated Loan Fund

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Castle Garden Funding

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Madison Park Funding V, Ltd.

 

By: Credit Suisse Alternative Capital, Inc., as collateral manager

 

 

 

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Atrium V

 

By: Credit Suisse Alternative Capital, Inc., as collateral manager

 

 

 

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 



 

 

Madison Park Funding II, Ltd.

 

By Credit Suisse Alternative Capital, Inc. as collateral manager

 

 

 

as a Lender

 

 

 

 

 

By:

/s/ David H. Lerner

 

Name:

David H. Lerner

 

Title:

Authorized Signatory

 

Amendment No. 2

 


 

 

WHITNEY CLO I,

 

as a Lender

 

 

 

 

 

By:

/s/ John M. Casparian

 

Name:

John M. Casparian

 

Title:

Co-President

 

 

 

 

Churchill Pacific Asset Management LLC

 



 

 

SIERRA CLO II,

 

as a Lender

 

 

 

 

 

By:

/s/ John M. Casparian

 

Name:

John M. Casparian

 

Title:

Co-President

 

 

 

 

Churchill Pacific Asset Management LLC

 



 

 

SHASTA CLO I,

 

as a Lender

 

 

 

 

 

By:

/s/ John M. Casparian

 

Name:

John M. Casparian

 

Title:

Co-President

 

 

 

 

Churchill Pacific Asset Management LLC

 



 

 

SAN GABRIEL CLO I,

 

as a Lender

 

 

 

 

 

By:

/s/ John M. Casparian

 

Name:

John M. Casparian

 

Title:

Co-President

 

 

 

 

Churchill Pacific Asset Management LLC

 



 

 

OLYMPIC CLO I,

 

as a Lender

 

 

 

 

 

By:

/s/ John M. Casparian

 

Name:

John M. Casparian

 

Title:

Co-President

 

 

 

 

Churchill Pacific Asset Management LLC

 



 

 

KINGSLAND I, LTD.,

 

as a Lender

 

 

 

By:

Kingsland Capital Management, LLC as Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Vincent Siino

 

 

Name:

Vincent Siino

 

 

Title:

Authorized Officer

 

Amendment No. 2

 



 

 

KINGSLAND II, LTD.,

 

as a Lender

 

 

 

By:

Kingsland Capital Management, LLC as Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Vincent Siino

 

 

Name:

Vincent Siino

 

 

Title:

Authorized Officer

 

Amendment No. 2

 



 

 

KINGSLAND IV, LTD.,

 

as a Lender

 

 

 

By:

Kingsland Capital Management, LLC as Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Vincent Siino

 

 

Name:

Vincent Siino

 

 

Title:

Authorized Officer

 

Amendment No. 2

 



 

 

KINGSLAND V, LTD.,

 

as a Lender

 

 

 

By:

Kingsland Capital Management, LLC as Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Vincent Siino

 

 

Name:

Vincent Siino

 

 

Title:

Authorized Officer

 

Amendment No. 2

 



 

 

Sands Point Funding Ltd.,

 

as a Lender

 

 

 

 

 

By:

Guggenheim Investment Management, LLC as Collateral Manager

 

 

 

 

 

 

By:

/s/ Kaitlin Trinh

 

 

Name:

KAITLIN TRINH

 

 

Title:

DIRECTOR

 

Amendment No. 2

 


 

 

Green Lane CLO Ltd.,

 

as a Lender

 

 

 

 

 

By:

Guggenheim Investment Management, LLC as Collateral Manager

 

 

 

 

 

 

By:

/s/ Kaitlin Trinh

 

 

Name:

KAITLIN TRINH

 

 

Title:

DIRECTOR

 

Amendment No. 2

 



 

 

Kennecott Funding Ltd..,

 

as a Lender

 

 

 

 

 

By:

Guggenheim Investment Management, LLC as Collateral Manager

 

 

 

 

 

 

By:

/s/ Kaitlin Trinh

 

 

Name:

KAITLIN TRINH

 

 

Title:

DIRECTOR

 

Amendment No. 2

 



 

 

1888 Fund, Ltd.,

 

as a Lender

 

 

 

 

 

By:

Guggenheim Investment Management, LLC as Collateral Manager

 

 

 

 

 

 

By:

/s/ Kaitlin Trinh

 

 

Name:

KAITLIN TRINH

 

 

Title:

DIRECTOR

 

Amendment No. 2

 



 

 

Copper River CLO Ltd.,

 

as a Lender

 

 

 

 

 

By:

Guggenheim Investment Management, LLC as Collateral Manager

 

 

 

 

 

 

By:

/s/ Kaitlin Trinh

 

 

Name:

KAITLIN TRINH

 

 

Title:

DIRECTOR

 

Amendment No. 2

 



 

 

MARLBOROUGH STREET CLO, LTD.,

 

By its Collateral Manager, Massachusetts Financial Services Company, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ David Cobey

 

 

Name:

David Cobey

 

 

Title:

As authorized representative and not individually

 

Amendment No. 2

 



 

 

Morgan Stanley Investment

 

Management Croton, Ltd.

 

By:

Morgan Stanley Investment Management Inc. as Collateral Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Robert Drobny

 

 

Name:

ROBERT DROBNY

 

 

Title:

Executive Diretor

 

Amendment No. 2

 



 

ARES IIIR/IVR CLO LTD., as a Lender

ARES VII CLO LTD., as a Lender

ARES VIII CLO LTD., as a Lender

ARES XI CLO LTD., as a Lender

 

 

ARES IIIR/IVR CLO LTD.

BY: ARES CLO MANAGEMENT IIIR/IVR, L.P., ITS ASSET MANAGER

 

 

BY: ARES CLO GP IIIR/IVR, LLC, ITS GENERAL PARTNER

 

BY: ARES MANAGEMENT LLC, ITS MANAGER

 

 

By:

/s/ Seth Brufsky

 

Name:

Seth Brufsky

 

Title:

Vice President

 

 

ARES VII CLO LTD.

 

BY: ARES CLO MANAGEMENT VII, L.P., ITS INVESTMENT MANAGER

 

 

BY: ARES CLO GP VII, LLC, ITS GENERAL PARTNER

 

 

BY: ARES MANAGEMENT LLC, ITS MANAGER

 

 

By:

/s/ Seth Brufsky

 

Name:

Seth Brufsky

 

Title:

Vice President

 

 

Amendment No. 2

 



 

ARES VIII CLO LTD.

 

BY: ARES CLO MANAGEMENT VIII, L.P., ITS INVESTMENT MANAGER

 

 

BY: ARES CLO GP VIII, LLC, ITS GENERAL PARTNER

 

 

BY: ARES MANAGEMENT LLC, ITS MANAGER

 

 

By:

/s/ Seth Brufsky

 

Name:

Seth Brufsky

 

Title:

Vice President

 

 

 

ARES XI CLO LTD.

 

By: ARES CLO MANAGEMENT XI, L.P., ITS ASSET MANAGER

 

 

By: ARES CLO GP XI, LLC, ITS GENERAL PARTNER

 

 

By: ARES MANAGEMENT LLC, ITS MANAGER

 

 

By:

/s/ Seth Brufsky

 

Name:

Seth Brufsky

 

Title:

Vice President

 

 

Amendment No. 2

 



 

 

Apidos CINCO CDO

 

as a Lender

 

 

 

 

By its Investment Advisor Apidos Capital Management, LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ Gretchen Bergstresser

 

 

Name:

Gretchen Bergstresser

 

 

Title:

Sr. Portfolio Manager

 

Amendment No. 2

 



 

 

Avery Point CLO, Limited

 

By:

Sankaty Advisors LLC,

 

as Collateral Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew S. Viens

 

 

Name:

Andrew S. Viens

 

 

Title:

Sr. Vice President of Operations

 

Amendment No. 2

 


 

 

Castle Hill II-Ingots, Ltd

 

By:

Sankaty Advisors LLC,

 

as Collateral Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew S. Viens

 

 

Name:

Andrew S. Viens

 

 

Title:

Sr. Vice President of Operations

 

Amendment No. 2

 



 

 

Race Point II CLO, Limited

 

By:

Sankaty Advisors LLC,

 

as Collateral Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew S. Viens

 

 

Name:

Andrew S. Viens

 

 

Title:

Sr. Vice President of Operations

 

Amendment No. 2

 



 

 

Race Point IV CLO, Ltd

 

By:

Sankaty Advisors LLC,

 

as Collateral Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew S. Viens

 

 

Name:

Andrew S. Viens

 

 

Title:

Sr. Vice President of Operations

 

Amendment No. 2

 



 

 

SSS Funding II, LLC

 

By:

Sankaty Advisors LLC,

 

as Collateral Manager

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew S. Viens

 

 

Name:

Andrew S. Viens

 

 

Title:

Sr. Vice President of Operations

 

Amendment No. 2

 



 

 

[The Prudential Insurance Company of America],

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Stephen J. Collins

 

 

 

 

 

 

Name:

Stephen J. Collins

 

 

 

 

 

 

Title:

Prudential Investment Management, Inc., as investment advisor

 

Amendment No. 2

 



 

ACKNOWLEDGED:

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as the Administrative Agent

 

 

 

By:

/s/ William O’Daly

 

Name: William O’Daly

 

Title: Director

 

 

 

By:

/s/ Ilya Ivashkov

 

Name: Ilya Ivashkov

 

Title:  Associate

 

Amendment No. 2

 


 

Exhibit A

 

Amended Credit Agreement

 

See attached.

 

Amendment No. 2

 


 

Exhibit B

 

Amendment to ABL Credit Agreement

 

See Exhibit 10.3 to Amendment No. 5 to the Registration Statement on Form S-1 of Douglas Dynamics, Inc. (File No. 333-164590).

 


 

Exhibit C

 

Intercreditor Amendment

 

See attached.

 


 

EXHIBIT A to Amendment No. 2

 

COMPOSITE CREDIT AGREEMENT

(as amended by Amendment No. 1, dated as of December 19, 2008

and Amendment No. 2, dated as of April 16, 2010)

 

 

CREDIT AND GUARANTY AGREEMENT

 

dated as of May 21, 2007

 

among

 

DOUGLAS DYNAMICS, L.L.C.

 

as Borrower

 

DOUGLAS DYNAMICS, INC.,

DOUGLAS DYNAMICS FINANCE COMPANY,
FISHER, LLC

 

as Guarantors,

 

THE BANKS AND FINANCIAL INSTITUTIONS LISTED HEREIN,
as Lenders,

 

CREDIT SUISSE SECURITIES (USA) LLC,
as Sole Bookrunner and Sole Lead Arranger,

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as Collateral Agent, Administrative
Agent,
Syndication Agent and Documentation Agent

 


 

Senior Secured Term Loan Facility

 


 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

SECTION 1.

DEFINITIONS AND INTERPRETATION

1

1.1

Definitions

1

1.2

Accounting Terms

33

1.3

Interpretation, etc.

33

SECTION 2.

LOANS

33

2.1

Term Loans

33

2.2

[RESERVED]

34

2.3

[RESERVED]

34

2.4

Pro Rata Shares; Availability of Funds

34

2.5

Use of Proceeds

35

2.6

Evidence of Debt; Register; Lenders’ Books and Records; Notes

35

2.7

Interest on Loans

36

2.8

Conversion/Continuation

37

2.9

Default Interest

38

2.10

Fees

38

2.11

Scheduled Term Loan Payments

38

2.12

Voluntary Prepayments

39

2.13

Mandatory Prepayments

40

2.14

Application of Prepayments/Reductions

41

2.15

General Provisions Regarding Payments

42

2.16

Ratable Sharing

44

2.17

Making or Maintaining Eurodollar Rate Loans

44

2.18

Increased Costs; Capital Adequacy

46

2.19

Taxes; Withholding, etc.

47

2.20

Obligation to Mitigate

49

2.21

Call Protection

50

2.22

Removal or Replacement of a Lender

50

SECTION 3.

CONDITIONS PRECEDENT

51

3.1

Closing Date

51

3.2

Notices

54

SECTION 4.

REPRESENTATIONS AND WARRANTIES

54

4.1

Organization; Requisite Power and Authority; Qualification

54

4.2

Capital Stock and Ownership

55

4.3

Due Authorization

55

4.4

No Conflict

55

4.5

Governmental Consents

55

4.6

Binding Obligation

55

4.7

Financial Condition

56

4.8

Projections

56

4.9

No Material Adverse Change

56

4.10

No Restricted Payments

56

4.11

Litigation; Adverse Facts

57

4.12

Payment of Taxes

57

 

i



 

4.13

Properties

57

4.14

Environmental Matters

58

4.15

No Defaults

59

4.16

Governmental Regulation

59

4.17

Margin Regulations

59

4.18

Employee Matters

59

4.19

Employee Benefit Plans

60

4.20

Certain Fees

60

4.21

Solvency

61

4.22

Collateral

61

4.23

Disclosure

61

4.24

Deposit Accounts

62

SECTION 5.

AFFIRMATIVE COVENANTS

62

5.1

Financial Statements and Other Reports

62

5.2

Existence

65

5.3

Payment of Taxes and Claims

66

5.4

Maintenance of Properties

66

5.5

Insurance

66

5.6

Inspections

66

5.7

Lenders Meetings

67

5.8

Compliance with Laws

67

5.9

Environmental

67

5.10

Subsidiaries

68

5.11

Additional Real Estate Assets

69

5.12

[Reserved]

70

5.13

Further Assurances

70

5.14

ERISA

70

5.15

Maintenance of Credit Rating

70

SECTION 6.

NEGATIVE COVENANTS

70

6.1

Indebtedness

71

6.2

Liens

73

6.3

Sales and Leasebacks

75

6.4

No Further Negative Pledges

76

6.5

Restricted Payments

76

6.6

Restrictions on Subsidiary Distributions

78

6.7

Investments

78

6.8

Calculations

80

6.9

Fundamental Changes; Asset Dispositions; Acquisitions

81

6.10

Disposal of Subsidiary Interests

82

6.11

Fiscal Year

82

6.12

Transactions with Shareholders and Affiliates

83

6.13

Conduct of Business

83

6.14

Permitted Activities of Holdings

83

6.15

Amendments or Waivers of Certain Agreements

83

6.16

Limitation on Payments Relating to Other Debt

84

SECTION 7.

GUARANTY

85

 

ii



 

7.1

Guaranty of the Obligations

85

7.2

Contribution by Guarantors

85

7.3

Payment by Guarantors

86

7.4

Liability of Guarantors Absolute

86

7.5

Waivers by Guarantors

88

7.6

Guarantors’ Rights of Subrogation, Contribution, etc.

89

7.7

Subordination of Other Obligations

90

7.8

Continuing Guaranty

90

7.9

Authority of Guarantors or Company

90

7.10

Financial Condition of Company

90

7.11

Bankruptcy, etc.

90

7.12

Discharge of Guaranty Upon Sale of Guarantor

91

SECTION 8.

EVENTS OF DEFAULT

91

8.1

Events of Default

91

SECTION 9.

AGENTS

94

9.1

Appointment of Agents

94

9.2

Powers and Duties

95

9.3

General Immunity

95

9.4

Agents Entitled to Act as Lender

96

9.5

Lenders’ Representations, Warranties and Acknowledgment

96

9.6

Right to Indemnity

97

9.7

Successor Administrative Agent

97

9.8

Collateral Documents and Guaranty

98

SECTION 10.

MISCELLANEOUS

98

10.1

Notices

98

10.2

Expenses

101

10.3

Indemnity

101

10.4

Set-Off

102

10.5

Amendments and Waivers

103

10.6

Successors and Assigns; Participations

104

10.7

Independence of Covenants

109

10.8

Survival of Representations, Warranties and Agreements

109

10.9

No Waiver; Remedies Cumulative

109

10.10

Marshalling; Payments Set Aside

109

10.11

Severability

110

10.12

Obligations Several; Independent Nature of Lenders’ Rights

110

10.13

Headings

110

10.14

APPLICABLE LAW

110

10.15

CONSENT TO JURISDICTION

110

10.16

WAIVER OF JURY TRIAL

111

10.17

Confidentiality

111

10.18

Usury Savings Clause

112

10.19

Counterparts

113

10.20

Effectiveness

113

 

iii



 

APPENDICES:

A

[Reserved]

 

B

Notice Addresses

 

 

 

SCHEDULES:

4.1

Organization and Capital Structure

 

4.2

Capital Stock and Ownership

 

4.9

Absence of Certain Changes

 

4.11

Litigation

 

4.13

Real Estate Assets

 

4.14

Environmental

 

4.18

Employee Matters

 

4.19

Employee Benefit Plans

 

4.22

Certain Existing Liens

 

4.24

Deposit Accounts

 

6.1

Certain Indebtedness

 

6.2

Certain Liens

 

6.7

Certain Investments

 

6.12

Certain Affiliate Transactions

 

 

 

EXHIBITS:

A-1

Funding Notice

 

A-2

Conversion/Continuation Notice

 

B

Term Loan Note

 

C

Compliance Certificate

 

D

Opinion of Counsel for Credit Parties

 

E

Assignment Agreement

 

F

Certificate Re Non-bank Status

 

G

Solvency Certificate

 

H

Counterpart Agreement

 

I

Pledge and Security Agreement

 

J

Mortgage

 

K

Restricted Payment Certificate

 

L

Intercreditor Agreement

 

M

Fixed Charge Coverage Compliance Certificate

 

iv


 

 

ACKNOWLEDGED:

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as the Administrative Agent

 

 

 

By:

/s/ William O’Daly

 

Name: William O’Daly

 

Title: Director

 

 

 

By:

/s/ Ilya Ivashkov

 

Name: Ilya Ivashkov

 

Title:  Associate

 

Amendment No. 2

 



 

Schedule I

 

Additional Term Loan Commitments

 

Lender

 

Additional Term Loan
Commitment

 

Pro Rata Share

 

[                        ]

 

$

[                 ]

 

[                 ]

%

[                        ]

 

$

[                 ]

 

[                 ]

%

[                        ]

 

$

[                 ]

 

[                 ]

%

[                        ]

 

$

[                 ]

 

[                 ]

%

[                        ]

 

$

[                 ]

 

[                 ]

%

[                        ]

 

$

[                 ]

 

[                 ]

%

 

 

 

 

 

 

Total

 

$

40,000,000

 

100.000000000

%

 

Amendment No. 2

 


 

CREDIT AND GUARANTY AGREEMENT

 

CREDIT AND GUARANTY AGREEMENT, dated as of May 21, 2007 (the “Agreement”), by and among Douglas Dynamics, Inc., a Delaware corporation (“Holdings”), Douglas Dynamics, L.L.C., a Delaware limited liability company and a direct wholly-owned Subsidiary of Holdings (the “Company” or the “Borrower”), Fisher, LLC, a Delaware limited liability company (“Fisher”) and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,” and together with Fisher and Holdings, each a “Guarantor” and collectively the “Guarantors”) the banks and financial institutions listed on the signature pages hereof (together with their respective successors and assigns, each individually referred to herein as a “Lender” and collectively as “Lenders”), Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as sole bookrunner and sole lead arranger (the “Arranger”), Credit Suisse, as syndication agent (“Syndication Agent”), Credit Suisse, as  documentation agent (the “Documentation Agent”), Credit Suisse as collateral agent for the Lenders (in such capacity, the “Collateral Agent”) and Credit Suisse as administrative agent for the Lenders (in such capacity, “Administrative Agent”).

 

RECITALS:

 

WHEREAS, the Borrower has requested, and the Lenders have agreed, to extend certain credit facilities to the Borrower on the terms and conditions of this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

 

SECTION 1.         DEFINITIONS AND INTERPRETATION

 

1.1          Definitions.  The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

 

ABL Priority Collateral has the meaning assigned to that term in the Intercreditor Agreement.

 

Accepting Lenders” has the meaning assigned to that term in Section 2.14(d).

 

Additional Term Loan Commitment means the commitment of a Lender to make or otherwise fund any Additional Term Loan and “Additional Term Loan Commitments means such commitments of all Lenders in the aggregate.  The amount of each Lender’s Additional Term Loan Commitment, if any, is set forth in the Second Amendment or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof.

 

Additional Term Loan Lender means a Lender that becomes a party hereto pursuant to the Term Loan Joinder Agreement.

 

Additional Term Loan Maturity Date” means May 21, 2016.

 

1



 

Additional Term Loans” means the Term Loans made pursuant to the Second Amendment and the Term Loan Joinder Agreement on the Second Amendment Effective Date.

 

Administrative Agent has the meaning assigned to that term in the preamble hereto.

 

Adjusted Eurodollar Rate means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan, the greater of (1) 2.00% per annum and (2) the rate per annum obtained by dividing (i) (a) the rate per annum determined by the Administrative Agent by reference to the British Bankers’ Association Interest Settlement Rates for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date (as set forth by Bloomberg Information Service or any successor thereto or any other service selected by Administrative Agent which has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates), or (b) in the event the rate referenced in the preceding clause (a) is not available, the rate per annum equal to the offered quotation rate to first class banks in the London interbank market by Credit Suisse for deposits (for delivery on the first day of the relevant period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan of Administrative Agent, in its capacity as a Lender, for which the Adjusted Eurodollar Rate is then being determined with maturities comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve Requirement.

 

Adverse Proceeding means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Holdings or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of Holdings or any of its Subsidiaries, threatened against or affecting Holdings or any of its Subsidiaries or any property of Holdings or any of its Subsidiaries.

 

Affected Lender has the meaning assigned to that term in Section 2.17(b).

 

Affected Loans has the meaning assigned to that term in Section 2.17(b).

 

Affiliate means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

Agent means each of Administrative Agent, Collateral Agent, Syndication Agent and Documentation Agent.

 

2



 

Aggregate Amounts Due has the meaning assigned to that term in Section 2.16.

 

Aggregate Payments has the meaning assigned to that term in Section 7.2.

 

Agreement has the meaning assigned to that term in the preamble hereto.

 

Applicable Margin” means a percentage, per annum, equal to:

 

 

 

Base Rate
Loans

 

Eurodollar Rate
Loans

 

Term Loans (other than Additional Term Loans)

 

3.50

%

4.50

%

Additional Term Loans

 

4.00

%

5.00

%

 

Applicable Reserve Requirement means, at any time, for any Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which reserves (including, without limitation, any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained by any member bank of the Federal Reserve System against “Eurocurrency liabilities” (as such term is defined in Regulation D) under regulations issued from time to time by the Board of Governors of the Federal Reserve System or any successor thereto.  Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable Adjusted Eurodollar Rate is to be determined, or (ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans.  A Eurodollar Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offsets that may be available from time to time to the applicable Lender.  The rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement.

 

Ares Group Investors means  (i) the Ares Corporate Opportunities Fund, L.P. (the “Ares Limited Partnership”), (ii) ACOF Management, L.P., (iii) ACOF Operating Manager, L.P., (iv) Ares Management, Inc., (v) Ares Management LLC, (vi) any limited partners of any of the foregoing entities and (vii) partners, members, managing directors, officers or employees of any of those entities referenced in clauses (ii) through (v), provided that each Person set forth in clauses (vi) and (vii) shall only constitute an Ares Group Investor so long as it gives a proxy to, or otherwise agrees that it will vote in a manner consistent with, the Ares Limited Partnership (except to the extent otherwise required by ERISA or other applicable law) and the entity to which it is required to give a proxy to or otherwise vote consistently with continues to own Capital Stock in Parent.

 

Arranger has the meaning assigned to that term in the preamble hereto.

 

3



 

Asset Sale means a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback, assignment, conveyance, transfer or other disposition to, or any exchange of property with, any Person (other than the Borrower or any Guarantor Subsidiary), in one transaction or a series of transactions, of all or any part of Holdings’, Company’s, or any of its Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, including, without limitation, the Capital Stock of any of Holdings’ Subsidiaries, other than (i) inventory sold or leased in the ordinary course of business (excluding any such sales by operations or divisions discontinued or to be discontinued), (ii) equipment that is surplus, obsolete, worn-out, or no longer used or useful in the business of Holdings, Company or any of its Subsidiaries, (iii) leasehold interests that are no longer used or useful in the business of Holdings, Company or any of its Subsidiaries, (iv) dispositions, by means of trade-in, of equipment used in the ordinary course of business, so long as such equipment is replaced, substantially concurrently, by like-kind equipment in an effort to upgrade the Facilities of Company and its Subsidiaries, (v) Cash and Cash Equivalents used in a manner not prohibited by the Credit Documents or the Revolving Credit Documents, and (vi) sales of other assets for aggregate consideration of less than $1,000,000 with respect to any transaction or series of related transactions and less than $3,000,000 in the aggregate during any calendar year (provided, that for purposes of calculating the amounts set forth in this clause (vi), any transactions or series of related transactions involving aggregate consideration of $50,000 or less may be excluded).

 

Assignment Agreement means an Assignment and Assumption Agreement substantially in the form of Exhibit E, with such amendments or modifications as may be approved by Administrative Agent.

 

Attributable Indebtedness” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended.  Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

 

Aurora Group Investors means (i) Aurora Equity Partners II L.P. and Aurora Overseas Equity Partners II, L.P. (the “Limited Partnerships”), (ii) Aurora Capital Partners II L.P. and Aurora Overseas Capital Partners II, L.P. (the “General Partners”), (iii) Aurora Advisors II LLC and Aurora Overseas Advisors, II, LDC (the “Ultimate General Partners”), (iv) any limited partners of the Limited Partnerships or any limited partners of the General Partners, provided that such limited partner gives a proxy to, or otherwise agrees that it will vote in a manner consistent with, the Limited Partnerships (except to the extent otherwise required by ERISA or other applicable law) or the General Partners, (v) any managing director or employee of Aurora Management Partners LLC, provided that such managing director or employee gives a proxy to, or otherwise agrees that he or she will vote in a manner consistent with the Limited Partnerships (except to the extent otherwise required by ERISA or other applicable law) or the General Partners, (vi) any member of the Advisory Board of Aurora Management Partners LLC, provided that such member gives a proxy to, or otherwise agrees that he or she will vote in a manner consistent with, the Limited Partnerships (except to the extent otherwise required by ERISA or other applicable law) or the General Partners, (vii) any Affiliate of Aurora

 

4



 

Management Partners LLC, provided that such Affiliate gives a proxy to, or otherwise agrees that it will vote in a manner consistent with, the Limited Partnerships or the General Partners, and (viii) any investment fund or other entity controlled by or under common control with, any one or more of the Ultimate General Partners or Aurora Management Partners LLC or the principals that control any one or more of the Ultimate General Partners or Aurora Management Partners LLC; provided that each Person set forth in clauses (iv) through (viii) shall only constitute an Aurora Group Investor so long as the entity to which it is required to give a proxy to or otherwise vote consistently with continues to own Capital Stock in Parent.

 

Authorized Officer means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), and such Person’s chief financial officer or treasurer.

 

Bankruptcy Code means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

 

Base Rate means, for any day, a rate per annum equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus ½ of 1%, and (iii) 3.00%.

 

Base Rate Loan means a Loan bearing interest at a rate determined by reference to the Base Rate.

 

Blocked Account” means any Deposit Account subject to a Blocked Account Agreement.

 

Blocked Account Agreementmeans an account control agreement on terms reasonably satisfactory to the Collateral Agent.

 

Beneficiary means each Agent, Lender and Lender Counterparty.

 

Borrower has the meaning assigned to that term in the preamble hereto.

 

Business Day means (i) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the States of New York or Wisconsin or is a day on which banking institutions located in either such state are authorized or required by law or other governmental action to close and (ii) with respect to all notices, determinations, fundings and payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term “Business Day” shall mean any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.

 

Capital Lease means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

 

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Capital Stock means any and all shares, interests, participations or other equivalents  (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

 

Cash means money, currency or a credit balance in any demand or deposit account.

 

Cash Equivalents means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit, time deposits or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s.

 

Certificate re Non-Bank Status means a certificate substantially in the form of Exhibit F.

 

Change of Control” means, at any time, (i) any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than Sponsor beneficially owns, directly or indirectly, more than 35%, on a fully diluted basis, of the outstanding Capital Stock (measured only by voting power) of Holdings entitled (without regard to the occurrence of any contingency) to vote for the election of members of the board of directors (or similar governing body) of Holdings, unless Sponsor beneficially owns and controls, on a fully diluted basis, more of the outstanding Capital Stock (measured only by voting power) of Holdings entitled (without regard to the occurrence of any contingency) to vote for the election of members of the board of directors (or similar governing body) of Holdings than any other Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act); or (ii) Holdings shall cease to beneficially own and control 100% on a fully diluted basis of the economic and voting interests in the Capital Stock of Company.

 

Change in Law” has the meaning assigned to that term in Section 2.18(a).

 

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Closing Date means May 21, 2007.

 

Collateral means, collectively, all of the real, personal and mixed property (including Capital Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.

 

Collateral Agent has the meaning assigned to that term in the preamble hereto.

 

Collateral Documents means the Pledge and Security Agreement, the Mortgages, the Blocked Account Agreements, the Intercreditor Agreement and all other instruments, documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant to Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or mixed property of that Credit Party as security for the Obligations (or to perfect any Liens so granted).

 

Commitment means any Term Loan Commitment.

 

Companyhas the meaning assigned to that term in the preamble hereto.

 

Compliance Certificate means a Compliance Certificate substantially in the form of Exhibit C.

 

Consolidated Adjusted EBITDA means, for any period, an amount determined for Company and its Subsidiaries on a consolidated basis equal to the total of (a) Consolidated Net Income, plus (b) the sum, without duplication, of each of the following to the extent deducted in the calculation of Consolidated Net Income for such period (i) Consolidated Interest Expense and non-Cash interest expense, (ii) provisions for taxes based on income, (iii) total depreciation expense, (iv) total amortization expense (including amortization of goodwill, other intangibles, and financing fees and expenses), (v) non-cash impairment charges, (vi) non-cash expenses resulting from the grant of stock and stock options and other compensation to management personnel of Company and its Subsidiaries pursuant to a written incentive plan or agreement, (vii) other non-Cash items that are unusual or otherwise non-recurring items, (viii) expenses or fees under the Management Services Agreement, as in effect on December 16, 2004 including any payments made under the Management Services Agreement and comprising all or any portion of the Qualifying IPO Payment, (ix) any extraordinary losses and non-recurring charges during any period (including severance, relocation costs, one-time compensation charges and losses or charges associated with Interest Rate Agreements), (x) restructuring charges or reserves (including costs related to closure of Facilities), (xi) any transaction costs incurred in connection with the issuance of Securities or any refinancing transaction, in each case whether or not such transaction is consummated, (xii) any fees and expensed related to any Permitted Acquisitions and (xiii) fees, expenses and other transaction costs incurred by Company and its Subsidiaries during such period in connection with the transactions contemplated by the First Amendment to Revolving Credit Facility, the Second Amendment and the Qualifying IPO minus (c) the sum, without duplication, of (i) non-Cash items increasing Consolidated Net Income for such period that are unusual or otherwise non-recurring items, (ii) cash payments made during such period reducing reserves or liabilities for accruals made in prior periods but only to the extent such reserves or accruals were

 

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added back to “Consolidated Adjusted EBITDA” in a prior period pursuant to clause (b)(vii) or (b)(viii) above, and (iii) Restricted Payments made during such period to Holdings pursuant to Section 6.5(c)(i) (other than any such Restricted Payments made to Holdings pursuant to Section 6.5(c)(i) for the purpose of paying fees, expenses and other transaction costs paid in cash during such period in connection with the transactions contemplated by the First Amendment to Revolving Credit Facility, the Second Amendment and the Qualifying IPO).

 

Consolidated Capital Expenditures means, for any period, the aggregate of all expenditures of Company and its Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “purchase of property and equipment” or similar items reflected in the consolidated statement of cash flows of Company and its Subsidiaries, but excluding expenditures constituting the purchase price for Permitted Acquisitions and amounts constituting Net Asset Sale Proceeds and Net Insurance/Condemnation Proceeds which are reinvested in the business of Company and its Subsidiaries in accordance with Section 2.13(a) or Section 2.13(b), respectively, by Company and its Subsidiaries during such period.

 

Consolidated Coverage Ratio on any date of determination (the “Transaction Date”) means the ratio, on a pro forma basis, of (a) the aggregate amount of Consolidated Adjusted EBITDA for the Test Period to (b) the aggregate Consolidated Fixed Charges during the Test Period; provided, that for purposes of such calculation: (1) Permitted Acquisitions which occurred during the Test Period or subsequent to the Test Period and on or prior to the Transaction Date shall be assumed to have occurred on the first day of the Test Period, (2) transactions giving rise to the need to calculate the Consolidated Coverage Ratio and the application of the proceeds therefrom (except as otherwise provided in this definition) shall be assumed to have occurred on the first day of the Test Period, (3) the incurrence of any Indebtedness (including the issuance of any Disqualified Capital Stock) during the Test Period or subsequent to the Test Period and on or prior to the Transaction Date (and the application of the proceeds therefrom to the extent used to refinance or retire other Indebtedness) (other than ordinary working capital borrowings) shall be assumed to have occurred on the first day of the Test Period, (4) the permanent repayment of any Indebtedness (including the redemption of any Disqualified Capital Stock) during the Test Period or subsequent to the Test Period and on or prior to the Transaction Date (other than ordinary working capital borrowings) shall be assumed to have occurred on the first day of the Test Period, (5) the Consolidated Fixed Charges attributable to interest on any Indebtedness or dividends on any Disqualified Capital Stock bearing a floating interest (or dividend) rate shall be computed on a pro forma basis as if the average rate in effect from the beginning of the Test Period to the Transaction Date had been the applicable rate for the entire period, unless Company or any of its Subsidiaries is a party to a Hedge Agreement (which shall remain in effect for the 12-month period immediately following the Transaction Date) that has the effect of fixing the interest rate on the date of computation, in which case such rate (whether higher or lower) shall be used, and (6) amounts attributable to operations or businesses permanently discontinued or disposed of prior to the Transaction Date, shall be excluded, except, in the case of a determination of Consolidated Fixed Charges, only to the extent that the obligations giving rise to such Consolidated Fixed Charges would no longer be obligations contributing to Consolidated Fixed Charges subsequent to the Transaction Date.

 

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“Consolidated Current Assets” means, as at any date of determination, the total assets of Company and its Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding Cash and Cash Equivalents.

 

“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of Company and its Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding the current portion of long term debt.

 

Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal to: (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working Capital Adjustment, minus (ii) the sum, without duplication, of the amounts for such period of (a) voluntary and scheduled repayments of Consolidated Total Debt (excluding voluntary repayments financed with Indebtedness), (b) cash Consolidated Capital Expenditures (net of any proceeds of (y) any related financings with respect to such expenditures and (z) to the extent not excluded in the calculation of Consolidated Capital Expenditures, any sales of capital assets used to finance such expenditures), (c) Consolidated Interest Expense paid in cash for such period, (d) the portion of taxes based on income actually paid in cash during such period by Company or any of its Subsidiaries whether for such period or any other period, (e) Restricted Payments made under Sections 6.5(c)(ii)-(iv) during such period, (f) Restricted Payments or Investments made under Section 6.5(d)(i), Section 6.5(f), Section 6.7(l) and Section 6.7(m), as applicable, and which are for any Fiscal Year, declared (in the case of dividends or distributions) or paid in cash from June 1 of the applicable Fiscal Year to and including May 31 of the immediately following Fiscal Year, (g) Restricted Payments made to Holdings pursuant to Section 6.5(c)(i) for the purpose of paying fees, expenses and other transaction costs paid in cash during such period in connection with the transactions contemplated by the Second Amendment, the First Amendment to Revolving Credit Facility and the Qualifying IPO and (h) fees, expenses and other transaction costs paid in cash by Company and its Subsidiaries during such period in connection with the transactions contemplated by the First Amendment to Revolving Credit Facility, the Second Amendment and the Qualifying IPO.  Consolidated Excess Cash Flow shall not be reduced by the amount of any Permitted Loan Purchase.

 

Consolidated Fixed Charges means, for any period, the sum, without duplication, of the amounts determined for Company and its Subsidiaries on a consolidated basis equal to (i) Consolidated Interest Expense for such period, (ii) scheduled payments for such period of principal on Consolidated Total Debt, (iii) Consolidated Capital Expenditures for such period other than those financed with secured Indebtedness permitted by Sections 6.1 and 6.2 or made or incurred pursuant to Section 6.8(b)(ii) of the Revolving Credit Facility, (iv) the portion of taxes based on income actually paid in cash during such period by Company or any of its Subsidiaries whether for such period or any other period and (v) Restricted Payments permitted under Section 6.5(c)(iii) and which are paid in cash during such period.

 

Consolidated Interest Expense means, for any period, (i) total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) payable in cash of Company and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Subsidiaries, including all commissions,

 

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discounts and other fees and charges owed with respect to letters of credit and net costs under Interest Rate Agreements, but excluding, however, any amounts referred to in Section 2.10(d) payable on or before the Closing Date and amounts with respect to the termination of Interest Rate Agreements entered into within 90 days of the Closing Date, minus (ii) the aggregate amount of interest income of Company and its Subsidiaries during such period paid in cash.

 

Consolidated Net Income means, for any period, (i) the net income (or loss) of Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary of Company) in which any other Person (other than Company or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Company or any of its Subsidiaries by such Person during such period, (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Company or is merged into or consolidated with Company or any of its Subsidiaries or that Person’s assets are acquired by Company or any of its Subsidiaries, (c) the income of any Subsidiary of Company to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (d) any after-tax gains or losses attributable to Asset Sales or returned surplus assets of any Pension Plan, and (e) (to the extent not included in clauses (a) through (d) above) any net extraordinary gains or net extraordinary losses.  Consolidated Net Income shall not be increased as a result of any discount realized as a result of any Permitted Loan Purchase.

 

“Consolidated Secured Debt” means, as at any date of determination, the Consolidated Total Debt of Company and its Subsidiaries determined on a consolidated basis (and without duplication) in accordance with GAAP that is secured by Liens on any of the assets of the Company or any of its Subsidiaries.

 

Consolidated Total Debt means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP; provided, that the amount of revolving Indebtedness to be included at the date of determination shall be equal to the average of the balances of such revolving Indebtedness as of the end of each of the prior four calendar quarters (except that with respect to the first four calendar quarters after the Closing Date, the amount of revolving Indebtedness to be included shall be based on the average of the quarter end balances from the Closing Date through the date of determination).

 

“Consolidated Working Capital” means, as at any date of determination, the excess of Consolidated Current Assets over Consolidated Current Liabilities.

 

“Consolidated Working Capital Adjustment” means, for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period.

 

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Contractual Obligation means, as applied to any Person, any provision of any indenture, mortgage, deed of trust, or other contract, undertaking, agreement or other instrument to which that Person is a party or to which such Person or any of its properties is subject.

 

Contributing Guarantors has the meaning assigned to that term in Section 7.2.

 

Conversion/Continuation Date means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice.

 

Conversion/Continuation Notice means a Conversion/Continuation Notice substantially in the form of Exhibit A-2.

 

Counterpart Agreement means a Counterpart Agreement substantially in the form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

 

Credit Date means the date of a Credit Extension.

 

Credit Document means any of this Agreement, the Notes, if any, the Collateral Documents, and all other documents, instruments or agreements executed and delivered by a Credit Party for the benefit of any Agent or any Lender in connection herewith.

 

Credit Extension means the making of a Loan.

 

Credit Party means each Person (other than any Agent or any Lender or any other representative thereof) from time to time party to a Credit Document.

 

Cumulative Interest Expense  means the aggregate amount (without duplication and determined in each case in accordance with GAAP) of (A) interest expensed or capitalized, paid, accrued, or scheduled to be paid or accrued (including, in accordance with the following sentence, interest attributable to Capital Leases and Attributable Indebtedness) of the Company and its Subsidiaries during such period, including (I) amortization of debt issuance costs, original issue discount, debt discounts or premium and other financing fees and expenses and non-cash interest payments or accruals on any Indebtedness, (II) the interest portion of all deferred payment obligations of the Company and its Subsidiaries, and (III) all commissions, discounts and other fees and charges owed by the Company and its Subsidiaries with respect to bankers’ acceptances and letters of credit financings and Hedge Agreements, in each case to the extent attributable to such period, and (B) the amount of all cash dividends paid by the Company or any of its Subsidiaries in respect of preferred stock (other than by Subsidiaries of the Company to the Company or its wholly owned Subsidiaries).

 

Currency Agreement means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with Holdings’ and its Subsidiaries’ operations and not for speculative purposes.

 

DD Finance has the meaning assigned to that term in the preamble.

 

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Declining Lenderhas the meaning assigned to that term in Section 2.14(d).

 

Default means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

 

Deposit Account” means each checking or other demand deposit account maintained by any of the Credit Parties other than any Excluded Deposit Accounts.  All funds in each Deposit Account shall be conclusively presumed to be Collateral and proceeds of Collateral and the Agents and the Lenders shall have no duty to inquire as to the source of the amounts on deposit in any Deposit Account.

 

Disqualified Capital Stock means with respect to any Person, (a) Capital Stock of such Person that, by its terms or by the terms of any security into which it is convertible, exercisable or exchangeable, is, or upon the happening of an event or the passage of time or both would be, required to be redeemed or repurchased including at the option of the holder thereof by such Person or any of its Subsidiaries, in whole or in part, on or prior to 91 days following the Additional Term Loan Maturity Date and (b) any Capital Stock of any Subsidiary of such Person other than any common equity with no preferences, privileges, and no redemption or repayment provisions.  Notwithstanding the foregoing, any Capital Stock of the Company that would constitute Disqualified Capital Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Capital Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions prior to the prepayment of the Loans as are required by this Agreement.

 

Documentation Agent has the meaning assigned to that term in the preamble hereto.

 

Dollars and the sign “$” mean the lawful money of the United States of America.

 

Domestic Subsidiary means any Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia.

 

Eligible Assignee means (i) any Lender, any Affiliate of any Lender and any Related Fund (any two or more Related Funds being treated as a single Eligible Assignee for all purposes hereof), and Sponsor and any fund or account affiliated with Sponsor (provided that, none of the Ares Limited Partnership, the Limited Partnerships, and to the extent holding any Capital Stock in Holdings, any other Ares Group Investor or Aurora Group Investor, shall be deemed to be a “Lender” for purposes of voting on any matters (including the granting of any consents or waivers) with respect to any of the Credit Documents) and (ii) any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans as one of its businesses; provided, no Affiliate of Holdings (other than any existing Lender, Affiliate of such Lender, Sponsor or any fund or account affiliated with Sponsor) shall be an Eligible Assignee.  Notwithstanding anything to the contrary in the foregoing, the Borrower shall be an Eligible Assignee when Loans are assigned pursuant to a Permitted Loan Purchase.

 

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Employee Benefit Plan means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by, Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates.

 

Environmental Claim means any investigation, written notice, written notice of violation, written claim, action, suit, proceeding, demand, abatement order or other written order or written directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

 

Environmental Laws means any and all current or future foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters, including those relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, land use or the protection of the environment, in any manner applicable to Holdings or any of its Subsidiaries or any Facility.

 

ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

 

ERISA Affiliate means, as applied to any Person on or after the date of the closing of the transactions contemplated by the Purchase Agreement, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member.

 

ERISA Event means (i) a “reportable event” within the meaning of Section 4043(c) of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to Holdings, any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan; (vi) the imposition, or the

 

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occurrence of any events or condition that could reasonably be expected to result in the imposition, of liability on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the occurrence of an act or omission which could give rise to the imposition on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan (which fines, penalties, taxes or related charges, for purposes of Section 4.18, shall be material); (viii) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan or the assets thereof, or against Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

 

Eurodollar Rate Loan means a Loan bearing interest at a rate determined by reference to the Adjusted Eurodollar Rate.

 

Event of Default means each of the conditions or events set forth in Section 8.1.

 

Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

 

Excluded Deposit Accounts” means, collectively, (a) Deposit Accounts established solely for the purpose of funding payroll and trust accounts and funded solely with amounts necessary to cover then outstanding payroll liabilities and amounts required to be retained in such trust accounts, as well as minimum balance requirements; (b) Deposit Accounts with amounts on deposit that, when aggregated with the amounts on deposit in all other Deposit Accounts for which a Control Agreement has not been obtained (other than those specified in clause (a) and (c)), do not at any time exceed $4,000,000; (c) Deposit Accounts, with amounts on deposit which in the aggregate that do not at any time exceed $1,000,000, held at a financial institution that is not, for United Stated federal income tax purposes (i) an individual who is a citizen or resident of the United States or (ii) a corporation, partnership or other entity treated as a corporation or partnership created or organized in or under the laws of the United States, or any political subdivision thereof; (d) zero balance disbursement accounts; and (e) Deposit Accounts, with amounts on deposit which in the aggregate do not at any time exceed $500,000, the sole proceeds of which are funds received by a Loan Party from credit card sales; provided that, in each of the foregoing cases, if reasonably requested by the Collateral Agent or the Administrative Agent, the Borrower shall provide such Agent with periodic updates of the account numbers and names of all financial institutions where such Deposit Accounts are maintained.

 

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Existing Credit Agreement” means the Amended and Restated Credit and Guaranty Agreement dated as of December 16, 2004, by and among Holdings, the Borrower, certain subsidiaries of the Borrower as guarantors and Credit Suisse as administrative agent, as previously amended, restated, amended and restated, supplemental or modified prior to the Closing Date.

 

Facility means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Holdings or any of its Subsidiaries or any of their respective predecessors or Affiliates.

 

Fair Share has the meaning assigned to that term in Section 7.2.

 

Fair Share Contribution Amount has the meaning assigned to that term in Section 7.2.

 

Federal Funds Effective Rate means for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent, in its capacity as a Lender, on such day on such transactions as determined by Administrative Agent.

 

Financial Plan has the meaning assigned to that term in Section 5.1(i).

 

First Amendment means Amendment No. 1 to this Agreement dated as of December 19, 2008.

 

First Amendment to Revolving Credit Facility means Amendment No. 1 to Revolving Credit Facility, dated as of April 16, 2010 among Holdings, the Company, Fisher, DD Finance and the lenders party thereto.

 

First Offerhas the meaning assigned to that term in Section 2.14(d).

 

First Priority means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien to which such Collateral is subject, other than any Permitted Lien.

 

Fiscal Quarter means a fiscal quarter of any Fiscal Year.

 

Fiscal Year means the fiscal year of Holdings and its Subsidiaries ending on December 31 of each calendar year.

 

Fisher” has the meaning assigned to that term in the preamble.

 

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Fixed Charge Coverage Compliance Certificate means a Compliance Certificate substantially in the form of Exhibit M.

 

Fixed Charge Coverage Ratio means the ratio of (a) the aggregate amount of Consolidated Adjusted EBITDA for the Test Period to (b) the aggregate Consolidated Fixed Charges during the Test Period.

 

Flood Hazard Property means any Real Estate Asset subject to a mortgage in favor of Collateral Agent, for the benefit of the Lenders, and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

 

Foreign Subsidiary means any Subsidiary that is not a Domestic Subsidiary.

 

Funding Guarantors has the meaning assigned to that term in Section 7.2.

 

Funding Notice means a notice substantially in the form of Exhibit A-1.

 

GAAP means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect as of the date of determination thereof.

 

Governmental Authority means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

 

Governmental Authorization means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

 

Grantor has the meaning assigned to that term in the Pledge and Security Agreement.

 

Guaranteed Obligations has the meaning assigned to that term in Section 7.1.

 

Guarantor means each of (i) Holdings, and (ii) each Guarantor Subsidiary from time to time party to this Agreement.

 

Guarantor Subsidiary means  (i) Fisher, (ii)  DD Finance, (iii) each Domestic Subsidiary of Holdings (other than Borrower), and (iv) to the extent no adverse tax consequences to Company would result therefrom, each Foreign Subsidiary of Holdings.

 

Guaranty means the guaranty of each Guarantor set forth in Section 7.

 

Hazardous Materials means any chemical, material, waste or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority.

 

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Hazardous Materials Activity means any past, current or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, presence, Release, threatened Release, discharge, placement, generation, transportation, processing, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

 

Hedge Agreement means an Interest Rate Agreement or a Currency Agreement entered into with a Lender Counterparty.

 

Highest Lawful Rate means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.

 

Holdings has the meaning assigned to that term in the preamble hereto.

 

Holdings Equity Proceeds” means the proceeds of any sale of Capital Stock (other than Disqualified Capital Stock) of Holdings following the Second Amendment Effective Date (and excluding any proceeds of the Qualifying IPO), in each case, only to the extent that (i) such proceeds are held by Holdings in the form of cash or Cash Equivalents, (ii) such proceeds are not contributed  by Holdings to the Company or any Subsidiary and (iii) the Restricted Payment Amount is not increased in respect of such proceeds.

 

Increased-Cost Lenders has the meaning assigned to that term in Section 2.22.

 

Indebtedness as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money; (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money (excluding accounts payable which are classified as current liabilities in accordance with GAAP and accrued expenses in each case incurred in the ordinary course of business); (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA or with respect to earn-outs incurred and paid when due in connection with Permitted Acquisitions), which purchase price is due more than six months from the date of incurrence of the obligation in respect thereof; (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another; (viii) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss

 

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in respect thereof; (ix) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or any security therefore, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof is as described in clause (viii) above; (x) all net payment obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including, without limitation, any Interest Rate Agreement and Currency Agreement, whether entered into for hedging or speculative purposes; (xi) the principal balance outstanding under any synthetic lease, tax retention lease, off-balance sheet loan or similar off-balance sheet financing product; and (xii) the indebtedness of any partnership or Joint Venture in which such Person is a general partner or a joint venturer except to the extent that the terms of such indebtedness provide that such indebtedness is nonrecourse to such Person.

 

Indemnified Liabilities has the meaning assigned to that term in Section 10.3(a).

 

Indemnitee has the meaning assigned to that term in Section 10.3(a).

 

Installment has the meaning assigned to that term in Section 2.11.

 

Intellectual Property” means all patents, trademarks, service marks, tradenames, domain names, trade secrets, copyrights, technology, know-how and processes used in or necessary for the conduct of the business of Company and its Subsidiaries.

 

“Intercreditor Agreement” shall mean the Intercreditor Agreement in the form of Exhibit L.

 

Interest Payment Date means with respect to (i) any Base Rate Loan, the last Business Day in each of March, June, September and December of each year through the final maturity date of such Loan; and (ii) any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; provided, in the case of each Interest Period of longer than three months “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period.

 

Interest Period means, in connection with a Eurodollar Rate Loan, an interest period of one-, two-, three- or six-months, as selected by Borrower in the applicable Funding Notice or Conversion/Continuation Notice, (i) initially, commencing on the Credit Date or Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided, (a) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c), of this definition, end on the last Business Day of a

 

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calendar month; (c) no Interest Period with respect to any portion of any Term Loan (other than any Additional Term Loan) shall extend beyond the Maturity Date and (d) no Interest Period with respect to any portion of any Additional Term Loan shall extend beyond the Additional Term Loan Maturity Date.

 

Interest Rate Agreement means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is for the purpose of hedging the interest rate exposure associated with Holdings’ and its Subsidiaries’ operations and not for speculative purposes.

 

Interest Rate Determination Date means, with respect to any Interest Period, the date that is two (2) Business Days prior to the first day of such Interest Period.

 

Internal Revenue Code means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

Investment means (i) any direct or indirect purchase or other acquisition by Holdings or any of its Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (including any Subsidiary of Holdings); (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any Subsidiary of Holdings from any Person other than Company or any Guarantor Subsidiary, of any Capital Stock of such Subsidiary; and (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by Holdings or any of its Subsidiaries to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto minus the amount of any return of capital with respect to such Investment, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.

 

Investment Conditions” means (i) the Consolidated Coverage Ratio is not less than 2.0 to 1.0 and (ii) the Leverage Ratio is not greater than 5.0 to 1.0.

 

Joint Venture means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided, in no event shall any corporate Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.

 

Lender has the meaning assigned to that term in the preamble hereto, and shall include any other Person that becomes a party hereto pursuant to an Assignment Agreement or the Term Loan Joinder Agreement.

 

Lender Counterparty means each Lender or any Affiliate of a Lender counterparty to a Hedge Agreement (including any Person who is a Lender (and any Affiliate thereof) as of the Closing Date but subsequently, whether before or after entering into a Hedge Agreement, ceases to be a Lender).

 

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Leverage Ratio means the ratio as of the date of determination of (i) Consolidated Total Debt, less unrestricted Cash and Cash Equivalents of Company and its Subsidiaries as of such day in excess of $1,000,000, the contents of which are in a Blocked Account, to (ii) Consolidated Adjusted EBITDA for the Test Period most recently ended.

 

Lien means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

 

Loan means a Term Loan.

 

“Loan Purchase Limit” means (a) prior to the date that the Borrower delivers to Administrative Agent a written certification of its Net Cash Balance as of December 31, 2008 in form reasonably satisfactory to Administrative Agent, $45,200,000, and (b) after such date, the sum of the Net Cash Balance as of December 31, 2008 plus the aggregate principal balance of all Loans purchased prior to such date pursuant to Permitted Loan Purchases plus 50% of accrued Consolidated Excess Cash Flow for Fiscal Year 2009.

 

Management Services Agreement means the Amended and Restated Management Services Agreement dated April 12, 2004 between Holdings and Sponsor, as it may be amended, supplemented or otherwise modified from time to time.

 

Margin Stock has the meaning assigned to that term in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

 

Material Adverse Effect means a material adverse effect upon (i) the business, operations, properties, assets or condition (financial or otherwise) of Holdings and its Subsidiaries taken as a whole; (ii) the ability of any Credit Party to perform its Obligations; (iii) the legality, validity, binding effect or enforceability against a Credit Party of a Credit Document to which it is a party; or (iv) the rights, remedies and benefits available to, or conferred upon, any Agent and any Lender or any Secured Party under any Credit Document.

 

Maturity Date” means May 21, 2013.

 

Maximum Restricted Payment Amount” means, for any four Fiscal Quarter period, (1) $24,000,000, if Consolidated Adjusted EBITDA is greater than or equal to $30,000,000 and less than or equal to $40,000,000 for the Test Period, (2) $12,000,000, if Consolidated Adjusted EBITDA is greater than or equal to $27,000,000 but less than $30,000,000 for the Test Period, (3) $8,000,000, if Consolidated Adjusted EBITDA is greater than or equal to $25,000,000 but less than $27,000,000 for the Test Period, and (4) $0, if Consolidated Adjusted EBITDA is less than $25,000,000 for the Test Period.

 

Moody’s means Moody’s Investor Services, Inc.

 

Mortgage means a Mortgage substantially in the form of Exhibit J, as it may be amended, supplemented or otherwise modified from time to time.

 

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Multiemployer Plan means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) or Section 4001(a)(3) of ERISA.

 

Net Asset Sale Proceeds means, with respect to any Asset Sale, an amount equal to: (i) Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received by Holdings or any of its Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs incurred in connection with such Asset Sale, including, without limitation, (a) income taxes estimated in good faith by the seller thereof to be payable by the seller as a result of any gain recognized in connection with such Asset Sale, (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale, (c) brokerage fees and legal expenses incurred directly attributable to such Asset Sale; and (d) any reserves required to be established by the seller thereof in accordance with GAAP against liabilities reasonably anticipated and directly attributable to the Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under indemnification obligations associated with such Asset Sale.

 

“Net Cash Balance” means, at any time, the (a) sum of all Cash and Cash Equivalents held by Credit Parties minus (b) the sum of the aggregate principal amount of loans outstanding under the Revolving Credit Facility plus the aggregate maximum amount which may be drawn under all letters of credit issued under the Revolving Credit Facility.

 

Net Insurance/Condemnation Proceeds means an amount equal to:  (i) any Cash payments or proceeds received by Holdings or any of its Subsidiaries (a) under any casualty insurance policy in respect of a covered loss thereunder or (b) as a result of the taking of any assets of Holdings or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) (a) any actual and reasonable costs incurred by Holdings or any of its Subsidiaries in connection with the adjustment or settlement of any claims of Holdings or such Subsidiary in respect thereof, and (b) any bona fide direct costs incurred in connection with any sale of such assets as referred to in clause (i)(b) of this definition, including income taxes estimated in good faith by the seller thereof to be payable as a result of any gain recognized in connection therewith.

 

Non-US Lender has the meaning assigned to that term in Section 2.19(c).

 

Note means a Term Loan Note.

 

Notice means a Funding Notice or a Conversion/Continuation Notice.

 

Obligations means all obligations of every nature of each Credit Party from time to time owed to the Agents (including former Agents), the Lenders or any of them, or to any Lender Counterparties, under any Credit Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit

 

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Party for such interest in the related bankruptcy proceeding), payments for fees, expenses, indemnification or otherwise.

 

Obligee Guarantor has the meaning assigned to that term in Section 7.7.

 

Organizational Documents means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended.  In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

 

PBGC means the Pension Benefit Guaranty Corporation or any successor thereto.

 

Pension Plan means any Employee Benefit Plan which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.

 

Perfection Deliverables” means, with respect to any Credit Party, or any Person that becomes a Credit Party pursuant to Section 5.10 and to the extent required to be delivered under such Section:

 

(i)                                     evidence satisfactory to Collateral Agent of the compliance by such Credit Party of its obligations under the Pledge and Security Agreement and the other Collateral Documents (including, without limitation, its obligations (A) to execute and deliver (x) UCC financing statements, (y) originals of securities, instruments and chattel paper and (z) any agreements governing deposit and/or securities accounts as provided therein, and (B) to file intellectual property security agreements with the United States Patent and Trademark Office and the United States Copyright Office);

 

(ii)          (A) to the extent required to be delivered by the Collateral Agent, the results of searches, by Persons satisfactory to Collateral Agent, of all effective UCC financing statements (or equivalent filings), fixture filings and all judgment and tax lien filings which may have been made with respect to any personal or mixed property of such Credit Party, and of filings with the United States Patent and Trademark Office and the United States Copyright Office, together with copies of all such filings disclosed by such searches, and (B) UCC termination statements (or similar documents), releases to be filed with the United States Patent and Trademark Office and the

 

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United States Copyright Office, and other filings duly executed by all applicable Persons for filing in all applicable jurisdictions and offices as may be necessary to terminate any effective UCC financing statements (or equivalent filings) and other filings disclosed in such searches (other than any such financing statements in respect of Permitted Liens);

 

(iii)       to the extent required to be delivered by the Collateral Agent, opinions of counsel (which counsel shall be reasonably satisfactory to Collateral Agent) with respect to the creation and perfection of the security interests in favor of Collateral Agent in the Collateral of such Credit Party and such other matters as Collateral Agent may reasonably request, in each case in form and substance reasonably satisfactory to Collateral Agent; and

 

(iv)      evidence that such Credit Party shall have taken or caused to be taken any other action, executed and delivered or caused to be executed and delivered any other agreement, document and instrument (including without limitation, any intercompany notes evidencing Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and made or caused to be made any other filing and recording (other than as set forth herein) reasonably required by Collateral Agent.

 

“Periodic Dividend Amount” means (x) $16,000,000 minus (y) the sum of the aggregate amount of Restricted Payments made pursuant to Section 6.5(d)(i) during the Fiscal Quarter in which the subject Restricted Payment is to be paid and the three Fiscal Quarters most recently ended.

 

Permitted Acquisition means any acquisition by Company or any of its wholly-owned Guarantor Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of, all of the Capital Stock of, or a business line or unit or a division of, any Person; provided, that: (i) immediately prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would result therefrom; (ii) all transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable laws and in conformity with all applicable Governmental Authorizations; (iii) in the case of the acquisition of Capital Stock, all of the Capital Stock (except for any such Securities in the nature of directors’ qualifying shares required pursuant to applicable law) acquired or otherwise issued by such Person or any newly formed Subsidiary of Company in connection with such acquisition shall be owned not less than 80% by Company or a Guarantor Subsidiary thereof, and Company shall have taken, or caused to be taken, each of the actions (and within the time periods) set forth in Sections 5.10 and/or 5.11, as applicable; (iv) any Person or assets or division as acquired in accordance herewith shall be in same business or lines of business in which Company and/or its Subsidiaries are engaged as of the Closing Date or any business reasonably related thereto; and (v) each such Permitted Acquisition shall be

 

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effectuated pursuant to the terms of a consensual merger or stock purchase agreement or other consensual acquisition agreement between the Company or the applicable Subsidiary and the applicable seller or Person being so acquired.

 

Permitted Liens means each of the Liens permitted pursuant to Section 6.2.

 

“Permitted Loan Purchase” means one or more purchases by the Borrower of Loans that are not yet due and owing to any Lender; provided that (i) each offer to purchase Loans shall be for a minimum principal amount of not less than $5,000,000 (although the Loans actually purchased pursuant to such offer may be less than $5,000,000 if less than that amount is submitted for sale by Lenders in response to such purchase offer), (ii) the aggregate principal amount of all such purchases shall not exceed the lesser of (x) $50,000,000 and (y) Loan Purchase Limit then in effect, (iii) all such purchases shall be consummated on or before December 31, 2009, (iv) such purchases shall be implemented pursuant to an offer in the form of Exhibit A attached to the First Amendment, which offer is made to all Lenders; provided that the initial Permitted Loan Purchase shall be implemented pursuant to an offer in the form of Exhibit B attached to the First Amendment, (v) the Borrower shall not borrow under the Revolving Credit Facility for the purpose of funding any such Permitted Loan Purchase and (vi) the Borrower and the assigning Lender(s) shall have executed and delivered to Administrative Agent an Assignment Agreement pursuant to Section 10.6(d).  Notwithstanding anything to the contrary in the foregoing, clauses (i) and (iv) of the preceding sentence will not apply with respect to Permitted Loan Purchases of up to $5,000,000 in aggregate principal amount purchased, provided such purchases otherwise meet the foregoing definition of a “Permitted Loan Purchase”.

 

Permitted Refinancing means, with respect to any Indebtedness, extensions, renewals, refinancings or replacements of such Indebtedness provided that such extensions, renewals, refinancings or replacements (i) are on terms and conditions (including the terms and conditions of any guarantees of or other credit support for such Indebtedness) not materially less favorable taken as a whole to Company and its Subsidiaries, the Agents or the Lenders than the terms and conditions of the Indebtedness being extended, renewed, refinanced or replaced, (ii) do not add as an obligor any Person that would not have been an obligor under the Indebtedness being extended, renewed replaced or refinanced, (iii) do not result in a greater principal amount or shorter remaining average life to maturity than the Indebtedness being extended, renewed replaced or refinanced and (iv) are not effected at any time when a Default or Event of Default has occurred and is continuing or would result therefrom.

 

Person means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

 

Phase I Report means, with respect to any Facility, a report that (i) conforms to the ASTM Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, E 1527, (ii) was conducted no more than six months prior to the date such report is required to be delivered hereunder, by one or more environmental consulting firms

 

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reasonably satisfactory to Administrative Agent, (iii) includes an assessment of asbestos-containing materials at such Facility, (iv) is accompanied by (a) an estimate of the reasonable worst-case cost of investigating and remediating any Hazardous Materials Activity identified in the Phase I Report as giving rise to an actual or potential material violation of any Environmental Law or as presenting a material risk of giving rise to a material Environmental Claim, and (b) a current compliance audit setting forth an assessment of Holdings’, its Subsidiaries’ and such Facility’s current and past compliance with Environmental Laws and an estimate of the cost of rectifying any non-compliance with current Environmental Laws identified therein and the cost of compliance with reasonably anticipated future Environmental Laws identified therein.

 

Pledge and Security Agreement means the Pledge and Security Agreement dated as of the Closing Date by Borrower and each Guarantor, substantially in the form of Exhibit I, as it may be amended, supplemented or otherwise modified from time to time.

 

Prepayment Amounthas the meaning assigned to that term in Section 2.14(d).

 

Prime Rate means the rate of interest per annum announced from time to time by Credit Suisse as its prime commercial lending rate in effect at its principal office in New York City.  The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.  Credit Suisse or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

 

Principal Office means, Administrative Agent’s “Principal Office” as set forth on Appendix B, or such other office as Administrative Agent may from time to time designate in writing to Borrower and each Lender.

 

Projections has the meaning assigned to that term in Section 4.8.

 

Pro Rata Share means: with respect to all payments, computations and other matters relating to the Term Loans of any Lender, the percentage obtained by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term Loan Exposure of all Lenders.  For all other purposes with respect to each Lender, “Pro Rata Share” means the percentage obtained by dividing (A) an amount equal to the sum of the Term Loan Exposure of that Lender, by (B) an amount equal to the sum of the aggregate Term Loan Exposure of all Lenders.

 

Qualifying IPOmeans the consummation of the first underwritten public offering of the Capital Stock (other than Disqualified Capital Stock) of Holdings following the Closing Date pursuant to a registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act.

 

Qualifying IPO Paymentmeans, concurrent with the closing of a Qualifying IPO, the one-time payment to Sponsor in connection with the termination of the Management Services Agreement in an aggregate amount not to exceed $6,000,000.

 

Qualifying Preferred Stock Redemptionmeans, concurrent with the closing of a Qualifying IPO, the payment of $1,000 to Aurora Equity Partners II L.P. and $1,000 to Ares Limited Partnership in respect of the redemption of the one share of Series B Preferred Stock and

 

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Series C Preferred Stock held by Aurora Equity Partners II L.P. and the Ares Limited Partnership, respectively.

 

Qualifying Senior Notes Redemptionmeans, concurrent with the closing of a Qualifying IPO, the Borrower and DD Finance (i) have given irrevocable and unconditional notice of redemption for all of the outstanding Senior Notes, (ii) have timely and irrevocably deposited or caused to be deposited with the trustee under the Senior Notes Indenture proceeds of a Qualifying IPO, proceeds of Additional Term Loans, Cash and/or proceeds of Revolving Loans (as defined in the Revolving Credit Facility) sufficient to pay and discharge the entire indebtedness (including all principal, premium, if any, and accrued interest) on all outstanding Senior Notes and (iii) have satisfied all other conditions precedent to the discharge of the Senior Notes Indenture set forth in Section 8.8 of the Senior Notes Indenture.

 

Real Estate Asset means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Credit Party in any real property.

 

Real Estate Asset Deliverables” means, with respect to any Real Estate Asset acquired by any Credit Party, or held by any Person that becomes a Credit Party, and to the extent required to be delivered pursuant to Section 5.11:

 

(i)             fully executed and notarized Mortgages, in proper form for recording in all appropriate places in all applicable jurisdictions, encumbering such Real Estate Asset;

 

(ii)          at the request of the Collateral Agent, an opinion of counsel (which counsel shall be reasonably satisfactory to Collateral Agent) in each state in which such Real Estate Asset is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state and such other matters as Collateral Agent may reasonably request, in each case in form and substance reasonably satisfactory to Collateral Agent;

 

(iii)       at the request of the Collateral Agent, (a) ALTA mortgagee title insurance policies or unconditional commitments therefore issued by one or more title companies reasonably satisfactory to Collateral Agent with respect to such Real Estate Asset, in amounts satisfactory to the Collateral Agent with respect to such Real Estate Asset, together with a title report issued by a title company with respect thereto (each, a “Title Policy”) and dated as of a recent date prior to the date which such Real Estate Asset is acquired or such Person becomes a Credit Party, as the case may be, and copies of all recorded documents listed as exceptions to title or otherwise referred to therein, each in form and substance reasonably satisfactory to Collateral Agent and (b) evidence satisfactory to Collateral Agent that such Credit Party has paid to

 

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the title company or to the appropriate governmental authorities all expenses and premiums of the title company and all other sums required in connection with the issuance of each Title Policy and all recording and stamp taxes (including mortgage recording and intangible taxes) payable in connection with recording the Mortgages for such Real Estate Asset in the appropriate real estate records;

 

(iv)      evidence of flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors of the Federal Reserve System, in form and substance reasonably satisfactory to Collateral Agent; and

 

(v)         at the request of the Collateral Agent, ALTA surveys of such Real Estate Asset, certified to Collateral Agent and dated as of a recent date which such Real Estate Asset is acquired or such Person becomes a Credit Party, as the case may be.

 

Register has the meaning assigned to that term in Section 2.6(b).

 

Regulation D means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

Related Fund means, with respect to any Lender that is an investment fund, any other investment fund or similar investment vehicle that invests in commercial loans and that is managed or advised by (i) the Lender, (ii) an Affiliate of Lender or (iii) the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

Related Lender Assignment has the meaning assigned to that term in Section 10.6(c).

 

Release means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

 

Replacement Lender has the meaning assigned to that term in Section 2.22.

 

Requisite Lenders means one or more Lenders having or holding Term Loan Exposure and representing more than 50% of the sum of the aggregate Term Loan Exposure of all Lenders.

 

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Restricted Payment means (i) any dividend or other distribution (including, for the avoidance of doubt, any payment pursuant to Section 6.5(d)), direct or indirect, on account of any shares of any class of stock (or of any other Capital Stock) of Holdings or Company now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock (or of any other Capital Stock) of Holdings or Company now or hereafter outstanding; (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock (or of any other Capital Stock) of Holdings or Company now or hereafter outstanding; (iv) management or similar fees payable to Sponsor or any of its Affiliates; and (v) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, any Indebtedness permitted pursuant to Sections 6.1(b), 6.1(e) (in respect of Indebtedness incurred under Sections 6.1(b), 6.1(k) (to the extent constituting subordinated Indebtedness) or 6.1(m)), 6.1(k) (to the extent constituting subordinated Indebtedness) or 6.1(m).  Notwithstanding anything to the contrary contained herein, (i) the redemption of the Senior Notes pursuant to the Qualifying Senior Notes Redemption shall not be treated as a Restricted Payment for any purpose hereunder, (ii) the Qualifying IPO Payment shall not be treated as a Restricted Payment for any purpose hereunder, and (iii) the redemption by Holdings of any preferred stock of Holdings pursuant to a Qualifying Preferred Stock Redemption shall not be treated as a Restricted Payment for any purpose hereunder.

 

Restricted Payment Amount means, as of any date of determination, an amount set forth on the Restricted Payment Certificate delivered to the Administrative Agent no later than 10:00 a.m. (New York City time) at least three (3) Business Days in advance of the payment date of the transaction giving rise to a determination of the Restricted Payment Amount (which can be less than zero), equal to (a) the difference (but not less than zero) between (i) Restricted Payment EBITDA and (ii) the product of 2.0 multiplied by Cumulative Interest Expense (determined, in each case, for the period commencing on the first day of the first full Fiscal Quarter after the Closing Date through and including the last full Fiscal Quarter (taken as one accounting period) preceding such date of determination), plus (b) 100% of  the aggregate net cash proceeds received by the Company from a capital contribution or sale of Capital Stock to Holdings after the Closing Date, plus (c) except in each case, in order to avoid duplication, to the extent any such payment or proceeds have been included in the calculation of Restricted Payment EBITDA, an amount equal to the net amounts received in respect of Investments made under Section 6.7(l) or 6.7(m) in any Person resulting from cash distributions on or cash repayments of any Investments, including payments of interest on Indebtedness, dividends, repayments of loans or advances, or other distributions or other transfers of assets, in each case to Company, DD Finance, Fisher or any of their respective Subsidiaries or from the net cash proceeds from the sale of any such Investment, not to exceed, in each case, the amount of Investments previously made by Company, DD Finance, Fisher or any of their respective Subsidiaries in such Person, less the cost of disposition (and excluding Investments in Subsidiaries), minus (d) the sum of (i) the aggregate amount of Restricted Payments made pursuant to Sections 6.5(a)(ii) (other than to the Company or a wholly-owned Subsidiary Guarantor) and 6.5(c)(iv); and (ii) (without duplication) amounts applied or utilized pursuant to Section 6.5(d)(i), Section 6.5(f), Section 6.7(l) or Section 6.7(m) or Section 6.16(d).  For

 

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purposes of this definition, (i) the amount of any payment or Investment made or returned hereunder, if other than in cash, shall be the fair market value thereof, as determined in the good faith reasonable judgment of the board of directors of the Company (or similar governing body) for such payments or Investments with a value in excess of $1.0 million, and otherwise by an executive officer of the Company at the time made or returned, as applicable, (ii) interest with respect to Capital Leases shall be deemed to accrue at an interest rate reasonably determined in good faith by the Company to be the rate of interest implicit in such Capital Lease in accordance with GAAP and (iii) interest expense attributable to any Indebtedness represented by the guarantee by the Company or any of its Subsidiaries of an obligation of another Person shall be deemed to be the interest expense attributable to the Indebtedness guaranteed.   Notwithstanding anything to the contrary contained herein, (i) the redemption of the Senior Notes pursuant to the Qualifying Senior Notes Redemption shall not reduce the Restricted Payment Amount for any purpose hereunder, (ii) the Qualifying IPO Payment shall not reduce the Restricted Payment Amount for any purpose hereunder, (iii) the proceeds of a Qualifying IPO shall not increase the Restricted Payment Amount for any purpose hereunder, and (iv) the redemption of preferred stock of Holdings pursuant to the Qualifying Preferred Stock Redemption shall not reduce the Restricted Payment Amount for any purpose hereunder.

 

Restricted Payment Certificate” means a Restricted Payment Certificate substantially in the form of Exhibit K.

 

Restricted Payment EBITDA” means, for any period and without duplication, (a) Consolidated Adjusted EBITDA for such period, plus (b) the sum of each of the following to the extent deducted in the calculation of Consolidated Net Income for such period, (i) all losses which are non-recurring, (ii) interest attributable to Attributable Indebtedness, and (iii) the amount of all dividends accrued or payable (whether or not in cash) by the Company or any of its Subsidiaries in respect of preferred stock (other than (A) dividends on Capital Stock (other than Disqualified Capital Stock) of the Company or such Subsidiary payable solely in Capital Stock (other than Disqualified Capital Stock) of the Company or such Subsidiary, as applicable, and (B) dividends by Subsidiaries of the Company to the Company or its wholly-owned Subsidiaries), plus (c) the aggregate amount of interest income of the Company and its Subsidiaries during such period paid in cash to the extent reducing Consolidated Adjusted EBITDA minus (d) all gains which are non-recurring (including any gain from the issuance or sale of any Capital Stock) to the extent included in the calculation of Consolidated Net Income for such period.

 

Revolving Credit Document” all documents, instruments or agreements executed and delivered by Holdings or any of its subsidiaries for the benefit of any agent or lender in connection with the Revolving Credit Facility.

 

Revolving Credit Facility” means the $60.0 million senior secured revolving credit facility pursuant to the revolving credit agreement dated as of the Closing Date among Holdings, the Company, Fisher, DD Finance, the lenders party thereto, Credit Suisse as administrative agent and JPMorgan Chase Bank, N.A., as collateral agent, as it may be amended, modified, refinanced or replaced from time to time, including amendments increasing the principal amount of revolving loans available thereunder.

 

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RP Conditions” means (i) the sum of (x) the aggregate amount of Cash of the Borrower in Deposit Accounts subject to a Blocked Account Agreement and (y) Excess Availability (as defined in the Revolving Credit Facility) is at least $12,000,000; provided, that Excess Availability will be calculated without giving effect to any Cash, and (ii) the Leverage Ratio is less than 6.0 to 1.0.

 

S&P means Standard & Poor’s Ratings Group, a division of The McGraw Hill Corporation.

 

Second Amendment” means Amendment No. 2 to Credit and Guaranty Agreement, dated as of April 16, 2010, among the Company and the Lenders party thereto.

 

Second Amendment Effective Date” means the date on which the Second Amendment became effective in accordance with its terms.

 

Second Offerhas the meaning assigned to that term in Section 2.14(d).

 

Second Priority means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien to which such Collateral is subject, other than any Permitted Lien.

 

“Secured Debt Ratio” means the ratio as of the date of determination of (i) Consolidated Secured Debt, less unrestricted Cash and Cash Equivalents of the Company and its Subsidiaries in excess of $1,000,000, the contents of which are in a Blocked Account, as of such date, to (ii) Consolidated Adjusted EBITDA for the Test Period most recently ended.

 

Secured Parties has the meaning assigned to that term in the Pledge and Security Agreement.

 

“Section 6.5(d) Certificate” means a certificate of an Authorized Officer (i) certifying that the conditions to the making of a Restricted Payment set forth in Section 6.5(d)(i) have been satisfied and (ii) designating the portion of such Restricted Payment made in reliance upon (x) the Periodic Dividend Amount and (y) the Restricted Payment Amount.  Any such designation made pursuant to clause (ii) of the preceding sentence shall be permanent.

 

Securities means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

 

Securities Act means the Securities Act of 1933, as amended from time to time, and any successor statute.

 

Senior Notes means the Senior Notes issued pursuant to the Senior Notes Indenture.

 

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Senior Notes Indenture means that certain Indenture dated as of December 16, 2004, by and among the Company, DD Finance and U.S. Bank National Association, as Indenture Trustee, governing the Company’s 7 ¾% Senior Notes due 2012.

 

Solvency Certificate means a Solvency Certificate of the chief financial officer of Holdings and Borrower substantially in the form of Exhibit G.

 

Solvent means, with respect to any Person, that as of the date of determination both (A) (i) the then fair saleable value of the property of such Person is (y) greater than the total amount of liabilities (including contingent liabilities) of such Person and (z) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person; (ii) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (iii) such Person has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (B) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

Sponsor means, collectively, the Aurora Group Investors, the Ares Group Investors and the Affiliates (without giving effect to clause (i) of the last sentence of the definition of such term) of Aurora Management Partners LLC or Ares Management LLC.

 

Subject Transaction has the meaning assigned to that term in Section 6.8(c)(i).

 

Subsidiary means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.

 

Tax means, with respect to any Person, any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided, however, solely for purposes of Sections 2.18 and 2.19, the foregoing shall not include (a) taxes imposed on or measured by such Person’s overall net income (however denominated), and franchise taxes imposed on such Person (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such Person is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office

 

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is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which Company is located and (c) in the case of a Non-US Lender, any withholding tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party hereto (or designates a new lending office) or is attributable to such Lender’s failure (other than as a result of a Change in Law) to comply with Section 2.19(c), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from Company with respect to such withholding tax pursuant to Section 2.19(a) or Section 2.19(b).

 

Term Loan means, collectively, the Term Loans outstanding on the Second Amendment Effective Date (other than Additional Term Loans made pursuant to the Second Amendment) and the Additional Term Loans.

 

Term Loan Commitment means the commitment of a Lender to make or otherwise fund any Term Loan and “Term Loan Commitments means such commitments of all Lenders in the aggregate.

 

Term Loan Exposure means, with respect to any Lender as of any date of determination, the outstanding principal amount of the Term Loans of such Lender; provided, at any time prior to the making of the Additional Term Loans, the Term Loan Exposure of any Lender shall be equal to the principal amount of the Term Loans of such Lender outstanding on the Second Amendment Effective Date (other than Additional Term Loans) plus such Additional Lender’s Term Loan Commitment.

 

Term Loan Joinder Agreement” means the Term Loan Joinder Agreement,  dated as of the Second Amendment Effective Date, among the Company, the Administrative Agent and the Lenders party thereto.

 

Term Loan Note means a promissory note in the form of Exhibit B, as it may be amended, supplemented or otherwise modified from time to time.

 

Term Priority Collateral has the meaning assigned to that term in the Intercreditor Agreement.

 

Terminated Lender has the meaning assigned to that term in Section 2.22.

 

Test Period” means, at any time, the four Fiscal Quarters last ended (in each case taken as one accounting period) for which financial statements are required to have been delivered, pursuant to Section 5.1(b).

 

Title Policy has the meaning assigned to that term in the definition of “Real Estate Asset Deliverables.”

 

Type of Loan means a Base Rate Loan or a Eurodollar Rate Loan.

 

UCC means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

 

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1.2          Accounting Terms.  Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP.  Financial statements and other information required to be delivered by Holdings to Lenders pursuant to Section 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 5.1(e), if applicable).  Subject to the foregoing, calculations in connection with the definitions, covenants and other provisions hereof shall utilize accounting principles and policies in conformity with those used to prepare the most recent financial statements referred to in Section 4.7; provided that, solely for purposes of calculating the Restricted Payment Amount, the terms used in, or otherwise relating to, the definition of “Restricted Payment Amount” shall, except as otherwise expressly provided herein, have the meanings assigned to them in conformity with GAAP as in effect from time to time.

 

1.3          Interpretation, etc.  Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.  References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided.  The use herein of the word “include” or “including,” when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not no limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

 

SECTION 2.         LOANS

 

2.1          Term Loans.

 

(a)           Loan Commitments.  Subject to the terms and conditions hereof, (i) each Lender existing on the Closing Date made a Term Loan to the Company on the Closing Date, and (ii) each Additional Term Loan Lender has, pursuant to the Term Loan Joinder Agreement, severally agreed to make, on the Second Amendment Effective Date, an Additional Term Loan to the Company in an amount equal to such Lender’s Additional Term Loan Commitment as set forth in the Term Loan Joinder Agreement.  Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed.  Subject to Sections 2.11, 2.12 and 2.13, (i) all amounts owed hereunder with respect to the Term Loans (other than the Additional Term Loans) shall be paid in full no later than the Maturity Date and (ii) all amounts owed hereunder with respect to the Additional Term Loans shall be paid in full no later than the Additional Term Loan Maturity Date.  Each Lender’s Additional Term Loan Commitment shall terminate immediately and without further action on the Second Amendment Effective Date after giving effect to the funding of such Lender’s Additional Term Loan Commitment pursuant to the Term Loan Joinder Agreement on such date.

 

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(b)           Borrowing Mechanics for Term Loans.

 

(i)            In the case of Term Loans (other than Additional Term Loans), Company shall deliver to Administrative Agent a fully executed and delivered Funding Notice no later than 10:00 a.m. (New York City time) at least (x) three (3) Business Days in advance of the Closing Date in the case of a Eurodollar Rate Loan to be made on the Closing Date or (y) one (1) Business Day in advance of the Closing Date in the case of a Base Rate Loan to be made on the Closing Date.  Promptly upon receipt by Administrative Agent of such Funding Notice, Administrative Agent shall notify each Lender of the proposed borrowing.  In the case of Additional Term Loans, the borrowing procedures are set forth in the Term Loan Joinder Agreement.

 

(c)           In the case of Term Loans (other than Additional Term Loans) each Lender shall make its Term Loan available to Administrative Agent not later than 12:00 p.m. (New York City time) on the Closing Date by wire transfer of same day funds in Dollars, at Administrative Agent’s Principal Office.  Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of the Term Loans (other than Additional Term Loans) available to Company on the Closing Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Loans received by Administrative Agent from Lenders to be credited to the account of Company at Administrative Agent’s Principal Office or to such other account as may be designated in such Funding Notice.

 

2.2          [RESERVED]

 

2.3          [RESERVED]

 

2.4          Pro Rata Shares; Availability of Funds.

 

(a)           Pro Rata Shares.  All Loans shall be made, and all participations purchased, by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall any Term Loan Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby.

 

(b)           Availability of Funds.  Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan requested on such Credit Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Credit Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Borrower a corresponding amount on such Credit Date.  If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each

 

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day from such Credit Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three (3) Business Days and thereafter at the Base Rate.  If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify Borrower and Borrower shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the rate applicable to such Loan.  Nothing in this Section 2.4(b) shall be deemed to relieve any Lender from its obligation to fulfill its Term Loan Commitments hereunder or to prejudice any rights that Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

2.5          Use of Proceeds.  The proceeds of Term Loans drawn on the Closing Date shall be used to repay outstanding obligations under the Existing Credit Agreement and pay transaction expenses.  The proceeds of Additional Term Loans shall be used to repay outstanding Senior Notes.  No portion of the proceeds of any Credit Extension shall be used in any manner that causes or might cause such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation thereof or to violate the Exchange Act.

 

2.6          Evidence of Debt; Register; Lenders’ Books and Records; Notes.

 

(a)           Lenders’ Evidence of Debt.  Each Lender shall maintain on its internal records an account or accounts evidencing the Obligations of Borrower to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof.  Any such recordation shall be conclusive and binding on Borrower, absent manifest error; provided, that the failure to make any such recordation, or any error in such recordation, shall not affect any Borrower’s Obligations in respect of any applicable Loans; and provided further, in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern.

 

(b)           Register.  Administrative Agent shall maintain at its Principal Office a register for the recordation of the names and addresses of Lenders and Loans of each Lender from time to time (the Register).  In the case of a Related Lender Assignment described in Section 10.6(e) that is not reflected in the Register, the assigning Lender shall maintain a comparable register, which shall be made available for inspection by Administrative Agent at any reasonable time and from time to time upon reasonable prior notice to such Lender.  The Register shall be available for inspection by Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.  Administrative Agent shall record in the Register the Loans, and each repayment or prepayment in respect of the principal amount of the Loans, and any such recordation shall be conclusive and binding on Borrower and each Lender, absent manifest error; provided, failure to make any such recordation, or any error in such recordation, shall not affect Borrower’s Obligations in respect of any Loan.  Borrower hereby designates Credit Suisse to serve as Borrower’s agent solely for purposes of maintaining the Register as provided in this Section 2.6, and Borrower hereby agrees that, to

 

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the extent Credit Suisse serves in such capacity, Credit Suisse and its officers, directors, employees, agents and affiliates shall constitute “Indemnitees.”

 

(c)           Notes.  If so requested by any Lender by written notice to Borrower at least two (2) Business Days prior to the Closing Date, or at any time thereafter, Borrower shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 10.6, other than an assignee party to a Related Lender Assignment described in Section 10.6(e)) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after Borrower’s receipt of such notice) a Note or Notes to evidence such Lender’s Term Loan.

 

2.7          Interest on Loans.

 

(a)           Except as otherwise set forth herein, each Term Loan shall bear interest on the unpaid principal amount thereof from the date made through repayment (whether by acceleration or otherwise) thereof as follows:

 

(i)             if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or

 

(ii)          if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the Applicable Margin.

 

(b)           The basis for determining the rate of interest with respect to any Loan, and the Interest Period with respect to any Eurodollar Rate Loan, shall be selected by Borrower and notified to Administrative Agent and Lenders pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as the case may be.  If on any day a Loan is outstanding with respect to which a Conversion/Continuation Notice has not been delivered to Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then for that day such Loan shall be a Base Rate Loan.

 

(c)           In connection with Eurodollar Rate Loans there shall be no more than ten (10) Interest Periods outstanding at any time.  In the event Borrower fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a Eurodollar Rate Loan) will be automatically converted into a Base Rate Loan on the last day of the then-current Interest Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not then outstanding) will be made as, a Base Rate Loan).  In the event Borrower fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, Borrower shall be deemed to have selected an Interest Period of one month.  As soon as practicable after 10:00 a.m. (New York City time) on each Interest Rate Determination Date, Administrative Agent shall determine (which determination shall,

 

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absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Borrower and each Lender.

 

(d)           Interest payable pursuant to Section 2.7(a) shall be computed (i) in the case of Base Rate Loans at times when the Base Rate is based on the Prime Rate on the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, and Base Rate Loans at times when the Base Rate is based on the Federal Funds Effective Rate, on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues.  In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided, if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

 

(e)           Except as otherwise set forth herein, interest on each Loan shall be payable in arrears on and to (i) each Interest Payment Date applicable to such Loan; (ii) upon any prepayment of such Loan that is a Eurodollar Rate Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) at maturity, including final maturity.

 

(f)            To the extent any other Credit Document references “Loans”, “Term Loans” or loans made under this Agreement for purposes of determining the applicable interest rate (excluding any reference in connection with the payment of interest on the principal amount of the Loans) and without specifying whether such reference is intended to mean “Term Loans” or “Additional Term Loans”, each such reference shall be interpreted to mean “Additional Term Loans”.

 

2.8          Conversion/Continuation.

 

(a)           Subject to Section 2.17 and so long as no Default or Event of Default shall have occurred and then be continuing, Borrower shall have the option:

 

(i)             to convert at any time all or any part of any Term Loan equal to $2,000,000 and integral multiples of $500,000 in excess of that amount from one Type of Loan to another Type of Loan; provided, a Eurodollar Rate Loan may only be converted on the expiration of

 

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the Interest Period applicable to such Eurodollar Rate Loan unless Borrower shall pay all amounts due under Section 2.17 in connection with any such conversion; or

 

(ii)          upon the expiration of any Interest Period applicable to any Eurodollar Rate Loan, to continue all or any portion of such Loan equal to $2,000,000 and integral multiples of $500,000 in excess of that amount as a Eurodollar Rate Loan.

 

(b)           Borrower shall deliver a Conversion/Continuation Notice to Administrative Agent no later than 10:00 a.m. (New York City time) at least one Business Day in advance of the proposed conversion date (in the case of a conversion to a Base Rate Loan) and at least three (3) Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan).  Except as otherwise provided herein, a Conversion/Continuation Notice for conversion to, or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be irrevocable, and Borrower shall be bound to effect a conversion or continuation in accordance therewith.

 

2.9          Default Interest.  Upon the occurrence and during the continuance of an Event of Default under Sections 8.1(a), 8.1(f) or 8.1(g), the principal amount of all Loans outstanding and, to the extent permitted by applicable law, any interest payments on the Loans not paid when due and any fees and other amounts then due and payable hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans constituting Term Loans (other than Additional Term Loans) or Additional Term Loans, as applicable); provided, in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans constituting Term Loans (other than Additional Term Loans) or Additional Term Loans, as applicable.  Payment or acceptance of the increased rates of interest provided for in this Section 2.9 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent, Collateral Agent or any Lender.

 

2.10        FeesCompany agrees to pay to Arranger and Agents such other fees and other payments in the amounts and at the times separately agreed upon.

 

2.11        Scheduled Term Loan Payments.  The principal amounts of the Term Loans shall be repaid in consecutive quarterly installments in amounts equal to 0.25% of the Term

 

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Loans funded on the Closing Date or the Second Amendment Effective Date, as applicable, on the last day of each Fiscal Quarter, with the balance of the Term Loans (other than the Additional Term Loans) payable on the Maturity Date and the balance of the Additional Term Loans payable on the Additional Term Loan Maturity Date (each of such consecutive quarterly installments and the payment of the balances on the Maturity Date and the Additional Term Loan Maturity Date, an “Installment”).

 

Notwithstanding the foregoing, (x) such Installments shall be reduced pro rata in connection with any voluntary or mandatory prepayments of the Term Loans in accordance with Sections 2.12, 2.13 and 2.14, as applicable; (y) the Term Loans (other than the Additional Term Loans), together with all other amounts owed hereunder with respect thereto, shall, in any event be paid in full no later than the Maturity Date and (z) the Additional Term Loans, together with all other amounts owed hereunder with respect thereto, shall, in any event be paid in full no later than the Additional Term Loan Maturity Date.

 

2.12        Voluntary Prepayments.

 

(a)           Voluntary Prepayments.

 

(i)             Any time and from time to time:

 

(1)       with respect to Base Rate Loans, Borrower may prepay any such Loans on any Business Day in whole or in part, in an aggregate minimum amount of $2,000,000 and integral multiples of $500,000 in excess of that amount; and

 

(2)       with respect to Eurodollar Rate Loans, Borrower may prepay any such Loans on any Business Day in whole or in part in an aggregate minimum amount of $2,000,000 and integral multiples of $500,000 in excess of that amount;

 

(ii)          All such prepayments shall be made:

 

(1)       upon not less than one (1) Business Day’s prior written or telephonic notice in the case of Base Rate Loans; and

 

(2)       upon not less than three (3) Business Days’ prior written or telephonic notice in the case of Eurodollar Rate Loans;

 

in each case given to Administrative Agent by 12:00 p.m. (New York City time) on the date required and, if given by telephone, promptly confirmed in writing to Administrative Agent (and

 

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Administrative Agent will promptly notify each Lender).  Upon the giving of any such notice (which notice shall be irrevocable), the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein.  Any such voluntary prepayment shall be applied as specified in Section 2.14(a).

 

2.13        Mandatory Prepayments.

 

(a)           Asset Sales.  No later than the first Business Day following the date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale Proceeds, Company shall offer to prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in an aggregate amount equal to such Net Asset Sale Proceeds; provided, so long as no Default or Event of Default shall have occurred and be continuing on or as of such first Business Day, Company shall have the option (exercisable upon written notice thereof to Administrative Agent on or prior to such first Business Day), directly or through one or more of its Subsidiaries, to invest Net Asset Sale Proceeds within three hundred and sixty five (365) days of receipt thereof in long-term productive assets of the general type used in the business of Company and its Subsidiaries or to make capital expenditures in connection with improvement of capital assets of Company or any of its Subsidiaries (it being expressly agreed that any Net Asset Sale Proceeds not so invested shall be immediately offered to be applied as set forth in Sections 2.14(b) and 2.14(d)); provided, further, pending any such investment at any time that Net Asset Sale Proceeds not so invested shall equal or exceed $5,000,000 in the aggregate, an amount equal to all such Net Asset Sale Proceeds shall be deposited by Company, unless waived by Administrative Agent in its sole discretion, in a deposit account maintained at Administrative Agent as part of the Collateral (it being understood that, (x) so long as no Default or Event of Default shall have occurred and be continuing, Administrative Agent shall release or consent to the release of such funds to Company upon delivery to Administrative Agent of a certificate of an officer of Company certifying that such funds shall, upon release of such funds, be applied in accordance this Section 2.13(a) and (y) to the extent such amounts are not applied in accordance with, and at the times required by, this Section 2.13(a), all such funds then held by Administrative Agent shall be immediately applied by Administrative Agent, or immediately paid over to Administrative Agent to be applied, as set forth in Section 2.14(b)); provided, further, that notwithstanding the foregoing, the Net Asset Sale Proceeds from any sale leaseback transaction permitted pursuant to Section 6.1(n) hereof shall be offered to be applied as set forth in Sections 2.15(b) and 2.14(d).

 

(b)           Insurance/Condemnation Proceeds.  No later than the first Business Day following the date of receipt by Holdings or any of its Subsidiaries, or Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds, Company shall offer to prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided, so long as no Default or Event of Default shall have occurred and be continuing on or as of such first Business Day, Company shall have the option (exercisable upon written notice thereof to Administrative Agent on or prior to such first Business Day), directly or through one or more of its Subsidiaries to invest such Net Insurance/Condemnation Proceeds within three hundred and sixty five (365) days of receipt thereof in long-term productive assets of the general type used in the business of Holdings and its

 

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Subsidiaries, which investment may include the repair, restoration or replacement of the applicable assets thereof (it being expressly agreed that any Net Insurance/Condemnation Proceeds not so invested shall immediately be offered to be applied as set forth in Sections 2.14(b) and 2.14(d)); provided, further, pending any such investment at any time that Net Insurance/Condemnation Proceeds not so invested shall equal or exceed $5,000,000 in the aggregate, an amount equal to all such Net Insurance/Condemnation Proceeds shall be deposited by Company, unless waived by Administrative Agent in its sole discretion, in a deposit account maintained at Administrative Agent (it being understood that, (x) so long as no Default or Event of Default shall have occurred and be continuing, Administrative Agent shall release or consent to the release of such funds to Company upon delivery to Administrative Agent of a certificate of an officer of Company certifying that such funds shall, upon release of such funds, be applied in accordance this Section 2.13(b) and (y) to the extent such amounts are not applied in accordance with, and at the times required by, this Section 2.13(b), all such funds then held by Administrative Agent shall be immediately applied by Administrative Agent, or immediately paid over to Administrative Agent to be applied, as set forth in Section 2.14(b)).

 

(c)           Issuance of Debt.  No later than the first Business Day following the date of receipt by Holdings or any of its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of Holdings or any of its Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.1), Company shall offer to prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses.

 

(d)           Consolidated Excess Cash Flow.  In the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year 2008), Company shall, no later than one hundred fifty (150) days after the end of such Fiscal Year, offer to prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in an aggregate amount equal to 50% of such Consolidated Excess Cash Flow.

 

(e)           Prepayment Certificate.  Concurrently with any prepayment of the Loans pursuant to Sections 2.13(a) through 2.13(d), Company shall deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the calculation of the amount of the applicable net proceeds or Consolidated Excess Cash Flow as the case may be.  In the event that Company shall subsequently determine that the actual amount received exceeded the amount set forth in such certificate, Company shall promptly make an additional prepayment of the Loans and Company shall concurrently therewith deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the derivation of such excess.

 

2.14        Application of Prepayments/Reductions.

 

(a)           Application of Voluntary Prepayments.  Any prepayment of any Loan pursuant to Section 2.12 shall be applied to prepay Term Loans on a pro rata basis to the remaining scheduled Installments of principal of the Term Loans.

 

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(b)           Application of Mandatory Prepayments.  Subject to Section 2.14(d), any prepayment of any Loan pursuant to Section 2.13 shall be applied to prepay Term Loans on a pro rata basis to the remaining scheduled Installments of principal of the Term Loans.

 

(c)           Application of Prepayments of Loans to Base Rate Loans and Eurodollar Rate Loans.  Considering each Class of Loans being prepaid separately, any prepayment thereof shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner which minimizes the amount of any payments required to be made by Borrower pursuant to Section 2.17(c).

 

(d)           Lender Opt-out.  With respect to any prepayment of Term Loans pursuant to Section 2.13, any Lender, at its option, may elect not to accept such prepayment.  Upon the dates set forth in Section 2.13 for any such prepayment of Term Loans, the Borrower shall notify the Administrative Agent of the amount that is available to prepay the Term Loans (the “Prepayment Amount”).  Promptly after the date of receipt of such notice, the Administrative Agent shall provide written notice (the “First Offer”) to the Lenders of the amount available to prepay the Term Loans.  Any Lender declining such prepayment (a “Declining Lender) shall give written notice thereof to the Administrative Agent by 11:00 a.m. no later than two (2) Business Days after the date of such notice from the Administrative Agent.  On such date the Administrative Agent shall then provide written notice (the “Second Offer”) to the Lenders other than the Declining Lenders (such Lenders being the “Accepting Lenders”) of the additional amount available (due to such Declining Lenders’ declining such prepayment) to prepay Term Loans owing to such Accepting Lenders, such available amount to be allocated on a pro rata basis among the Accepting Lenders that accept the Second Offer.  Any Lender declining prepayment pursuant to such Second Offer shall give written notice thereof to the Administrative Agent by 11:00 a.m. no later than one (1) Business Day after the date of such notice of a Second Offer.  The Borrower shall prepay the Loans as set forth in Section 2.13 within one Business Day after its receipt of notice from the Administrative Agent of the aggregate amount of such prepayment.  Amounts remaining after the allocation of accepted amounts with respect to the First Offer and the Second Offer to Accepting Lenders  shall be retained by the Borrower.

 

2.15        General Provisions Regarding Payments.

 

(a)           All payments by Borrower of principal, interest, fees and other Obligations shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 12:00 p.m. (New York City time) on the date due at Administrative Agent’s Principal Office for the account of Lenders; funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Borrower on the next succeeding Business Day, at Administrative Agent’s sole discretion.

 

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(b)                                 All payments in respect of the principal amount of any Loan shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid.

 

(c)                                  Administrative Agent shall promptly distribute to each Lender at such address as such Lender shall indicate in writing, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due thereto, including, without limitation, all fees payable with respect thereto, to the extent received by Administrative Agent.

 

(d)                                 Notwithstanding the foregoing provisions hereof, if any Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in apportioning payments received thereafter.

 

(e)                                  Subject to the provisos set forth in the definition of “Interest Period,” whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder.

 

(f)                                    Administrative Agent, at its sole discretion, shall deem any payment by or on behalf of Borrower hereunder that is not made in same day funds prior to 12:00 p.m. (New York City time) to be a non-conforming payment.  Any such payment shall not be deemed to have been received by Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day.  Administrative Agent shall give prompt telephonic notice to Borrower and each applicable Lender (confirmed in writing) if any payment is non-conforming.  Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 8.1(a).  Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.9 from the date such amount was due and payable until the date such amount is paid in full.

 

(g)                                 If an Event of Default shall have occurred and not otherwise been waived, and the maturity of the Obligations shall have been accelerated pursuant to Section 8.1, all payments or proceeds received by Agents hereunder in respect of any of the Obligations, shall be applied in accordance with the application arrangements described in Section 7.2 of the Pledge and Security Agreement.

 

(h)                                 It is confirmed and acknowledged that no Permitted Loan Purchase (and the purchase price paid to any Lender in consideration of the purchase of such Lender’s Loans in connection therewith) and no cancellation or retirement of Loans acquired in any Permitted

 

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Loan Purchase shall constitute a payment or reduction of Loans or Obligations for purposes of this Section 2.15 or any other provision of this Agreement.

 

2.16                        Ratable Sharing.  Lenders hereby agree among themselves that, except as otherwise provided in the Collateral Documents with respect to amounts realized from the exercise of rights with respect to Liens on the Collateral, if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Credit Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, fees and other amounts then due and owing to such Lender hereunder or under the other Credit Documents (collectively, the Aggregate Amounts Due to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of Borrower or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest.  Borrower expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may, so long as an Event of Default has occurred and is continuing, exercise any and all rights of banker’s lien, set-off or counterclaim with respect to any and all monies owing by Borrower to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder.

 

2.17                        Making or Maintaining Eurodollar Rate Loans.

 

(a)                                  Inability to Determine Applicable Interest Rate.  In the event that Administrative Agent shall have determined (which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that by reason of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Adjusted Eurodollar Rate, Administrative Agent shall on such date give notice (by telefacsimile or by telephone confirmed in writing) to Borrower and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies Borrower and Lenders that the circumstances giving rise to such notice no longer exist, and (ii) any Funding Notice or Conversion/Continuation Notice given by Borrower with respect to the

 

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Loans in respect of which such determination was made shall be deemed to be rescinded by Borrower.

 

(b)                                 Illegality or Impracticability of Eurodollar Rate Loans.  In the event that on any date any Lender shall have determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with Borrower and Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the date hereof which materially and adversely affect the London interbank market or the position of such Lender in that market, then, and in any such event, such Lender shall be an Affected Lender and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to Borrower and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each other Lender).  Thereafter (1) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (2) to the extent such determination by the Affected Lender relates to a Eurodollar Rate Loan then being requested by Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or continue such Loan as or convert such Loan to, as the case may be) a Base Rate Loan, (3) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the Affected Loans) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (4) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination.  Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then being requested by Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, Borrower shall have the option, subject to the provisions of Section 2.17(c), to rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission Administrative Agent shall promptly transmit to each other Lender).  Except as provided in the immediately preceding sentence, nothing in this Section 2.17(b) shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms hereof.

 

(c)                                  Compensation for Breakage or Non-Commencement of Interest Periods.  Borrower shall compensate each Lender, upon written request by such Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including any interest paid by such Lender to Lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds but excluding loss

 

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of anticipated profits) which such Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Funding Notice or a telephonic request for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or continuation; (ii) if any prepayment or other principal payment of, or any conversion of, any of its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable to that Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in a notice of prepayment given by Borrower.

 

(d)                                 Booking of Eurodollar Rate Loans.  Any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of such Lender.

 

(e)                                  Assumptions Concerning Funding of Eurodollar Rate Loans.  Calculation of all amounts payable to a Lender under this Section 2.17 and under Section 2.18 shall be made as though such Lender had actually funded each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of such Lender to a domestic office of such Lender in the United States of America; provided, however, each Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 2.17 and under Section 2.18.

 

2.18                        Increased Costs; Capital Adequacy.

 

(a)                                  Compensation For Increased Costs and Taxes.  Subject to the provisions of Section 2.20 (which shall be controlling with respect to the matters covered thereby), in the event that any Lender shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or Governmental Authority, in each case that becomes effective after the Closing Date, or compliance by such Lender with any guideline, request or directive issued or made after the Closing Date by any central bank, other Governmental Authority or quasi-governmental authority (whether or not having the force of law) (any such event, a Change in Law): (i) subjects such Lender (or its applicable lending office) to any additional Tax with respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder or thereunder or any payments to such Lender (or its applicable lending office) of principal, interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC

 

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insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Adjusted Eurodollar Rate); or (iii) imposes any other condition (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, Borrower shall promptly pay to such Lender, upon receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder.  Such Lender shall deliver to Borrower (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.18(a), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

(b)                                 Capital Adequacy Adjustment.  In the event that any Lender shall have determined that any Change in Law regarding capital adequacy has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or participations therein or other obligations hereunder with respect to the Loans to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within five (5) Business Days after receipt by Borrower from such Lender of the statement referred to in the next sentence, Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction. Such Lender shall deliver to Borrower (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to Lender under this Section 2.18(b), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

2.19                        Taxes; Withholding, etc.

 

(a)                                  Payments to Be Free and Clear.  All sums payable by any Credit Party hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax imposed, levied, collected, withheld or assessed by or within the United States of America or any political subdivision in or of the United States of America or any other jurisdiction from or to which a payment is made by or on behalf of any Credit Party or by any federation or

 

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organization of which the United States of America or any such jurisdiction is a member at the time of payment.

 

(b)                                 Withholding of Taxes.  If any Credit Party or any other Person is required by law to make any deduction or withholding on account of any Tax from any sum paid or payable by any Credit Party to Administrative Agent or any Lender under any of the Credit Documents: (i) Borrower shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as Borrower becomes aware of it; (ii) Borrower shall pay any such Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party) for its own account or (if that liability is imposed on Administrative Agent or such Lender, as the case may be) on behalf of and in the name of Administrative Agent or such Lender; (iii) the sum payable by such Credit Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty (30) days after paying any sum from which it is required by law to make any deduction or withholding, and within thirty (30) days after the due date of payment of any Tax which it is required by clause (ii) above to pay, Borrower shall deliver to Administrative Agent evidence satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority; provided, no such additional amount shall be required to be paid to any Lender under clause (iii) above except to the extent that any change after the date hereof (in the case of each Lender listed on the signature pages hereof on the Closing Date) or after the effective date of the Assignment Agreement or Term Loan Joinder Agreement pursuant to which such Lender became a Lender (in the case of each other Lender) in any such requirement for a deduction, withholding or payment as is mentioned therein shall result in an increase in the rate of such deduction, withholding or payment from that in effect at the date hereof or at the date of such Term Loan Joinder Agreement or Assignment Agreement, as the case may be, in respect of payments to such Lender.

 

(c)                                  Evidence of Exemption From U.S. Withholding Tax.  Each Lender that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes (a Non-US Lender) shall deliver to Administrative Agent for transmission to Borrower, on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or prior to the date of the Assignment Agreement or Term Loan Joinder Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of Borrower or Administrative Agent (each in the reasonable exercise of its discretion), (i) two original copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any successor forms), properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Borrower to establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Lender of principal, interest, fees or other amounts payable under any of the Credit Documents, or (ii) if such

 

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Lender is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver either Internal Revenue Service Form W-8ECI pursuant to clause (i) above, a Certificate re Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN (or any successor form), properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Borrower to establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Lender of interest payable under any of the Credit Documents.  Each Lender required to deliver any forms, certificates or other evidence with respect to United States federal income tax withholding matters pursuant to this Section 2.19(c) hereby agrees, from time to time after the initial delivery by such Lender of such forms, certificates or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate in any material respect, that such Lender shall promptly deliver to Administrative Agent for transmission to Borrower two new original copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN (or any successor form), as the case may be, properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Borrower to confirm or establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to payments to such Lender under the Credit Documents, or notify Administrative Agent and Borrower of its inability to deliver any such forms, certificates or other evidence.  Borrower shall not be required to pay any additional amount to any Non-US Lender under Section 2.19(b)(iii) if such Lender shall have failed (1) to deliver the forms, certificates or other evidence referred to in the second sentence of this Section 2.19(c), or (2) to notify Administrative Agent and Borrower of its inability to deliver any such forms, certificates or other evidence, as the case may be; provided, if such Lender shall have satisfied the requirements of the first sentence of this Section 2.19(c) on the Closing Date, or on the date of the Assignment Agreement or Term Loan Joinder Agreement pursuant to which it became a Lender, as applicable, nothing in this last sentence of Section 2.19(c) shall relieve Borrower of its obligation to pay any additional amounts pursuant this Section 2.19 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender is not subject to withholding as described herein.

 

2.20                        Obligation to Mitigate.  Each Lender agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans, as the case may be, becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under Section 2.17, 2.18 or 2.19, it will, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions, including any Affected Loans, through another office of such Lender, or (b) take such other measures as such Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender pursuant to Section 2.17, 2.18 or 2.19 would be materially reduced and if, as

 

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determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Loans through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Loans or the interests of such Lender; provided, such Lender will not be obligated to utilize such other office pursuant to this Section 2.20 unless Borrower agrees to pay all incremental expenses incurred by such Lender as a result of utilizing such other office as described in clause (i) above.  A certificate as to the amount of any such expenses payable by Borrower pursuant to this Section 2.20 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to Borrower (with a copy to Administrative Agent) shall be conclusive absent manifest error.

 

2.21                        Call Protection.  In the event that, after the Second Amendment Effective Date, but on or prior to the first anniversary of the Second Amendment Effective Date, any Lender receives (x) a prepayment of principal of the Loans pursuant to Section 2.12 or 2.13(c) or (y) a repayment of principal amount of the Loans as a result of the mandatory assignment of such Loans in the circumstances described in Section 2.22 following the failure of such Lender to consent to an amendment of this Agreement that would have the effect of reducing any of the Applicable Margin with respect to such Loans, then in each case, at the time thereof, the Borrower shall pay to such Lender a prepayment premium equal to 1.00 % of the principal amount of such prepayment or repayment.

 

2.22                        Removal or Replacement of a Lender.  Anything contained herein to the contrary notwithstanding, in the event that: (a)(i) any Lender (an Increased-Cost Lender) shall give notice to Representative that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section 2.17, 2.18 or 2.19, (ii) the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within five (5) Business Days after Borrower’s request for such withdrawal; or (b) in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions hereof as contemplated by Section 10.5(b), the consent of Requisite Lenders shall have been obtained but the consent of one or more of such other Lenders (each a Non-Consenting Lender) whose consent is required shall not have been obtained; then, with respect to each such Increased-Cost Lender or Non-Consenting Lender (the Terminated Lender), Borrower may, by giving written notice to Administrative Agent and any Terminated Lender of its election to do so, or Administrative Agent may, elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans, if any, in full to one or more Eligible Assignees satisfactory to Administrative Agent (each a Replacement Lender) in accordance with the provisions of Section 10.6 and Terminated Lender shall pay any fees payable thereunder in connection with such assignment; provided, (1) on the date of such assignment, the Replacement Lender shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal to all unreimbursed drawings that have been funded by such Terminated Lender, together with all then unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.10; (2) on the date of such assignment, Borrower shall pay any amounts payable to such Terminated Lender pursuant to

 

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Section 2.17(c), 2.18 or 2.19, or otherwise as if it were a prepayment; and (3) in the event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender was a Non-Consenting Lender.  Upon the prepayment of all amounts owing to any Terminated Lender, if any, such Terminated Lender shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such Terminated Lender to indemnification hereunder shall survive as to such Terminated Lender.

 

SECTION 3.                            CONDITIONS PRECEDENT

 

3.1                               Closing Date.  The obligation of any Lender to make a Credit Extension on the Closing Date is subject to the satisfaction, or waiver in accordance with Section 10.5, of the following conditions on or before the Closing Date:

 

(a)                                  Credit Documents.  Administrative Agent shall have received (i) sufficient copies of this Agreement, executed and delivered by each applicable Credit Party, the Agents and Lenders having Term Loan Commitments hereunder and, (ii) Notes, if any, requested by any Lender pursuant to Section 2.6(c) in connection with its Term Loan Commitments, executed and delivered by Borrower.

 

(b)                                 Organizational Documents; Incumbency.  Administrative Agent shall have received (i) copies of each Organizational Document for each Credit Party, certified as of a recent date prior to the Closing Date by the appropriate governmental official or, as applicable, by an officer of such Credit Party; (ii) signature and incumbency certificates of the officers of each Credit Party executing the Credit Documents to which it is a party; (iii) resolutions of the Board of Directors or similar governing body of each Credit Party approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party, certified as of the Closing Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) a good standing certificate from the applicable Governmental Authority of each Credit Party’s jurisdiction of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the Closing Date; and (v) such other documents as Administrative Agent may reasonably request.

 

(c)                                  Governmental Authorizations and Consents.

 

(i)             Each Credit Party shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary or

 

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advisable in connection with the transactions contemplated under this Agreement and each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to Administrative Agent.

 

(ii)          Each of the Lenders shall have received, at least five (5) Business Days in advance of the Closing Date, all documentation and other information required by Governmental Authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including, without limitation, as required by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001.

 

(d)                                 Term Priority Collateral.  The Administrative Agent shall be satisfied with the valid perfected First Priority security interest in favor of Collateral Agent, for the benefit of Secured Parties, in the Term Priority Collateral.

 

(e)                                  ABL Priority Collateral.  The Administrative Agent shall be satisfied with the valid perfected Second Priority security interest in favor of Collateral Agent, for the benefit of Secured Parties, in the ABL Priority Collateral of each Credit Party.

 

(f)                                    Opinion of Counsel to Credit Parties.  Lenders and their respective counsel shall have received originally executed copies of the favorable written opinion of Gibson, Dunn & Crutcher LLP, counsel for Credit Parties, in form and substance satisfactory to the Administrative Agent, dated as of the Closing Date (and each Credit Party hereby instructs such counsel to deliver such opinion to Agents and Lenders).

 

(g)                                 Fees.  Borrower shall have paid to Arranger and Agents the fees and other amounts payable on the Closing Date referred to in Section 2.10.

 

(h)                                 Solvency Certificate.  On the Closing Date, Administrative Agent shall have received a Solvency Certificate dated as of the Closing Date and addressed to Administrative Agent and Lenders, in form, scope and substance satisfactory to Administrative Agent, with appropriate attachments and demonstrating that after giving effect to the transactions contemplated by the Credit Documents and the Revolving Credit Documents, Borrower is and will be, and Holdings and its Subsidiaries (on a consolidated basis) are and will be Solvent.

 

(i)                                     No Litigation.  There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any

 

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court or before any arbitrator or Governmental Authority that, in the opinion of Administrative Agent, singly or in the aggregate, could reasonably be expected to restrain, prevent or impose materially burdensome conditions on the transactions contemplated by this Agreement or the other Credit Documents.

 

(j)                                     No Material Adverse Effect.  Since December 31, 2006, there shall not have occurred a material adverse effect upon the business, operations, properties, assets or condition (financial or otherwise) of Company and its Subsidiaries, taken as a whole.

 

(k)                                  Existing Credit Agreement Prepayments.  The Administrative Agent shall be satisfied that, concurrently with the borrowing of the Term Loans on the Closing Date, the Existing Credit Agreement will be terminated, all Liens securing obligations under the Existing Agreement will be released, and all obligations under the Existing Credit Agreement repaid in full.

 

(l)                                     Completion of Proceedings.  All partnership, corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent and its counsel shall be satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request.

 

(m)                               Revolving Credit Facility.  Borrower shall have entered into the Revolving Credit Facility and the Revolving Credit Documents shall be satisfactory to the Administrative Agent.

 

(n)                                 Blocked Account Agreement.  Enter into a Blocked Account Agreement with respect to each Deposit Account of any Credit Party.

 

(o)                                 Closing Date Certificate.  The Administrative Agent shall have received a certificate signed by the chief financial officer of the Borrower dated the Closing Date, certifying (A) that the conditions specified in Section 3.1(a) have been satisfied, (B) that the representations and warranties contained in Section 4 are true and correct and (C) that no event shall have occurred and be continuing or would result from the consummation of the Credit Extensions on the Closing Date that would constitute an Event of Default or a Default.

 

(p)                                 Funding Notice.  Administrative Agent shall have received a fully executed and delivered Funding Notice.

 

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(q)                                 Representations and Warranties.  As of the Closing Date, the representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects on and as of the Closing Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date.

 

(r)                                    Event of Default or a Default.  As of the Closing Date, no event shall have occurred and be continuing or would result from the consummation of the Credit Extensions that would constitute an Event of Default or a Default.

 

Each Lender, by delivering its signature page to this Agreement on the Closing Date, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved on the Closing Date.

 

3.2                               Notices.  Any Notice shall be executed by an Authorized Officer in a writing delivered to Administrative Agent.  In lieu of delivering a Notice, Borrower may give Administrative Agent telephonic notice by the required time of any proposed borrowing, conversion/continuation, as the case may be; provided each such notice shall be promptly confirmed in writing by delivery of the applicable Notice to Administrative Agent on or before the applicable date of borrowing, continuation/conversion.  Neither Administrative Agent nor any Lender shall incur any liability to Borrower in acting upon any telephonic notice referred to above that Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized on behalf of Borrower or for otherwise acting in good faith.

 

SECTION 4.                            REPRESENTATIONS AND WARRANTIES

 

In order to induce Lenders to enter into this Agreement and to make each Credit Extension to be made thereby, each Credit Party represents and warrants to each Lender, on the Closing Date and on each Credit Date, that the following statements are true and correct:

 

4.1                               Organization; Requisite Power and Authority; Qualification.  Each of Holdings and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization as identified in Schedule 4.1 (subject to such changes as are permitted by Section 6.9), (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Credit Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect.

 

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4.2                               Capital Stock and Ownership.  The Capital Stock of each of Holdings and its Subsidiaries has been duly authorized and validly issued and is fully paid and non-assessable.  Except as set forth on Schedule 4.2, as of the date hereof, there is no existing option, warrant, call, right, commitment or other agreement to which Holdings or any of its Subsidiaries is a party requiring, and there is no membership interest or other Capital Stock of Holdings or any of its Subsidiaries outstanding which upon conversion or exchange would require, the issuance by Holdings or any of its Subsidiaries of any additional membership interests or other Capital Stock of Holdings or any of its Subsidiaries or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Capital Stock of Holdings or any of its Subsidiaries.  Schedule 4.2 correctly sets forth the ownership interest of Holdings and each of its Subsidiaries in their respective Subsidiaries as of the Closing Date.

 

4.3                               Due Authorization.  The execution, delivery and performance of the Credit Documents have been duly authorized by all necessary action on the part of each Credit Party that is a party thereto.

 

4.4                               No Conflict.  The execution, delivery and performance by Credit Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) violate any provision of any law or any governmental rule or regulation applicable to Holdings or any of its Subsidiaries, any of the Organizational Documents of Holdings or any of its Subsidiaries; (b) violate any order, judgment or decree of any court or other agency of government binding on Holdings or any of its Subsidiaries except to the extent such violation could not be reasonably expected to have a Material Adverse Effect; (c) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Holdings or any of its Subsidiaries except to the extent such violation could not reasonably be expected to have a Material Adverse Effect; (d) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Liens created under any of the Credit Documents in favor of Collateral Agent, on behalf of Secured Parties); or (e) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Holdings or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Closing Date and disclosed in writing to Lenders.

 

4.5                               Governmental Consents.  The execution, delivery and performance by Credit Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except to the extent obtained on or before the Closing Date, and except for filings and recordings with respect to the Collateral made or to be made, or otherwise delivered to Collateral Agent for filing and/or recordation, as of the Closing Date.

 

4.6                               Binding Obligation.  Each Credit Document has been duly executed and delivered by each Credit Party that is a party thereto and is the legally valid and binding

 

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obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

4.7                               Financial Condition.  Holdings has heretofore delivered to Administrative Agent (a) the audited consolidated balance sheet of Company and its Subsidiaries for the Fiscal Years ended December 31, 2004, December 31, 2005 and December 31, 2006, and the related audited consolidated statements of income, stockholders’ equity and cash flows of each of such companies for each such Fiscal Year then ended, together with all related notes and schedules thereto, and (b) the unaudited consolidated balance sheet of Company and its Subsidiaries for the three-month period ended March 30, 2007 and the related unaudited consolidated statements of income, stockholders’ equity and cash flows of the Company and its Subsidiaries for such three-month period then ended, together with all related notes and schedules thereto.  All such statements of Company and its Subsidiaries were prepared in conformity with GAAP and fairly present, in all material respects, the financial position of the entities described in such financial statements as at the respective dates thereof and the results of operations and cash flows of the entities described therein for each of the periods then ended, subject, in the case of such unaudited financial statements, to changes resulting from audit and normal year-end adjustments and the absence of footnotes.  As of the Closing Date, neither Company nor any of its Subsidiaries has any contingent liability or liability for taxes, long-term lease or unusual forward or long-term commitment that is not reflected in the foregoing financial statements or the notes thereto and which in any such case is material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company and its Subsidiaries taken as a whole.

 

4.8                               Projections.  On and as of the Closing Date, the projections of Holdings and its Subsidiaries for (x) the period Fiscal Year 2007 through and including Fiscal Year 2013 and (y) the Fiscal Quarters beginning with the second Fiscal Quarter of 2007 through and including the fourth Fiscal Quarter of 2008 (collectively, the “Projections”) previously delivered to Administrative Agent and the Lenders are based on good faith estimates and assumptions made by the management of Holdings, it being recognized, however, that projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by the Projections may differ from the projected results and that the differences may be material.

 

4.9                               No Material Adverse Change.  Since December 31, 2006, except as set forth in Schedule 4.9, no event, circumstance or change has occurred that has caused or evidences, or could reasonably be expected to cause, either in any case or in the aggregate, a Material Adverse Effect.

 

4.10                        No Restricted Payments.  Neither Holdings nor any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart any sum or property for, any Restricted Payment or agreed to do so except as permitted pursuant to Section 6.5.

 

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4.11                        Litigation; Adverse Facts.  Except as set forth in Schedule 4.11 hereto, there are no Adverse Proceedings, individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect.  Neither Holdings nor any of its Subsidiaries (a) is in violation of any applicable laws (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

4.12                        Payment of Taxes.  Except as otherwise permitted under Section 5.3, all tax returns and reports of Holdings and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon Holdings and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable.  Neither Holdings nor any of its Subsidiaries knows of any proposed tax assessment against Holdings or any of its Subsidiaries other than those which are being actively contested by Holdings or such Subsidiary in good faith and by appropriate proceedings and for which reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

 

4.13                        Properties.

 

(a)                                  Title.  Each of Holdings and its Subsidiaries has (i) good, sufficient and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (iii) good title to (in the case of all other personal property), all of their respective properties and assets reflected in the most recent financial statements delivered to the Administrative Agent, in each case except for assets disposed of (x) since the date of such financial statements and prior to the Closing Date in the ordinary course of business or (y) as otherwise permitted under Section 6.9 and except for such defects that neither individually nor in the aggregate could reasonably be expected to have a Material Adverse Effect.  Except as permitted by this Agreement, all such properties and assets are free and clear of Liens.

 

(b)                                 Real Estate.  As of the Closing Date, Schedule 4.13 contains a true, accurate and complete list of (i) all Real Estate Assets, and (ii) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions of any thereof), if any, affecting each Real Estate Asset of any Credit Party, regardless of whether such Credit Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment.  Each agreement listed in clause (ii) of the immediately preceding sentence is in full force and effect and Holdings does not have knowledge of any default that has occurred and is continuing thereunder, and each such agreement constitutes the legally valid and binding obligation of each applicable Credit Party, enforceable against such Credit Party in accordance with its

 

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terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles.

 

(c)                                  Intellectual Property.  Company and its Subsidiaries own or have the valid right to use all material Intellectual Property, and all Intellectual Property is free and clear of any and all Liens other than Liens securing the Obligations and Liens permitted pursuant to Section 6.2(i).  Any registrations in respect of the Intellectual Property are in full force and effect and are valid and enforceable. The conduct of the business of Company and its Subsidiaries as currently conducted, and as currently contemplated to be conducted, including, but not limited to, all products, processes or services, made, offered or sold by Company and its Subsidiaries, does not and will not infringe upon, violate, misappropriate or dilute any intellectual property of any third party which infringement, violation, misappropriation or dilution could reasonably be expected to have a Material Adverse Effect. To the knowledge of Holdings, Company or any of its Subsidiaries, no third party is infringing upon or misappropriating, violating or otherwise diluting any Intellectual Property where such infringement, misappropriation, violation or dilution could reasonably be expected to have a Material Adverse Effect.  Neither Holdings, Company nor any of its Subsidiaries is enjoined from using any material Intellectual Property, and except as could reasonably be expected to have a Material Adverse Effect, there is no pending or, to the knowledge of Holdings, Company or any of its Subsidiaries, threatened claim or litigation contesting (i) any right of Company or any of its Subsidiaries to own or use any Intellectual Property, or (ii) the validity or enforceability of any Intellectual Property.

 

4.14                        Environmental Matters.  Except as set forth in Schedule 4.14 hereto: (i) neither Holdings nor any of its Subsidiaries nor any of their respective Facilities or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials Activity which individually or in the aggregate would reasonably be expected to have a Material Adverse Effect; (ii) as of the Closing Date, or except as otherwise reported to the Administrative Agent after the Closing Date, neither Holdings nor any of its Subsidiaries has received within the last ten (10) years any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604), or any comparable state law; (iii) there are and, to each of Holdings’ and its Subsidiaries’ knowledge, have been, no conditions, occurrences, or Hazardous Materials Activities which would reasonably be expected to form the basis of an Environmental Claim against Holdings or any of its Subsidiaries, which individually or in the aggregate would reasonably be expected to have a Material Adverse Effect; and (iv) neither Holdings nor any of its Subsidiaries nor, to any Credit Party’s knowledge, any predecessor of Holdings or any of its Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Facility, and none of Holdings’ or any of its Subsidiaries’ operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent, which individually or in the aggregate would reasonably be expected to have a Material Adverse Effect.  Notwithstanding anything to the contrary in this Section 4.14, compliance with all current or reasonably foreseeable future requirements pursuant

 

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to or under Environmental Laws would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect and no event or condition has occurred or is occurring with respect to Holdings or any of its Subsidiaries relating to any Environmental Law, any Release of Hazardous Materials, or any Hazardous Materials Activity, including, without limitation, any matter included in Schedule 4.14, which individually or in the aggregate has had, or would reasonably be expected to have, a Material Adverse Effect.

 

4.15                        No Defaults.  Neither Holdings nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations or covenants contained in (i) any of its Contractual Obligations (other than the Credit Documents and the Revolving Credit Documents), and no condition exists which, with the giving of notice or the lapse of time or both, could constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to have a Material Adverse Effect and (ii) any Credit Document and any Revolving Credit Document.

 

4.16                        Governmental Regulation.  Neither Holdings nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.  Neither Holdings nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

 

4.17                        Margin Regulations.  Neither Holdings nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  Neither the making of the Loans nor the pledge of the Collateral pursuant to the Collateral Documents, violates Regulation T, U or X of the Board of Governors of the Federal Reserve System.  No part of the proceeds of the Loans made to such Credit Party will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U or X of said Board of Governors.

 

4.18                        Employee Matters.  Neither Holdings nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect.  Except as set forth in Schedule 4.18, there is (a) no unfair labor practice complaint pending against Holdings or any of its Subsidiaries, or to the best knowledge of Holdings and Company, threatened against any of them before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement that is so pending against Holdings or any of its Subsidiaries or to the best knowledge of Holdings and Company, threatened against any of them, and the hours worked by and payments made to employees of Holdings or any of its Subsidiaries have not violated the Fair Labor Standards Act or any other law dealing with such matters, (b) no strike or work stoppage in existence or threatened involving Holdings or any of its Subsidiaries, and (c) to the best knowledge of

 

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Holdings and Company, no union representation question existing with respect to the employees of Holdings or any of its Subsidiaries and, to the best knowledge of Holdings and Company, no union organization activity that is taking place; which in each case in clause (a), (b) or (c) above (including, without limitation, any matter included in Schedule 4.18), could either individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

 

4.19                        Employee Benefit Plans.  Holdings, each of its Subsidiaries and each of their respective ERISA Affiliates are in material compliance with all applicable provisions and requirements of ERISA and the Internal Revenue Code and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed all their obligations under each Employee Benefit Plan in all material respects.  Each Employee Benefit Plan which is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the Internal Revenue Service indicating that such Employee Benefit Plan is so qualified and nothing has occurred subsequent to the issuance of such determination letter which reasonably would be expected to cause such Employee Benefit Plan to lose its qualified status.  No liability to the PBGC (other than required premium payments), the Internal Revenue Service, any Employee Benefit Plan or any trust established under Title IV of ERISA has been or reasonably is expected to be incurred by Holdings, any of its Subsidiaries or any of their ERISA Affiliates.  Except as set forth in Schedule 4.19 (and except for changes in matters identified in Schedule 4.19 that are not, individually or in the aggregate, material), no ERISA Event has occurred or is reasonably expected to occur.  Except as set forth in Schedule 4.19, and except to the extent required under Section 4980B of the Internal Revenue Code or similar state laws, no Employee Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates.  Except as set forth in Schedule 4.19 (and except for changes in matters identified in Schedule 4.19 that are not, individually or in the aggregate, material), the present value of the aggregate benefit liabilities under each Pension Plan sponsored, maintained or contributed to by Holdings, any of its Subsidiaries or any of their ERISA Affiliates, (determined as of the end of the most recent plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Plan), did not exceed the aggregate current value of the assets of such Pension Plan.  Neither Holdings, its Subsidiaries nor their respective ERISA Affiliates maintains, contributes to or is required to contribute to any Multiemployer Plan.

 

4.20                        Certain Fees.  Except as otherwise disclosed in writing to Administrative Agent and Arranger, no broker’s or finder’s fee or commission will be payable with respect hereto or any of the transactions contemplated hereby, and Company hereby indemnifies Lenders, Agents and Arranger against, and agrees that it will hold Lenders, Agents and Arranger harmless from, any claim, demand or liability for any such broker’s or finder’s fees alleged to have been incurred in connection herewith or therewith and any expenses (including reasonable fees, expenses and disbursements of counsel) arising in connection with any such claim, demand or liability.

 

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4.21                        Solvency.  Borrower is, and Holdings and its Subsidiaries (on a consolidated basis), are, and, upon the incurrence of any Obligation by any Credit Party on any date on which this representation and warranty is made, will be, Solvent.

 

4.22                        Collateral.

 

(a)                                  Collateral Documents. The security interests created in favor of Collateral Agent under the Collateral Documents constitute, as security for the obligations purported to be secured thereby, a legal, valid and enforceable security interest in all of the Collateral referred to therein in favor of Collateral Agent for the benefit of the Lenders.  The security interests in and Liens upon the Collateral described in the Collateral Documents are valid and perfected First Priority or Second Priority Liens (in accordance with the priorities set forth in the Intercreditor Agreement) to the extent such security interests and Liens can be perfected by such filings and recordations.  No consents, filings or recordings are required in order to perfect (or maintain the perfection or priority of) the security interests purported to be created by any of the Collateral Documents, other than (i) such as have been obtained and which remain in full force and effect, (ii) the periodic filing of UCC continuation statements in respect of UCC financing statements filed by or on behalf of Collateral Agent, and (iii) with respect to such items of Collateral as to which this Agreement or the Collateral Documents do not require any consent, filing or recordation.

 

(b)                                 Absence of Third Party Filings.  Except such as may have been filed in favor of Collateral Agent as contemplated by Section 4.23(a) above and except as set forth on Schedule 4.22 annexed hereto or, after the Closing Date, as may have been filed with respect to a Lien permitted by Section 6.2, (i) no effective UCC financing statement, fixture filing or other instrument similar in effect covering all or any part of the Collateral is on file in any filing or recording office and (ii) no effective filing with respect to a Lien covering all or any part of the Collateral is on file with the United States Patent and Trademark Office or United States Copyright Office or any other Governmental Authority.

 

4.23                        Disclosure.  No representation or warranty of Holdings and its Subsidiaries contained in any Credit Document or in any other documents, certificates or written statements furnished to Lenders by or on behalf of Holdings or any of its Subsidiaries for use in connection with the transactions contemplated hereby or thereby contains any untrue statement of a material fact or omits (when taken as a whole) to state a material fact (known to Holdings or Company, in the case of any document not furnished by either of them) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made.  Any projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by Holdings or Company to be reasonable at the time made, it being recognized by Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.  There is no fact known to Holdings or Company (other than matters of a general economic nature) that, individually or in the aggregate, has had, or could reasonably be expected to result in, a Material

 

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Adverse Effect and that has not been disclosed herein or in such other documents, certificates and statements furnished to Lenders for use in connection with the transactions contemplated hereby.

 

4.24                        Deposit Accounts

 

Annexed hereto as Schedule 4.24 is a list of all Deposit Accounts maintained by the Credit Parties as of the Closing Date, which Schedule includes, with respect to each deposit account (i) the name and address of the depository; (ii) the account number(s) maintained with such depository; and (iii) a contact person at such depository.

 

SECTION 5.                            AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that so long as any Commitment is in effect and until payment in full of all Obligations, each Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 5.

 

5.1                               Financial Statements and Other Reports.  Holdings will deliver to Administrative Agent and Collateral Agent for each Lender:

 

(a)                                  [RESERVED]

 

(b)                                 Quarterly Financial Statements.  Within two (2) Business Days after the date on which Holdings files or is required to file its Form 10-Q under the Exchange Act (but without giving effect to any extension pursuant to Rule 12b-25 under the Exchange Act (or any successor rule) or otherwise) (or, if Holdings is not required to file a Form 10-Q under the Exchange Act, within fifty (50) days after the end of each of the first three Fiscal Quarters of each Fiscal Year (commencing with the Fiscal Quarter ending June 30, 2007)), (i) the consolidated and consolidating balance sheets of Holdings and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated (and with respect to statements of income, consolidating) statements of income and cash flows of Holdings and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the Financial Plan for the current Fiscal Year, all prepared in accordance with GAAP and in reasonable detail and certified by the chief financial officer, senior vice president-finance, treasurer or controller of Company or Holdings that they fairly present, in all material respects, the consolidated financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments and the absence of footnotes, and (ii) a narrative report describing the financial condition and results of operations of Holdings and its Subsidiaries for such Fiscal Quarter in form and substance reasonably satisfactory to Administrative Agent;

 

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(c)                                  Annual Financial Statements.  Within two (2) Business Days after the date on which the Holdings files or is required to file its Form 10-K under the Exchange Act (but without giving effect to any extension pursuant to Rule 12b-25 under the Exchange Act (or any successor rule) or otherwise) (or, if Holdings is not required to file a Form 10-K under the Exchange Act, within one hundred (100) days after the end of each Fiscal Year (commencing with the Fiscal Year ending December 31, 2007)), (i) the consolidated and consolidating balance sheets of Holdings and its Subsidiaries as at the end of such Fiscal Year and the related consolidated (and with respect to statements of income, consolidating) statements of income, stockholder’s equity and cash flows of Holdings and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year and the corresponding figures from the Financial Plan for the Fiscal Year covered by such financial statements, all prepared in accordance with GAAP and in reasonable detail and certified by the chief financial officer, senior vice president-finance, treasurer or controller of Company or Holdings that they fairly present, in all material respects, the consolidated financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, and (ii) a narrative report describing the financial condition and results of operations of Holdings and its Subsidiaries in form and substance reasonably satisfactory to Administrative Agent; (iii) with respect to such consolidated financial statements a report thereon of independent certified public accountants of recognized national standing selected by Holdings, and reasonably satisfactory to Administrative Agent (which report shall be unqualified as to going concern and scope of audit, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards) together with a written statement by such independent certified public accountants stating (1) that their audit examination has included a review of the terms of the Credit Documents, and (2) whether, in connection therewith, any condition or event that constitutes a Default or an Event of Default under Section 6.8 or otherwise with respect to accounting matters has come to their attention and, if such a condition or event has come to their attention, specifying the nature and period of existence thereof;

 

(d)                                 Compliance Certificate.  Together with each delivery of financial statements of Holdings and its Subsidiaries pursuant to Sections 5.1(b) and 5.1(c), a duly executed and completed Compliance Certificate;

 

(e)                                  Statements of Reconciliation after Change in Accounting Principles.  If, as a result of any change in accounting principles and policies from those used in the preparation of the financial statements referred to in Section 4.7, the consolidated financial statements of Holdings and its Subsidiaries delivered pursuant to Section 5.1(b) or 5.1(c) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or

 

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more statements of reconciliation for all such prior financial statements in form and substance reasonably satisfactory to Administrative Agent;

 

(f)                                    Notice of Default, etc.  Promptly upon, and in any event within five (5) days after, any officer of Holdings or any of its Subsidiaries obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to Holdings or any of its Subsidiaries with respect thereto; (ii) that any Person has given any notice to Holdings or any of its Subsidiaries or taken any other action with respect to any claimed default or event or condition of the type referred to in Section 8.1(b); or (iii) of the occurrence of any event or change that has caused or evidences or would reasonably be expected to have, either in any case or in the aggregate, a Material Adverse Effect; a certificate of its Authorized Officers specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, default, event or condition, and what action Holdings or the applicable Subsidiary has taken, is taking and proposes to take with respect thereto;

 

(g)                                 Notice of Litigation.  Promptly upon, and in any event within five (5) days after, any officer of Holdings or any of its Subsidiaries obtaining knowledge of (i) the institution of, or non-frivolous threat of, any Adverse Proceeding not previously disclosed in writing by Company to Lenders, or (ii) any material development in any Adverse Proceeding that, in the case of either (i) or (ii) if adversely determined, could be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to Holdings or any of its Subsidiaries to enable Lenders and their counsel to evaluate such matters;

 

(h)                                 ERISA.  (i) Promptly upon becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, what action Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan and (2) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as Administrative Agent shall reasonably request;

 

(i)                                     Financial Plan.  As soon as practicable and in any event no later than 90 days after the beginning of each Fiscal Year, a monthly consolidated and consolidating plan and financial forecast for such Fiscal Year (a “Financial Plan”), including a forecasted consolidated balance sheet and forecasted consolidated and consolidating statements of income and consolidated statement of cash flows of Holdings and its Subsidiaries for such Fiscal Year, together with pro forma Compliance Certificates for each such Fiscal Year and an explanation of the assumptions on which such forecasts are based;

 

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(j)                                     Insurance Report.  As soon as practicable and in any event by the last day of each calendar year, a report in form and substance reasonably satisfactory to Administrative Agent outlining all material insurance coverage maintained as of the date of such report by Holdings and its Subsidiaries and all material insurance coverage planned to be maintained by Holdings and its Subsidiaries in the immediately succeeding calendar year;

 

(k)                                  Accountants’ Reports.  Promptly upon receipt thereof (unless restricted by applicable professional standards), copies of all reports submitted to Holdings or Company by independent certified public accountants in connection with each annual, interim or special audit of the financial statements of Holdings and its Subsidiaries made by such accountants, including any comment letter submitted by such accountants to management in connection with their annual audit;

 

(l)                                     [RESERVED]

 

(m)                               Environmental Reports and Audits.  As soon as practicable following receipt thereof, copies of all environmental audits and reports, whether prepared by personnel of Company or any of its Subsidiaries or by independent consultants, with respect to environmental matters at any Facility or which relate to any environmental liabilities of Holdings or its Subsidiaries which, in any such case, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

 

(n)                                 Other Information.  (A) Promptly upon their becoming available, copies of (i) all financial statements, reports, notices and proxy statements sent or made available generally by Holdings to holders of its Indebtedness or to holders of its public equity securities or by any Subsidiary of Holdings to its security holders other than Holdings or another Subsidiary of Holdings, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by Holdings or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission or any governmental or private regulatory authority, (iii) all press releases and other statements made available generally by Holdings or any of its Subsidiaries to the public concerning material developments in the business of Holdings or any of its Subsidiaries, and (B) such other information and data with respect to Holdings or any of its Subsidiaries (including, without limitation, financial statements with respect to Holdings and its Subsidiaries) as from time to time may be reasonably requested by Administrative Agent or any Lender;

 

5.2                               Existence.  Except as otherwise permitted under Section 6.9, each Credit Party will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect (i) its existence and (ii) all rights and franchises, licenses and permits material to the business of Holdings and its Subsidiaries (on a consolidated basis).

 

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5.3                               Payment of Taxes and Claims.  Each Credit Party will, and will cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable which, if unpaid, might become a Lien upon any of its properties or assets; provided, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor.  No Credit Party will, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person (other than Holdings or any of its Subsidiaries).

 

5.4                               Maintenance of Properties.  Each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties owned by Holdings, Company or its Subsidiaries or used or useful in the business of Company and its Subsidiaries (including all Intellectual Property) and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof.

 

5.5                               Insurance.  Each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of Company and its Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons.  Without limiting the generality of the foregoing, each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained (a) flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors of the Federal Reserve System, and (b) replacement value casualty insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts, with such deductibles, and covering such risks as are at all times carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses.  Each such policy of insurance shall (i) name the Administrative Agent, the Collateral Agent and the Lenders as an additional insured thereunder as its interests may appear and (ii) in the case of each casualty insurance policy, contain a loss payable clause or endorsement, satisfactory in form and substance to Collateral Agent, that names the Collateral Agent, on behalf of Lenders as the loss payee thereunder and provides for at least thirty (30) days’ prior written notice to Collateral Agent of any modification or cancellation of such policy.

 

5.6                               Inspections.  Each Credit Party will, and will cause each of its Subsidiaries to, permit any authorized representatives designated by Administrative Agent, Collateral Agent or

 

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any Lender (and, in the case of any Lender, accompanied by Administrative Agent or Collateral Agent) to visit and inspect any of the properties of any Credit Party and any of its respective Subsidiaries, to inspect the Collateral, or otherwise to inspect, copy and take extracts from its and their financial and accounting records, and to discuss its and their properties, assets, affairs, finances and accounts with its and their officers and independent public accountants (it being understood that, prior to the occurrence and continuance of an Event of Default, (x) any such discussions or meetings shall be limited to Administrative Agent and (y) in the case of discussions or meetings with the independent public accountants, only if Company has been given the opportunity to participate in such discussions or meetings), all upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested.

 

5.7                               Lenders Meetings.  Holdings and Company will, upon the request of Administrative Agent or Requisite Lenders, participate in a meeting of Administrative Agent and Lenders once during each calendar year to be held at Company’s corporate offices (or at such other location as may be agreed to by Company and Administrative Agent) at such time as may be agreed to by Company and Administrative Agent.

 

5.8                               Compliance with Laws.  Each Credit Party will comply, and shall cause each of its Subsidiaries to comply, with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including all Environmental Laws), noncompliance with which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

5.9                               Environmental.

 

(a)                                  Environmental Disclosure.  Each Credit Party will, and will cause each of its Subsidiaries to, deliver to Administrative Agent and Lenders:

 

(i)                                     as soon as practicable following receipt thereof, copies of all material environmental audits, investigations, analyses and reports of any kind or character, whether prepared by personnel of Holdings or any of its Subsidiaries or by independent consultants, governmental authorities or any other Persons, with respect to significant environmental matters at any Facility or with respect to any Environmental Claims; providedhowever, that this Section 5.9(a)(i) shall not apply to communications covered by valid claims of attorney client privilege or to attorney work product generated by legal counsel to Holdings or any of its Subsidiaries;

 

(ii)                                  promptly upon the occurrence thereof, written notice describing in reasonable detail (1) any Release required to be reported to any

 

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federal, state or local governmental or regulatory agency under any applicable Environmental Laws, (2) any remedial action taken by Holdings or any other Person in response to (A) any Hazardous Materials Activities the existence of which has a reasonable possibility of resulting in one or more Environmental Claims having, individually or in the aggregate, a Material Adverse Effect, or (B) any Environmental Claims that, individually or in the aggregate, have a reasonable possibility of resulting in a Material Adverse Effect, and (3) Holdings or any of its Subsidiaries’ discovery of any occurrence or condition on any real property adjoining or in the vicinity of any Facility that could cause such Facility or any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws;

 

(iii)                               as soon as practicable following the sending or receipt thereof by Holdings or any of its Subsidiaries, a copy of any and all written communications to or from any Governmental Authority or any Person bringing an Environmental Claim against Holdings or any of its Subsidiaries with respect to: (1) any Environmental Claims that, individually or in the aggregate, have a reasonable possibility of giving rise to a Material Adverse Effect, (2) any Release required to be reported to any Governmental Authority, and (3) any written request for information from any Governmental Authority stating such Governmental Authority is investigating whether Holdings or any of its Subsidiaries may be potentially responsible for any Hazardous Materials Activity; and

 

(iv)                              with reasonable promptness, such other documents and information as from time to time may be reasonably requested by Administrative Agent in relation to any matters disclosed pursuant to this Section 5.9(a).

 

(b)                                 Hazardous Materials Activities, Etc.  Each Credit Party shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all actions necessary to (i) cure any violation of applicable Environmental Laws by such Credit Party or its Subsidiaries that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (ii) make an appropriate response to any Environmental Claim against such Credit Party or any of its Subsidiaries and discharge any obligations it may have to any Person thereunder where failure to do so would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

5.10                        Subsidiaries.  In the event that any Person becomes a Domestic Subsidiary of Company, Company shall (a) promptly, and in any event within ten (10) days, cause such

 

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Domestic Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and Security Agreement by executing and delivering to Administrative Agent and Collateral Agent a Counterpart Agreement, and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all Perfection Deliverables and such documents, instruments, agreements, opinions and certificates as are similar to those described in Sections 3.1(b) and 3.1(f), and any other actions required by the Pledge and Security Agreement.  In the event that any Person becomes a Foreign Subsidiary of Company, and the ownership interests of such Foreign Subsidiary are owned by Company or by any Domestic Subsidiary thereof, Company shall, or shall cause such Domestic Subsidiary to, promptly, and in any event within ten (10) days, deliver all such documents, instruments, agreements, and certificates as are similar to those described in Section 3.1(b), and Company shall take, or shall cause such Domestic Subsidiary to take, all of the actions referred to in clause (i) of the definition of “Perfection Deliverables” necessary to grant and to perfect a First Priority of Second Priority Lien (in accordance with the priorities set forth in the Intercreditor Agreement) in favor of Collateral Agent, for the benefit of Secured Parties, under the Pledge and Security Agreement in 66% of such ownership interests.  With respect to each such Subsidiary, Company shall promptly send to Administrative Agent written notice setting forth with respect to such Person (i) the date on which such Person became a Subsidiary of Company, and (ii) all of the data required to be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of Company; provided, such written notice upon Administrative Agent’s approval of the contents therein shall be deemed to supplement Schedule 4.1 and 4.2 for all purposes hereof.  Notwithstanding anything to the contrary in this Section 5.10, the requirements of this Section 5.10 shall not apply to any property or Subsidiary created or acquired after the Closing Date, as to which the Collateral Agent has determined in its sole discretion that the collateral value thereof is insufficient to justify the difficulty, time and/or expense of obtaining a perfected security interest therein.  The Collateral Agent is hereby authorized by the Lenders to enter into such amendments to the Collateral Documents as the Collateral Agent deems necessary to effectuate the provisions of this Section 5.10.

 

5.11                        Additional Real Estate Assets.  In the event that any Credit Party acquires, or any Person that becomes a Credit Party holds, a Real Estate Asset that is (a) a fee interest with a fair market value equal to or greater than $500,000 or (b) a leasehold interest with a value that Administrative Agent in its sole discretion, after consultation with Company, determines is material, and such interest has not otherwise been made subject to a perfected First Priority or Second Priority Lien (in accordance with the priorities set forth in the Intercreditor Agreement) of the Collateral Documents in favor of Collateral Agent, for the benefit of Secured Parties, then such Credit Party shall, promptly, and in any event within ten (10) days of such Credit Party acquiring such Real Estate Asset or such Person becoming a Credit Party, take all such actions and execute and deliver, or cause to be executed and delivered, all Real Estate Asset Deliverables and Perfection Deliverables with respect to each such Real Estate Asset to create in favor of Collateral Agent, for the benefit of Secured Parties, a valid and, subject to any filing and/or recording referred to herein, perfected First Priority or Second Priority Lien (in accordance with the priorities set forth in the Intercreditor Agreement) in such Real Estate Assets, and reports and other information reasonably satisfactory to Administrative Agent regarding environmental matters (including, without limitation, a Phase I Report) with respect to such Real Estate Assets.  In addition to the foregoing, Company shall, at the request of Requisite Lenders, deliver, from time to time (but, prior to the occurrence and during the continuance of a

 

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Default or Event of Default, not more than once every two calendar years), to Administrative Agent such appraisals of Real Estate Assets with respect to which Collateral Agent has been granted a Lien.  Notwithstanding anything to the contrary in this Section 5.11, the requirements of this Section 5.11 shall not apply to any Real Estate Asset acquired after the Closing Date, as to which the Collateral Agent has determined in its sole discretion that the collateral value thereof is insufficient to justify the difficulty, time and/or expense of obtaining a perfected security interest therein.  The Collateral Agent is hereby authorized by the Lenders to enter into such amendments to the Collateral Documents as the Collateral Agent deems necessary to effectuate the provisions of this Section 5.11.

 

5.12                        [Reserved].

 

5.13                        Further Assurances.  At any time or from time to time upon the request of Administrative Agent or Collateral Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as Administrative Agent or Collateral Agent may reasonably request in order to effect fully the purposes of the Credit Documents.  In furtherance and not in limitation of the foregoing, each Credit Party shall take such actions as Administrative Agent or Collateral Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the Guarantors and are secured by substantially all of the assets of Holdings, and its Subsidiaries and all of the outstanding Capital Stock of Company and its Subsidiaries (in each case subject to limitations contained in the Credit Documents with respect to Foreign Subsidiaries).

 

5.14                        ERISA.  Neither Holdings, its Subsidiaries or their respective ERISA Affiliates shall establish, maintain, contribute to, or become required to contribute to any Multiemployer Plan.

 

5.15                        Maintenance of Credit Rating.  Holdings shall use its commercially reasonable efforts (including the timely payment of all customary amounts and the timely submission of all customary documentation) to ensure that (i) the credit facility provided for under this Agreement shall at all times have a credit rating assigned by S&P and Moody’s and (ii) the Borrower shall at all times have a corporate credit rating assigned by S&P and Moody’s; provided, however, that in the event either S&P or Moody’s ceases to exist, ceases to be in the business of issuing ratings in respect of credit facilities, or the rating of such facilities is not otherwise obtainable from such agencies, then Holdings shall use its commercially reasonable efforts (including the timely payment of all customary amounts and the timely submission of all customary documentation) to ensure that such facilities are rated by another nationally recognized statistical rating agency acceptable to Administrative Agent.

 

SECTION 6.                            NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Commitment is in effect and until payment in full of all Obligations, such Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 6.

 

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6.1                               Indebtedness.  Each of Holdings and Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

 

(a)                                  the Obligations;

 

(b)                                 Company may become and remain liable with respect to Indebtedness to any of its wholly-owned Guarantor Subsidiaries, and any wholly-owned Guarantor Subsidiary of Company may become and remain liable with respect to Indebtedness to Company or any other wholly-owned Guarantor Subsidiary of Company; provided, (i) all such Indebtedness under this subclause (b) shall be (x) evidenced by promissory notes and all such notes shall be subject to a First Priority or Second Priority Lien (in accordance with the priorities set forth in the Intercreditor Agreement) pursuant to the Pledge and Security Agreement and (y) unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of the applicable promissory notes or an intercompany subordination agreement that in any such case, is reasonably satisfactory to Administrative Agent, and (ii) any payment by any such Subsidiary under any guaranty of the Obligations shall result in a pro tanto reduction of the amount of any Indebtedness owed by such Subsidiary to Company or to any of its Subsidiaries for whose benefit such payment is made;

 

(c)                                  [RESERVED];

 

(d)                                 Indebtedness of Company and its Subsidiaries arising in respect of netting services or overdraft protections with deposit accounts; provided, that such Indebtedness is extinguished within three (3) Business Days of its incurrence;

 

(e)                                  guaranties by Company of Indebtedness of a Guarantor Subsidiary or guaranties by a Subsidiary of Company of Indebtedness of Company or a Guarantor Subsidiary with respect, in each case, to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.1;

 

(f)                                    Indebtedness of Company and its Subsidiaries existing on the Closing Date and described in Schedule 6.1, but not any extensions, renewals, refinancings or replacements of such Indebtedness except (i) renewals and extensions expressly provided for in the agreements evidencing any such Indebtedness as the same are in effect on the date of this Agreement and (ii) refinancings and extensions of any such Indebtedness if the terms and conditions thereof are not materially less favorable (taken as a whole) to the obligor thereon or to the Lenders than the Indebtedness being refinanced or extended, and the average life to maturity thereof is greater than or equal to that of the Indebtedness being refinanced or extended; provided, such Indebtedness permitted under the immediately preceding clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that was not an obligor with respect to the

 

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Indebtedness being extended, renewed or refinanced or (B) exceed in a principal amount the Indebtedness being renewed, extended or refinanced;

 

(g)                                 purchase money Indebtedness of Company and its Subsidiaries and Capital Leases (other than in connection with sale-leaseback transactions) of Company and its Subsidiaries, in each case incurred in the ordinary course of business to provide all or a portion of the purchase price or cost of construction of an asset or an improvement of an asset not constituting part of the Collateral; provided, that (A) such Indebtedness when incurred shall not exceed the purchase price or cost of improvement or construction of such asset, (B) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing, (C) such Indebtedness shall be secured only by the asset acquired, constructed or improved in connection with the incurrence of such Indebtedness and (D) the aggregate principal amount of all such Indebtedness shall not exceed $7,500,000 at any time outstanding;

 

(h)                                 other Indebtedness of Company and its Subsidiaries, which is unsecured, in an aggregate principal amount not to exceed $10,000,000 at any time outstanding;

 

(i)                                     Indebtedness of Company under any Interest Rate Agreement or Currency Agreement entered into for hedging purposes and in form and substance reasonably satisfactory to the Administrative Agent;

 

(j)                                     Indebtedness evidenced by the Revolving Credit Documents in an aggregate amount not to exceed an amount equal to $60.0 million (less the amount of all permanent reductions of the Revolving Loan Commitments (as defined in the Revolving Credit Facility)) and any Permitted Refinancing of the Revolving Credit Facility;

 

(k)                                  additional senior unsecured or subordinated unsecured Indebtedness, the terms and conditions of which (i) shall provide for a maturity date no earlier than 180 days after the Additional Term Loan Maturity Date hereunder and with no scheduled amortization or other scheduled payments of principal prior to such date and (ii) shall be reasonably satisfactory to Administrative Agent; provided, that (A) after giving pro forma effect to the incurrence of such Indebtedness (and, if applicable, giving pro forma effect to any Subject Transaction pursuant to Section 6.8(c)), (1) the Leverage Ratio is not greater than 4.0 to 1.0 or (2) the Consolidated Coverage Ratio is at least 2.0 to 1.0 and (B) no Default or Event of Default has occurred or is continuing at the time of incurrence or would result therefrom;

 

(l)                                     Indebtedness of a Person existing at the time such Person becomes a Subsidiary of Company following the Closing Date, which Indebtedness is in existence at the time such Person becomes a Subsidiary and is not created in connection with or in contemplation of such Person becoming a Subsidiary; provided that the aggregate principal amount of all such Indebtedness in the aggregate shall not exceed $5,000,000 at any time outstanding;

 

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(m)                               Indebtedness of Holdings which is unsecured and subordinated to the Obligations in a manner satisfactory to Administrative Agent and which is issued in connection with the redemption or replacement of any preferred Capital Stock of Holdings, in principal amount not to exceed the amount of such preferred Capital Stock being redeemed or replaced, the terms and conditions of which (i) shall provide for a maturity date at least one year after the Additional Term Loan Maturity Date hereunder, with no scheduled amortization of principal or mandatory prepayments prior to such date, (ii) no scheduled or mandatory cash interest payments prior to such date, except to the extent Holdings has sufficient cash therefor and (iii) shall otherwise be satisfactory to Administrative Agent;

 

(n)                                 Capital Leases of Company entered into in connection with sale-leaseback transactions permitted by Section 6.3; provided, that (A) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing and (B) such Indebtedness shall be secured only by the facility which is the subject of such Capital Lease; and

 

(o)                                 additional secured Indebtedness, the terms and conditions of which (i) shall provide for a maturity date at least 180 days after the Additional Term Loan Maturity Date hereunder with no scheduled amortization of principal prior to such date, (ii) unless reasonably satisfactory to the Administrative Agent pursuant to clause (iii) below, shall be no more restrictive (without taking into account fees or interest rates), taken as a whole, than those set forth in the Term Loan Documents as in effect on the Closing Date, and (iii) shall otherwise be reasonably satisfactory to Administrative Agent; provided, that (A) after giving pro forma effect to the incurrence of such Indebtedness (and, if applicable, giving pro forma effect to any Subject Transaction pursuant to Section 6.8(c)), the Secured Debt Ratio is less than 2.5 to 1.0 and (B) no Default or Event of Default has occurred or is continuing at the time of incurrence or would result therefrom.

 

6.2                               Liens.  Each of Holdings and Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Holdings, Company or any such Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, except:

 

(a)                                  Liens in favor of Collateral Agent for the benefit of Secured Parties granted pursuant to any Credit Document;

 

(b)                                 Liens imposed by law for Taxes that are not yet required to be paid pursuant to Section 5.3;

 

(c)                                  statutory Liens of landlords, banks (and rights of set-off), of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by

 

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law (other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case incurred in the ordinary course of business (i) for amounts not yet overdue or (ii) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of five (5) days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts;

 

(d)                                 deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any portion of the Collateral on account thereof;

 

(e)                                  easements, rights-of-way, restrictions, encroachments, minor defects or irregularities in title and other similar charges, in each case which do not and will not interfere in any material respect with the use or value thereof or which appear on a title report delivered to Administrative Agent prior to the date hereof;

 

(f)                                    any interest or title of a lessor or sublessor under any operating or true lease of real estate entered into by Company or its Subsidiaries in the ordinary course of its business covering only the assets so leased;

 

(g)                                 purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business;

 

(h)                                 any attachment or judgment Lien not constituting an Event of Default under Section 8.1(h);

 

(i)                                     non-exclusive licenses of Intellectual Property granted by Company or any of its Subsidiaries in the ordinary course of business consistent with past practice and not interfering in any respect with the ordinary conduct of the business of Company or such Subsidiary;

 

(j)                                     bankers liens and rights of set-off with respect to customary depositary arrangements entered into in the ordinary course of business of Company and its Subsidiaries;

 

(k)                                  Liens granted by Company or its Subsidiaries existing on the Closing Date and described in Schedule 6.2; provided, that (A) no such Lien shall at any time be extended to

 

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cover property or assets other than the property or assets subject thereto on the Closing Date and (B) the principal amount of the Indebtedness secured by such Liens shall not be extended, renewed, refunded, replaced or refinanced except as otherwise permitted by Section 6.1(f);

 

(l)                                     Liens securing (i) Indebtedness permitted pursuant to Section 6.1(g), provided, any such Lien shall encumber only the asset acquired, constructed or improved with the proceeds of such Indebtedness and (ii) Indebtedness permitted pursuant to Section 6.1(n), provided any such Lien shall encumber only the facility with is the subject of such Capital Lease;

 

(m)                               Liens securing Indebtedness permitted under Section 6.1(l); provided that such Liens are of a type described in Section 6.2(l)(i) and are not created in contemplation of or in connection with such Person becoming a Subsidiary, such Liens will not apply to any other property of Holdings or any of its Subsidiaries, and such Liens will secure only those obligations secured by such Liens on the date such Person becomes a Subsidiary; and

 

(n)                                 Liens securing Indebtedness permitted under Section 6.1(j) or 6.1(o).

 

6.3                               Sales and Leasebacks.  Each of Holdings and Company shall not, and shall not permit any of its Subsidiaries to directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease, whether an operating lease or a Capital Lease, of any property (whether real, personal or mixed), whether now owned or hereafter acquired, (a) which Holdings or any of its Subsidiaries has sold or transferred or is to sell or transfer to any other Person (other than Holdings or any of its Subsidiaries) or (b) which Holdings or any of its Subsidiaries intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by such Credit Party to any Person (other than Holdings or any of its Subsidiaries) in connection with such lease; provided that Company and its Subsidiaries may (i) become and remain liable as lessee, guarantor or other surety with respect to any such lease which is a Capital Lease permitted pursuant to Section 6.1(g), and (ii) so long as no Default or Event of Default has occurred or is continuing or shall be caused thereby, sale-leaseback transactions in respect of up to any manufacturing Facilities owned by Company as of the Closing Date; provided, further, that (A) the material terms and conditions of such sale-leaseback transaction (including any Capital Lease in connection with such transaction) shall be reasonably satisfactory to the Administrative Agent, (B) Collateral Agent is granted a valid First Priority or Second Priority Lien (in accordance with the priorities set forth in the Intercreditor Agreement) in Company’s leasehold interest in connection with such transaction, (C) the lessor (or lenders under any Capital Lease) in connection with such transaction shall agree to provide Collateral Agent access to the Collateral located at such facility pursuant to an agreement reasonably satisfactory to Administrative Agent and the Collateral Agent (the terms of which shall include subordination and non-disturbance provisions with respect to any such Collateral, and other terms as may be reasonably required by Administrative Agent or the Collateral Agent), (D) the amount of consideration payable to Company or its Subsidiaries (and the aggregate principal amount of Indebtedness in respect of any Capital Leases) in any such transaction shall not exceed the fair market value of any such facility (determined in good faith by the board of directors of Company (or similar governing body)), and shall not exceed $30,000,000 in the

 

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aggregate and (E) the Net Asset Sale Proceeds with respect to any such Capital Lease shall be applied to repay Indebtedness to the extent required pursuant to Section 2.14(b).

 

6.4                               No Further Negative Pledges.  Except (i) pursuant to this Agreement, (ii) pursuant to the terms of Indebtedness permitted under Section 6.1(h), 6.1(j), 6.1(k) or 6.1(o), (iii) with respect to specific property encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to a permitted Asset Sale, (iv) pursuant to customary non-assignment or no-subletting clauses in leases, licenses or contracts entered into in the ordinary course of business, which restrict only the assignment of such lease, license or contract, as applicable, or (v) in connection with purchase money financing or Capital Leases permitted under Section 6.1(g), 6.1(l) or 6.1(n) (in each case provided the prohibition applies only to the asset being acquired or constructed, or which is the subject of such Capital Lease), each of Holdings and Company shall not, and shall not permit any of its Subsidiaries to, enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired.

 

6.5                               Restricted Payments.  Each of Holdings and Company shall not, and shall not permit any of its Subsidiaries or Affiliates through any manner or means or through any other Person to, directly or indirectly, declare, order, pay, make or set apart, or agree to declare, order, pay, make or set apart, or agree to declare, order, pay, make or set apart, any sum for any Restricted Payment except that:

 

(a)                                  Subsidiaries of Company may make Restricted Payments (i) to Company or to any parent entity of such Subsidiary which is a wholly-owned Guarantor Subsidiary and (ii) on a pro rata basis to the equity holders of any other Guarantor Subsidiary;

 

(b)                                 (i) so long as no Default or Event of Default shall have occurred and be continuing or shall be caused thereby, Company and its Subsidiaries may make prepayments and regularly scheduled payments of principal and interest in respect of any Indebtedness permitted under Sections 6.1(b), (ii) Company and its Subsidiaries may make scheduled payments and mandatory prepayments of principal, and regularly scheduled payments of interest in respect of and, so long as no Default or Event of Default shall have occurred and be continuing, voluntary repayments of, any Indebtedness permitted under Section 6.1(h), (iii) Company and its Subsidiaries may make mandatory prepayments and regularly scheduled payments of principal and interest in respect of any Indebtedness permitted under Section 6.1(k) (to the extent constituting subordinated Indebtedness) or 6.1(n), but only to the extent such payments are permitted by the terms, and subordination provisions (if any) applicable to, such Indebtedness, and (iv) Company and its Subsidiaries may make payments in respect of guarantees permitted under Section 6.1(e) to the extent the Indebtedness guaranteed thereby is permitted to be paid under this Section 6.5 (in each case under the foregoing subclauses (i), (ii) and (iii) in accordance with the terms of, and only to the extent required by, and subject to the subordination provisions contained in, the indenture or other agreement pursuant to which such Indebtedness as issued);

 

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(c)                                  Company may make Restricted Payments to Holdings to the extent reasonably necessary to permit Holdings (in each case so long as Holdings applies the amount of any such Restricted Payment for such purpose within five (5) days of receipt of such amount) (i) to pay general administrative and corporate overhead costs and expenses (including, without limitation, expenses arising by virtue of Holdings’ status as a public company (including fees and expenses related to filings with the Securities and Exchange Commission, roadshow expenses, printing expenses and fees and expenses of attorneys and auditors)), (ii) so long as no Default or Event of Default, in each case, in respect of Section 8.1(a), 8.1(f) or 8.1(g) shall have occurred and be continuing or shall be caused thereby, to pay the fees and expenses to Sponsor required to be paid under the Management Services Agreement, as in effect on December 16, 2004 or after giving effect to any amendment, restatement or other modification thereto in accordance with Section 6.15(a) hereof, (iii) to discharge the consolidated tax liabilities of Holdings and its Subsidiaries and (iv) so long as no Default or Event of Default shall have occurred and be continuing or shall be caused thereby, to allow Holdings to repurchase shares of, or options to purchase shares of, Capital Stock of Holdings from employees, officers or directors of Holdings, Company or any Subsidiaries thereof in any aggregate amount not to exceed $1,000,000 in any calendar year or $5,000,000 in the aggregate since the Closing Date;

 

(d)                                 (i) Company may make Restricted Payments to Holdings in an aggregate amount not to exceed the Restricted Payment Amount (measured on the date of such Restricted Payment); provided that, notwithstanding the foregoing, in any four Fiscal Quarter period, the Company may make Restricted Payments to Holdings in an amount not to exceed the Periodic Dividend Amount; provided further, that, in any case, any Restricted Payment under this Section 6.5(d)(i) may only be made so long as (w) no Default or Event of Default has occurred or is continuing or shall be caused thereby after giving effect to such Restricted Payment, (x) after giving effect to such Restricted Payment, Holdings and its Subsidiaries shall have satisfied the RP Conditions, (y) to the extent Consolidated Adjusted EBITDA for the Test Period most recently ended prior to such Restricted Payment is less than or equal to $40,000,000, after giving effect to such Restricted Payment, the total amount of Restricted Payments made pursuant to this Section 6.5(d)(i) during the Fiscal Quarter in which the subject Restricted Payment is to be paid and the three Fiscal Quarters most recently ended does not exceed any applicable Maximum Restricted Payment Amount, and (z) a Section 6.5(d) Certificate has been delivered; and (ii) Holdings may make Restricted Payments in an amount equal to the actual amount of Restricted Payments made by Company to Holdings pursuant to Section 6.5(d)(i) that have not previously been distributed by Holdings, so long as no Default or Event of Default shall have occurred and be continuing or shall be caused thereby; provided, however, that notwithstanding anything to the contrary contained in this Section 6.5(d), this Section 6.5(d)(ii) shall not prohibit the payment of any dividend within 60 days after the date of declaration of such dividend if such dividend was permitted under this Section 6.5(d)(ii) on the date of declaration;

 

(e)                                  (i) so long as no Default or Event of Default, in each case, in respect of Sections 8.1(a), 8.1(f) or 8.1(g) shall have occurred and be continuing or shall be caused thereby, Holdings may make Restricted Payments to Sponsor to the extent of Restricted Payments received by Holdings from Company pursuant to Sections 6.5(c)(ii) and (ii) so long as no Default or Event of Default shall have occurred and be continuing or shall be caused thereby, Holdings

 

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may make Restricted Payments (x) as described in Section 6.5(c)(iv) and (y) in respect of Indebtedness permitted by Section 6.1(m) and in connection with the redemption or replacement of any preferred Capital Stock of Holdings described in Section 6.1(m);

 

(f)                                    additional Restricted Payments in an aggregate amount not to exceed at any time outstanding $10,000,000 (minus any Investments made pursuant to Section 6.7(l)), if no Default or Event of Default has occurred or is continuing or would result therefrom; provided that any Restricted Payment made pursuant this Section 6.5(f) may not subsequently be characterized as a Restricted Payment made pursuant to any other provision of this Agreement; and

 

(g)                                 if no Default or Event of Default has occurred or is continuing or would result therefrom, additional Restricted Payments in an aggregate amount not to exceed $25,000,000, which Restricted Payments are funded exclusively by Holdings Equity Proceeds that have not been applied to any other purpose; provided that any Restricted Payment made pursuant this Section 6.5(g) may not subsequently be characterized as a Restricted Payment made pursuant to any other provision of this Agreement.

 

6.6                               Restrictions on Subsidiary Distributions.  Each of Holdings and Company shall not, and shall not permit any of its 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 Subsidiary of Company to (a) pay dividends or make any other distributions on any of such Subsidiary’s Capital Stock owned by Company or by any other Subsidiary of Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to Company or to any other Subsidiary of Company, (c) make loans or advances to Company or to any other Subsidiary of Company, or (d) transfer any of its property or assets to Company or to any other Subsidiary of Company other than restrictions (i) existing under this Agreement or the Revolving Credit Documents (as in effect on the Closing Date), (ii) in agreements evidencing Indebtedness permitted by Sections 6.1(g) and 6.1(l) that impose restrictions on the property so acquired, (iii) by reason of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, Joint Venture agreements and similar agreements entered into in the ordinary course of business, (iv) restrictions in agreements evidencing Indebtedness secured by Liens permitted by Section 6.2(m) that impose restrictions on the property securing such Indebtedness, (v) customary restrictions on assets that are the subject of an Asset Sale permitted by Section 6.9 or a Capital Lease permitted by Section 6.1(n) and (vi) in agreements evidencing Indebtedness permitted by Section 6.1(h) or 6.1(k), in each case, so long as such restrictions are not more restrictive, taken as a whole, than the restrictions set forth in this Agreement.

 

6.7                               Investments.  Each of Holdings and Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make or own any Investment in any Person, including without limitation any Joint Venture, except:

 

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(a)                                  Investments in Cash and Cash Equivalents;

 

(b)                                 Investments by Holdings in Company;

 

(c)                                  Investments made by Company or any of its Subsidiaries in Subsidiary Guarantors which are wholly-owned Subsidiaries of Company;

 

(d)                                 Investments received by Company or any of its Subsidiaries in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers or suppliers of such Person, in each case in the ordinary course of business;

 

(e)                                  accounts receivable arising, and trade credit granted, in the ordinary course of business of Company and its Subsidiaries, and any Securities received by Company or any of its Subsidiaries in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss, and any prepayments and other credits to suppliers made in the ordinary course of business;

 

(f)                                    intercompany loans to the extent permitted under Section 6.1(b);

 

(g)                                 Consolidated Capital Expenditures by Company or any of its Subsidiaries permitted by Section 6.8(b) of the Revolving Credit Facility;

 

(h)                                 loans and advances by Company or any of its Subsidiaries to employees of Company and its Subsidiaries made in the ordinary course of business in an aggregate principal amount not to exceed $2,000,000 at any time outstanding;

 

(i)                                     Investments by Company or any of its Subsidiaries made in connection with Permitted Acquisitions permitted pursuant to Section 6.9(d);

 

(j)                                     Investments by Company or any of its Subsidiaries constituting non-Cash consideration received by Company and its Subsidiaries in connection with permitted Asset Sales pursuant to subsection 6.9(c);

 

(k)                                  Company and its Subsidiaries may continue to own the Investments owned by them as of the Closing Date and described in Schedule 6.7;

 

(l)                                     other Investments by Company or any of its Subsidiaries in an aggregate amount not to exceed at any time outstanding $10,000,000 (minus any Restricted Payments

 

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made pursuant to Section 6.5(f)), if no Default or Event of Default has occurred or is continuing or would result therefrom; and

 

(m)                               additional Investments by Company or any of its Subsidiaries in an aggregate amount not to exceed the Restricted Payment Amount so long as (i) no Default or Event of Default has occurred or is continuing or shall be caused thereby after giving effect to such Investment and (ii) after giving effect to such Investment, the Company and its Subsidiaries shall have satisfied the Investment Conditions.

 

Notwithstanding the foregoing, in no event shall any Credit Party make any Investment which results in or facilitates in any manner any Restricted Payment not otherwise permitted under the terms of Section 6.5.

 

6.8                               Calculations.

 

(a)                                  [RESERVED]

 

(b)                                 [RESERVED]

 

(c)                                  Certain Calculations.

 

(i)                                     With respect to any period during which a Permitted Acquisition or an Asset Sale has occurred (each, a Subject Transaction), for purposes of determining the Leverage Ratio calculation in Section 6.1(k), Consolidated Adjusted EBITDA and the components of Consolidated Fixed Charges, as applicable, shall be calculated with respect to such period on a pro forma basis (including pro forma adjustments arising out of events which are directly attributable to a specific transaction, are factually supportable and are expected to have a continuing impact, in each case determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the Securities and Exchange Commission, which would include cost savings resulting from head count reduction, closure of Facilities and similar restructuring charges, which pro forma adjustments shall be certified by the chief financial officer of Company) using the historical audited financial statements of any business so acquired or to be acquired or sold or to be sold and the consolidated financial statements of Holdings and its Subsidiaries which shall be reformulated as if such Subject Transaction, and any Indebtedness incurred or repaid in connection therewith, had been consummated or incurred or repaid at the beginning of such period.

 

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(ii)                                  With respect to any period commencing prior to the Closing Date, Consolidated Adjusted EBITDA shall be calculated with respect to the portion of such period prior to the Closing Date based on the historical Consolidated Adjusted EBITDA of the Company during such time, Consolidated Capital Expenditures shall be calculated with respect to the portion of such period prior to the Closing Date based on the historical Consolidated Capital Expenditures of the Company during such time, and the other components of Consolidated Fixed Charges (other than Consolidated Interest Expense) shall be calculated with respect to the portion of such period prior to the Closing Date on a pro forma basis as if the Closing Date occurred on the first day of such period.

 

(iii)                               With respect to any period commencing prior to the Closing Date, Consolidated Interest Expense shall be calculated with respect to the portion of such period prior to the Closing Date on a pro forma basis as if the Closing Date occurred on the first day of such period (and assuming that the Indebtedness incurred on the Closing Date was incurred on the first day of such period and, such Indebtedness bears interest during the portion of such period prior to the Closing Date at the weighted average of the interest rates applicable to outstanding Indebtedness during the portion of such period on and after the Closing Date and that no Indebtedness was repaid during the portion of such period prior to the Closing Date).

 

6.9                               Fundamental Changes; Asset Dispositions; Acquisitions.  Each of Holdings and Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into any transaction of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now owned or hereafter acquired, or acquire by purchase or otherwise the business, or all or substantially all of the property or fixed assets of, or stock or other evidence of beneficial ownership of, any Person or any division or line of business or other business unit of any Person, except:

 

(a)                                  any Subsidiary of Holdings may be merged with or into Company or with or into any wholly-owned Guarantor Subsidiary of Company, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Company or any wholly-owned Guarantor Subsidiary of Company; provided, in the case of such a merger, Company or such wholly-owned Guarantor Subsidiary of Company, as applicable shall be the continuing or surviving Person;

 

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(b)                                 sales or other dispositions of assets that do not constitute Asset Sales;

 

(c)                                  Asset Sales, the proceeds of which (valued at the principal amount thereof in the case of non-Cash proceeds consisting of notes or other debt Securities and valued at fair market value in the case of other non-Cash proceeds) (i) do not exceed $5,000,000 in the aggregate in any calendar year and (ii) when aggregated with the proceeds of all other Asset Sales, do not exceed $15,000,000 in the aggregate from the Closing Date to the date of determination; provided (1) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof (and in respect of a transaction of greater than $2,500,000, as determined in good faith by the board of directors of Company (or similar governing body)), (2) no less than 80% thereof shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall be applied as required by Section 2.13(a);

 

(d)                                 Permitted Acquisitions, the consideration for which constitutes either (i) common Capital Stock of Holdings or (ii) (x) no more than $20,000,000 in the aggregate in any calendar year unless (and subject to clause (y) below) before and after giving effect to any such Permitted Acquisitions the Fixed Charge Coverage Ratio is at least 1.0 to 1.0 for the four Fiscal Quarter period most recently ended, calculated to give effect to such Permitted Acquisition in accordance with Section 6.8(c) as if such Permitted Acquisition occurred on the first day of such four Fiscal Quarter period, as demonstrated in a Fixed Charge Coverage Compliance Certificate delivered to the Administrative Agent prior to such Permitted Acquisition, and (y) no more than $60,000,000 in the aggregate from the Closing Date;