EXHIBIT 10.2
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Published CUSIP Number: ______________
TERM LOAN CREDIT AGREEMENT
Dated as of June 1, 2004
among
XXXXX OF XXXX L.P., A TEXAS LIMITED PARTNERSHIP
as the Borrower,
XXXXX OF XXXX LIMITED, A BERMUDA COMPANY,
BANC OF AMERICA MEZZANINE CAPITAL, LLC
as Administrative Agent,
and
The Other Lenders Party Hereto
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms.................................................................... 1
1.02 Other Interpretive Provisions.................................................... 15
1.03 Accounting Terms................................................................. 16
1.04 Rounding......................................................................... 16
1.05 Times of Day..................................................................... 16
ARTICLE II. TERM LOAN AND PAYMENTS
2.01 Term Loan........................................................................ 16
2.02 The Borrowing, Conversions and Continuations of Term Loan........................ 16
2.03 Prepayments...................................................................... 17
2.04 Repayment of Term Loan........................................................... 18
2.05 Interest......................................................................... 18
2.06 Computation of Interest and Fees................................................. 18
2.07 Evidence of Debt................................................................. 19
2.08 Payments Generally; Administrative Agent's Clawback.............................. 19
2.09 Sharing of Payments by Lenders................................................... 20
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes............................................................................ 21
3.02 Illegality....................................................................... 22
3.03 Inability to Determine Rates..................................................... 22
3.04 Increased Costs; Reserves on Eurodollar Rate Loans............................... 23
3.05 Compensation for Losses.......................................................... 24
3.06 Mitigation Obligations; Replacement of Lenders................................... 24
3.07 Survival......................................................................... 25
ARTICLE IV. CONDITIONS PRECEDENT TO Borrowing
4.01 Conditions of Borrowing.......................................................... 25
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws......................... 26
5.02 Authorization; No Contravention.................................................. 26
5.03 Governmental Authorization; Other Consents....................................... 27
5.04 Binding Effect................................................................... 27
5.05 Financial Statements; No Material Adverse Effect................................. 27
5.06 Litigation....................................................................... 27
5.07 No Default....................................................................... 27
5.08 Ownership of Property; Liens..................................................... 27
5.09 Environmental Compliance......................................................... 28
5.10 Insurance........................................................................ 28
5.11 Taxes............................................................................ 28
5.12 ERISA Compliance................................................................. 28
5.13 Subsidiaries; Equity Interests................................................... 28
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act... 29
5.15 Disclosure....................................................................... 29
5.16 Compliance with Laws............................................................. 29
5.17 Intellectual Property; Licenses, Etc............................................. 29
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5.18 Foreign Assets Control Regulations, Etc.......................................... 29
ARTICLE VI. AFFIRMATIVE COVENANTS
6.01 Financial Statements............................................................. 30
6.02 Certificates; Other Information.................................................. 30
6.03 Notices.......................................................................... 31
6.04 Payment of Obligations........................................................... 32
6.05 Preservation of Existence, Etc................................................... 32
6.06 Maintenance of Properties........................................................ 32
6.07 Maintenance of Insurance......................................................... 32
6.08 Compliance with Laws............................................................. 32
6.09 Books and Records................................................................ 32
6.10 Inspection Rights................................................................ 32
6.11 Use of Proceeds.................................................................. 33
ARTICLE VII. NEGATIVE COVENANTS
7.01 Liens............................................................................ 33
7.02 Investments...................................................................... 34
7.03 Indebtedness..................................................................... 35
7.04 Fundamental Changes.............................................................. 36
7.05 Dispositions..................................................................... 36
7.06 Restricted Payments.............................................................. 37
7.07 Change in Nature of Business..................................................... 37
7.08 Transactions with Affiliates..................................................... 37
7.09 Burdensome Agreements............................................................ 37
7.10 Use of Proceeds.................................................................. 38
7.11 Financial Covenants.............................................................. 38
7.12 Amendments of Subordinated Indebtedness.......................................... 38
7.13 Licenses......................................................................... 38
7.14 Loan Parties..................................................................... 39
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default................................................................ 39
8.02 Remedies Upon Event of Default................................................... 40
8.03 Application of Funds............................................................. 41
ARTICLE IX. ADMINISTRATIVE AGENT
9.01 Appointment and Authority........................................................ 41
9.02 Rights as a Lender............................................................... 41
9.03 Exculpatory Provisions........................................................... 42
9.04 Reliance by Administrative Agent................................................. 42
9.05 Delegation of Duties............................................................. 42
9.06 Resignation of Administrative Agent.............................................. 43
9.07 Non-Reliance on Administrative Agent and Other Lenders........................... 43
9.08 No Other Duties, Etc............................................................. 43
9.09 Administrative Agent May File Proofs of Claim.................................... 43
9.10 Guaranty Matters................................................................. 44
ARTICLE X. MISCELLANEOUS
10.01 Amendments, Etc.................................................................. 44
10.02 Notices; Effectiveness; Electronic Communication................................. 45
10.03 No Waiver; Cumulative Remedies................................................... 46
10.04 Expenses; Indemnity; Damage Waiver............................................... 46
10.05 Payments Set Aside............................................................... 47
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10.06 Successors and Assigns........................................................... 48
10.07 Treatment of Certain Information; Confidentiality................................ 49
10.08 Right of Setoff.................................................................. 50
10.09 Interest Rate Limitation......................................................... 50
10.10 Counterparts; Integration; Effectiveness......................................... 50
10.11 Survival of Representations and Warranties....................................... 51
10.12 Severability..................................................................... 51
10.13 Replacement of Lenders........................................................... 51
10.14 Governing Law; Jurisdiction; Etc................................................. 51
10.15 Waiver of Jury Trial............................................................. 52
10.16 USA PATRIOT Act Notice........................................................... 52
10.17 ENTIRE AGREEMENT................................................................. 52
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SCHEDULES
2.01 Commitments and Applicable Percentages
5.13 Subsidiaries; Other Equity Investments
7.01 Existing Liens
7.03 Existing Indebtedness
10.02 Administrative Agent's Office; Certain Addresses for Notices
EXHIBITS
FORM OF
A Term Loan Notice
B Term Loan Note
C Compliance Certificate
D Assignment and Assumption
E Guaranty
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TERM LOAN CREDIT AGREEMENT
This TERM LOAN CREDIT AGREEMENT ("Agreement") is entered into as of June
1, 2004, among XXXXX OF XXXX L.P., a limited partnership duly organized under
the laws of the State of Texas (the "Borrower"), XXXXX OF XXXX LIMITED, a
Bermuda company ("Limited"), each lender from time to time party hereto
(collectively, the "Lenders" and individually, a "Lender"), and BANC OF AMERICA
MEZZANINE CAPITAL, LLC, as Administrative Agent.
The Borrower has requested that the Lenders provide a term loan in an
aggregate principal amount of $200,000,000, and the Lenders are willing to do so
on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Acquisition" means the acquisition by any Person of (a) a majority of the
Equity Interests of another Person, (b) all or substantially all of the assets
of another Person or (c) all or substantially all of a line of business of
another Person, in each case (i) whether or not involving a merger or
consolidation with such other Person and (ii) whether in one transaction or a
series of related transactions.
"Acquisition Consideration" means the consideration given by Limited or
any of its Subsidiaries for an Acquisition, including but not limited to the sum
of (without duplication) (a) the fair market value of any cash, property
(excluding Equity Interests) or services given, plus (b) the amount of any
Indebtedness assumed, incurred or guaranteed (to the extent not otherwise
included) in connection with such Acquisition by Limited or any of its
Subsidiaries.
"Act" has the meaning specified in Section 10.17.
"Administrative Agent" means Banc of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of the total voting power of voting Equity Interests
of such first Person or any Subsidiary or such first Person or any corporation
of which such first Person and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of the total voting power of
voting Equity Interests. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and "Controlled" has
the meaning correlative thereto. Unless the context otherwise clearly requires,
any reference to an "Affiliate" is a reference to an Affiliate of Limited.
"Agreement" means this Credit Agreement.
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"Applicable Law" means (a) in respect of any Person, all provisions of
Laws applicable to such Person, and all orders and decrees of all courts and
determinations of arbitrators applicable to such Person and (b) in respect of
contracts made or performed in the State of Texas, "Applicable Law" shall also
mean the laws of the United States of America, including, without limitation in
addition to the foregoing, 12 USC Sections 85 and 86, and any other statute of
the United States of America now or at any time hereafter prescribing the
maximum rates of interest on loans and extensions of credit, and the laws of the
State of Texas.
"Applicable Percentage" means with respect to any Lender at any time, a
fraction (expressed as a percentage carried out to the ninth decimal place) the
numerator of which is the principal amount of the Term Loan held by such Lender
at such time and the denominator of which is the aggregate principal amount of
the Term Loan at such time. The initial Applicable Percentage of each Lender is
set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.
"Applicable Rate" means the following the following percentages per annum
(a) for the period from and including the Closing Date to but not including
September 1, 2004, (i) 1.125%, with respect to Eurodollar Rate Loans and (ii)
0.000%, with respect to Base Rate Loans, (b) for the period from and including
September 1, 2004 to but not including December 1, 2004, (i) 1.625%, with
respect to Eurodollar Rate Loans and (ii) 0.000%, with respect to Base Rate
Loans, (c) for the period from and including December 1, 2004 to but not
including Xxxxx 0, 0000, (x) 2.125%, with respect to Eurodollar Rate Loans and
(ii) 0.000%, with respect to Base Rate Loans and (d) from and including March 1,
2005 and thereafter, (i) 2.625%, with respect to Eurodollar Rate Loans and (ii)
0.000%, with respect to Base Rate Loans.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit D or any other form approved by the
Administrative Agent.
"Attributable Indebtedness" means, on any date, (a) in respect of any
Capital Lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of Limited and its Subsidiaries for the fiscal year ended February 29,
2004, and the related consolidated statements of income or operations,
shareholders' equity, and cash flows for such fiscal year of Limited and its
Subsidiaries, including the notes thereto.
"Bank Credit Agreement" means that certain Credit Agreement, dated as of
June 1, 2004, among Limited, the Borrower, the lenders party thereto, and Bank
of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, as
amended, modified or supplemented from time to time.
"Banc of America" means Banc of America Mezzanine Capital, LLC and its
successors.
"Bank of America, N.A." means Bank of America, N.A.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change
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in such rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Base Rate Loan" means that portion of the Term Loan that bears interest
based on the Base Rate.
"Borrower" has the meaning specified in the introductory paragraph hereto.
"Borrowing" means the initial borrowing of the Term Loan on the Closing
Date.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.
"Capital Expenditures" means, with respect to any Person for any period,
the sum of the aggregate of any expenditures by such Person during such period
for an asset which is properly classifiable in relevant financial statements of
such Person as property, equipment or improvement, fixed assets or a similar
type of tangible capital asset in accordance with GAAP.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurring of a liability in accordance with GAAP.
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means an event or series of events by which any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such
person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan) becomes the
ultimate "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934), directly or indirectly, of 50% or more of the
total voting power Voting Equity Interests of Limited, the Borrower or
HOT-Nevada, as the case may be, provided that in determining whether such
beneficial ownership has been acquired by any such "person" or "group", all
members of, or Affiliates of any of, the Current Control Group, shall be deemed
not to be persons or members of such acquiring group.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C.
"Consolidated EBITDA" means for any period the sum of Consolidated Net
Earnings for such period, plus to the extent deducted in calculating
Consolidated Net Earnings for such period: the total of (a) non-cash expenses,
such as depreciation and amortization, (b) interest expense, and (c) federal and
state income and franchise tax expenses, for Limited and its Subsidiaries, all
determined in accordance with GAAP.
"Consolidated Fixed Charges" means for any period the total of all Fixed
Charges of Limited and its Subsidiaries on a consolidated basis during such
period, and "Fixed Charges" shall mean for each such entity the sum of scheduled
principal payments (excluding voluntary prepayments), plus cash interest
expense, plus dividends/distributions and share repurchases (net of cash
received for the exercise price of options and issuance of
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Equity Interests in a capital raising transaction) made to equity owners
(other than dividends/distributions solely for the payment of federal income
taxes).
"Consolidated Funded Indebtedness" means, as of any date of determination,
for Limited and its Subsidiaries on a consolidated basis (eliminating
intercompany Indebtedness), the sum of
(a) all obligations for borrowed money and all obligations evidenced
by banks, debentures, notes, loan agreements or similar instruments;
(b) all redemption obligations in respect of Redeemable Stock;
(c) all liabilities for the deferred purchase price of property
acquired (excluding accounts payable arising in the ordinary course of business
but including all liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such property);
(d) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(e) all liabilities for borrowed money secured by any Lien with
respect to any property owned (whether or not it has assumed or otherwise become
liable for such liabilities);
(f) all outstanding reimbursement obligations in respect of letters
of credit or instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not representing
obligations for borrowed money);
(g) net obligations under all Swap Contracts; and
(h) without duplication, all Guarantees with respect to liabilities
of a type described in any of clauses (a) through (g) hereof.
"Consolidated Net Earnings" means for any period, net earnings (or loss)
after income taxes of Limited and its Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP, but not including in such net
earnings (or loss) the following:
(a) any extraordinary gain or loss arising from the sale of capital
assets;
(b) any extraordinary gain or loss arising from any write-up or
write-down of assets;
(c) net earnings of any Person in which Limited or any Subsidiary
shall have an ownership interest other than a Subsidiary unless such net
earnings (or any portion thereof) shall have actually been received by Limited
or such Subsidiary in the form of cash distributions;
(d) earnings or losses of any Subsidiary accrued prior to the date it
became a Subsidiary;
(e) any portion of the net earnings of any Subsidiary that is not a
Loan Party that by reason of any contract or charter restriction or Applicable
Law or regulation (or in the good faith judgment of the Board of Directors of
Limited for any reason) is unavailable for payment of dividends to Limited or
any of its Subsidiaries, provided that the aggregate amount of such net earnings
that could be paid to Limited or a Subsidiary by loans or advances or repayment
of loans or advances that are due beyond the Maturity Date, intercompany
transfer or otherwise will be included in Consolidated Net Earnings;
(f) the earnings or losses of any Person acquired by Limited or any
Subsidiary through purchase, merger, consolidation or otherwise, or the earnings
or losses of any Person substantially all of whose assets have been acquired by
Limited or any of its Subsidiaries, for any period prior to the date of such
acquisition;
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(g) any gain arising from the acquisition of any securities of
Limited or any of its Subsidiaries;
(h) the earnings or losses attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses Disposed of
prior to the date of determination, shall be excluded; and
(i) any other extraordinary gains or losses or any other gain or loss
arising from any event or transaction that is unusual in nature and infrequent
in occurrence (but which otherwise does not constitute an extraordinary item
under GAAP) and which GAAP requires to be reported as a separate component of
revenues and expenses from continuing operations.
"Consolidated Net Worth" means, as of any date of determination, for
Limited and its Subsidiaries on a consolidated basis, Shareholders' Equity for
Limited and its Subsidiaries as of such date.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Current Control Group" means (a) Xxxxxx X. Xxxxx, (b) the spouse,
children and lineal descendants of Xxxxxx X. Xxxxx or (c) the estate of, or any
trust for the benefit of Xxxxxx X. Xxxxx or any of the persons described in
clause (b).
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (i) the Base Rate plus (ii)
the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund its
portion of the Term Loan required to be funded by it hereunder on the Closing
Date, (b) has otherwise failed to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, and (ii) unless an Event of Default
has occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the Borrower's
Affiliates or Subsidiaries.
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"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Limited within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by Limited or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from
a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to a
Eurodollar Rate Loan (rounded upwards, as necessary, to the nearest 1/100th of
1%):
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars, which as of the Closing Date is Telerate screen 3750 (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not
appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
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such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b)
are not available, the rate per annum determined by the Administrative
Agent as the rate of interest at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would
be offered by Bank of America's London Branch to major banks in the London
interbank eurodollar market at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such Interest
Period.
"Eurodollar Rate Loan" means that portion of the Term Loan that bears
interest at a rate based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender's failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Foreign 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 the Borrower with respect to such withholding tax
pursuant to Section 3.01(a).
"Federal Funds 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 that (a) 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 (b) 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 (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means the letter agreement, dated April 29, 2004, among the
Borrower, HOT-Barbados, the Administrative Agent and the Arranger.
"Financial Projections" has the meaning specified in Section 5.05(c).
"Fixed Charge Coverage Ratio" means, as of any date of determination, the
ratio of (a) the sum of (i) Consolidated EBITDA minus (ii) cash taxes paid by
Limited and its Subsidiaries (net of tax refunds), minus (iii) Capital
Expenditures of Limited and its Subsidiaries to (b) Consolidated Fixed Charges,
in each case for the items set forth in clauses (a) and (b) above for the period
of four consecutive fiscal quarters ending on such date.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is a resident for tax
purposes. For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
7
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
"Guarantee" means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided that a
Guarantee shall exclude (A) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of such
Person's business, and (B) obligations under indemnities incurred in the
ordinary course of business or under stock purchase or asset purchase or sale
agreements, or which do not cover Indebtedness of the type described in clauses
(a) through (i) of the definition of Indebtedness. The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of
the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith. The term "Guarantee" as a verb has a corresponding
meaning.
"Guaranteed Senior Note Agreement" means that certain Amended and Restated
Note Purchase, Guaranty and Master Shelf Agreement, dated as of December 31,
1996, among the parties thereto, including Limited, the Borrower and The
Prudential Insurance Company of America, as amended, modified or supplemented
from time to time.
"Guaranteed Senior Notes" means those certain senior notes issued pursuant
to the Guaranteed Senior Note Agreement.
"Guarantied Parties" has the meaning given to such term in each Guaranty.
"Guarantors" means, collectively, Limited, HOT-Barbados, HOT-Nevada, HOT
Nevada, Inc., a Nevada corporation, Xxxxx of Xxxx Texas Corporation, a Texas
corporation, Xxxxxx Labs, Ltd., a Texas limited partnership, OXO International,
Ltd., a Texas limited partnership, and each other Subsidiary that executes a
Guaranty pursuant to Section 7.14.
"Guaranty" means any Guaranty made by one or more Guarantors in favor of
the Guarantied Parties, substantially in the form of Exhibit E.
8
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Highest Lawful Rate" means at the particular time in question the maximum
rate of interest which, under Applicable Law, any Lender is then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under Applicable
Law, the indicated rate ceiling shall be the lesser of (a)(i) the "weekly
ceiling", as that expression is defined in Section 303.003 of the Texas Finance
Code, as amended, or (ii) if available in accordance with the terms thereof and
at the Administrative Agent's option after notice to the Borrower and otherwise
in accordance with the terms of Section 303.103 of the Texas Finance Code, as
amended, the "annualized ceiling" and (b)(i) if the amount outstanding under
this Agreement is less than $250,000, twenty-four percent (24%), or (ii) if the
amount under this Agreement is equal to or greater than $250,000, twenty-eight
percent (28%) per annum.
"HOT-Barbados" means Xxxxx of Xxxx Limited, a Barbados company.
"HOT-Nevada" means Xxxxx of Xxxx Nevada Corporation, a Nevada corporation
and general partner of HOT.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments (but
for purposes of Section 7.03 only, such obligations shall only be
Indebtedness to the extent drawn upon or a claim is made in respect
thereof);
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the
ordinary course of business and, in each case, not past due for more than
60 days after the date on which such trade account payable was created);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) Capital Leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in
such Person or any other Person, valued, in the case of a redeemable
preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends;
(h) any "withdrawal liability" of such Person as such term is
defined under Part I of Subtitle E of Title IV of ERISA; and
9
(i) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation, a limited liability company or similar entity) in
which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any
net obligation under any Swap Contract on any date shall be deemed to be the
Swap Termination Value thereof as of such date. The amount of any Capital Lease
or Synthetic Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning specified in Section 10.04(b).
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
May, August, November and February and the Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, three or six
months thereafter, as selected by the Borrower in its Term Loan Notice or such
other period that is twelve months or less requested by the Borrower and
consented to by all the Lenders; provided that:
(i) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
(ii) 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 end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Investment" means, as to any Person, any direct or indirect acquisition
or investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"IP Rights" has the meaning specified in Section 5.17.
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
10
"Lender" has the meaning specified in the introductory paragraph hereto.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Leverage Ratio" means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness on such date to (b) Consolidated EBITDA for the
period of the four consecutive fiscal quarters most recently ended for which
Limited has delivered financial statements pursuant to Section 6.01. For
purposes of calculating the Leverage Ratio as of any date, Consolidated EBITDA
shall be calculated on a pro forma basis (as certified by a Responsible Officer
of Limited to the Administrative Agent and as approved by the Administrative
Agent) assuming that all Acquisitions made, and all Dispositions completed,
during the four consecutive fiscal quarters the most recently ended has been
made on the first day of such period (but without any adjustment for projected
cost savings or other synergies).
"Licenses" means, collectively, (a) the Revlon Licenses, (b) the Xxxxx
Xxxxxxx Agreements and (c) any other license or similar agreement the loss of
which could be reasonably expected to have a Material Adverse Effect, and all
rights under any of those items described in clauses (a), (b) and (c)
immediately preceding.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Litigation" means any proceeding, claim, lawsuit, arbitration and/or
investigation by or before any Governmental Authority or arbitrator, including,
without limitation, proceedings, claims, lawsuits, and/or such investigations
conducted by or before any Governmental Authority or arbitrator or pursuant to
any environmental, occupational, safety and health, antitrust, unfair
competition, securities, tax or other Law, or under or pursuant to any contract,
agreement or other instrument.
"Loan Documents" means this Agreement, each Term Loan Note, the Fee
Letter, and each Guaranty.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) of the Borrower, or
Limited and its Subsidiaries taken as a whole; (b) an impairment of the ability
of the Loan Parties, taken as a whole to perform their obligations under any
Loan Document to which a Loan Party is a party; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against any Loan
Party of any Loan Document to which it is a party.
"Maturity Date" means June 1, 2005.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
"Net Proceeds" means, with respect to any Disposition, the proceeds
thereof in the form of cash or cash equivalents, including payments with respect
to deferred payment obligations when received in the form of cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to Limited or any Subsidiary), net of (i) brokerage commissions
and other reasonable and necessary fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment bankers) related
to said Disposition, and (ii) amounts required to be paid and that have been
paid in respect of, or amounts required to be pledged and that are
11
pledged to secure, Indebtedness owed to any Person (other than Limited or any
Subsidiary) owning a beneficial interest in the properties subject to the
Disposition.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
"Off-Balance Sheet Liabilities" means, with respect to any Person as of
any date of determination thereof, without duplication and to the extent not
included as a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase facility)
(i) the unrecovered investment of purchasers or transferees of assets so
transferred, and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of such Person or any of its Subsidiaries in
respect of assets transferred or payments made in respect thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x) have the effect of limiting the loss or credit risk of such
purchasers or transferees with respect to payment or performance by the obligors
of the assets so transferred nor (y) impair the characterization of the
transaction as a true sale under Applicable Laws (including Debtor Relief Laws);
(b) the monetary obligations under any financing lease or so-called "synthetic,"
tax retention or off-balance sheet lease transaction which, upon the application
of any Debtor Relief Law to such Person or any of its Subsidiaries, would be
characterized as indebtedness; (c) the monetary obligations under any sale and
leaseback transaction which does not create a liability on the consolidated
balance sheet of such Person and its Subsidiaries; or (d) any other monetary
obligation arising with respect to any other transaction which (i) is
characterized as indebtedness for tax purposes but not for accounting purposes
in accordance with GAAP or (ii) is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the consolidated
balance sheet of such Person and its Subsidiaries (for purposes of this clause
(d), any transaction structured to provide tax deductibility as interest expense
of any dividend, coupon or other periodic payment will be deemed to be the
functional equivalent of a borrowing).
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" means all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document; provided that Other Taxes shall exclude Excluded Taxes.
"OXO Acquisition" means the acquisition by HOT of certain assets of Seller
pursuant to the terms of the OXO Acquisition Agreement.
"OXO Acquisition Agreement" means that certain Acquisition Agreement,
dated as of April 29, 2004 by and among World Kitchen (GHC), LLC, a Delaware
limited liability company, WKI Holding Company, Inc., a Delaware corporation,
World Kitchen, Inc., a Delaware corporation (collectively, the "Seller"), HOT
and Limited, without giving effect to any amendments, modifications and
supplements thereto which are not satisfactory to the Administrative Agent.
"Participant" has the meaning specified in Section 10.06(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
12
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Redeemable Stock" means any Equity Interest of Limited or any of its
Subsidiaries which prior to the Maturity Date may be (a) mandatorily redeemable,
(b) redeemable at the option of the holder thereof or (c) convertible into
Indebtedness.
"Register" has the meaning specified in Section 10.06(c).
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Required Lenders" means, as of any date of determination, Lenders holding
in the aggregate more than 50% of the Total Outstandings; provided that the
portion of the Total Outstandings held by any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, executive vice president, controller, treasurer or assistant
treasurer of a Loan Party. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
"Restricted Payment" means, collectively, (a) any dividend or other
distribution (whether in cash, securities or other property) with respect to any
capital stock or other Equity Interest, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest or on account of
any return of capital to Limited's stockholders, partners or members (or the
equivalent Person thereof), and (b) any payment or prepayment of principal,
interest, premium or penalty of or in respect of any Subordinated Indebtedness
or any defeasance, redemption, purchase, repurchase or other acquisition or
retirement for value, in whole or in part, of any Subordinated Indebtedness.
"Revlon Licenses" means the (a) Amended and Restated International
Appliance, Comb and Brush and Fashion Hair Accessory License Agreement, made and
entered into as of January 1, 2004, by and between HOT-Barbados and Revlon
Consumer Products Corporation, a Delaware corporation, and (b) Amended and
Restated North America Appliance, Comb and Brush and Fashion Hair Accessory
License Agreement, made and entered into as of January 1, 2004, by and among
HOT-Barbados, Revlon Consumer Products Corporation, a Delaware corporation, and
Revlon (Suisse) S.A., a Swiss corporation.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
13
"Senior Debt" means, as of any date of determination, for Limited and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Funded Indebtedness as of such date minus (b) Subordinated
Indebtedness as of such date.
"Senior Leverage Ratio" means, as of any date of determination, the ratio
of (a) Senior Debt on such date to (b) Consolidated EBITDA for the period of
four fiscal consecutive quarters most recently ended for which Limited has
delivered financial statements pursuant to Section 6.01. For purposes of
calculating the Senior Leverage Ratio as of any date, Consolidated EBITDA shall
be calculated on a pro forma basis (as certified by a Responsible Officer of
Limited to the Administrative Agent and as approved by the Administrative Agent)
assuming that all Acquisitions made, and all Dispositions completed, during the
four consecutive fiscal quarters the most recently ended has been made on the
first day of such period (but without any adjustment for projected cost savings
or other synergies).
"Senior Notes" means, collectively, those certain senior notes of the
Borrower issued pursuant to the Senior Notes Agreement, in form and substance
satisfactory to the Administrative Agent.
"Senior Notes Agreement" means that certain Note Purchase Agreement, among
the parties thereto, including Limited and the Borrower, pursuant to which the
Senior Notes shall be issued, as amended, modified or supplemented from time to
time.
"Shareholders' Equity" means, as of any date of determination,
consolidated shareholders' equity of Limited and its Subsidiaries as of that
date determined in accordance with GAAP.
"Subordinated Indebtedness" means any Indebtedness of Limited or any
Subsidiary which is expressly subordinated to the Obligations at all times
pursuant to terms satisfactory to the Required Lenders.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of Limited.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Obligations" means any and all obligations owed by any Loan Party to
any Lender or an Affiliate of a Lender in respect of a Swap Contract.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
14
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Term Loan" has the meaning specified in Section 2.01.
"Term Loan Note" means a promissory note made by the Borrower in favor of
a Lender evidencing the portion of the Term Loan made by said Lender,
substantially in the form of Exhibit B.
"Term Loan Notice" means a notice of (a) the Borrowing, (b) a conversion
of the Term Loan (or a portion thereof) from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in
writing, shall be substantially in the form of Exhibit A.
"Total Outstandings" means the aggregate outstanding amount of the Term
Loan.
"Type" means, with respect to the Term Loan (or any portion thereof), its
character as a Base Rate Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." mean the United States of America.
"Xxxxx Xxxxxxx Agreements" means the Master License Agreement, made and
entered into as of January 1, 2003, by and between HOT-Barbados and The Xxxxxxx
& Xxxxxx Company, a corporation duly organized and existing under the laws of
Ohio.
"Voting Equity Interests" of any Person means Equity Interests of any
class or classes having ordinary voting power for the election of at least a
majority of the members of the board of directors, managing general partners or
the equivalent governing body of such Person, irrespective of whether, at the
time, Equity Interests of any other class or classes or such entity shall have
or might have voting power by reason of the happening of any contingency.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word
"shall." Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (iii) the words "herein,"
"hereof"and "hereunder" and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references
in a Loan Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and
15
Schedules to, the Loan Document in which such references appear, (v) any
reference to any law shall include all statutory and regulatory provisions
consolidating, amending replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified,
refer to such law or regulation as amended, modified or supplemented from
time to time, and (vi) the words "asset" and "property" shall be construed
to have the same meaning and effect and to refer to any and all tangible
and intangible assets and properties, including cash, securities, accounts
and contract rights.
(b) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including;" the
words "to" and "until" each mean "to but excluding;" and the word
"through" means "to and including."
(c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS.
(a) Generally. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.
(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders
and the Borrower); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative Agent
and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.
1.04 ROUNDING. Any financial ratios required to be maintained pursuant to
this Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).
1.05 TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Central time (daylight or standard, as
applicable).
ARTICLE II.
TERM LOAN AND PAYMENTS
2.01 TERM LOAN. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make its portion of the term loan (the "Term Loan")
to the Borrower on the Closing Date in an amount not to exceed such Lender's
Applicable Percentage of the Term Loan as set forth opposite such Lender's name
on Schedule 2.01. Amounts repaid on the Term Loan may not be reborrowed. The
Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as further
provided herein.
2.02 THE BORROWING, CONVERSIONS AND CONTINUATIONS OF TERM LOAN.
(a) The Borrowing and each conversion of a portion of the Term Loan from
one Type to the other, and each continuation of Eurodollar Rate Loans shall be
made upon the Borrower's irrevocable notice to the Administrative Agent, which
may be given by telephone. Each such notice must be received by the
Administrative
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Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of the Borrowing of, conversion to or continuation of Eurodollar Rate Loans
or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on
the requested date of the Borrowing of Base Rate Loans. Each telephonic notice
by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Term Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Each Term Loan Notice (whether telephonic or written) shall specify (i)
whether the Borrower is requesting a conversion of a portion of the Term Loan
from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of the Term Loan to be
converted or continued, (iv) whether such principal amount of the Term Loan is
to be converted into a Base Rate Loan or a Eurodollar Rate Loan, and (v) if
applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of in a Term Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation, then the
applicable portion of the Term Loan shall be converted to, Base Rate Loans. Any
such automatic conversion to Base Rate Loans shall be effective as of the last
day of the Interest Period then in effect with respect to the applicable
Eurodollar Rate Loans. If the Borrower requests a conversion to, or continuation
of Eurodollar Rate Loans in any such Term Loan Notice, but fails to specify an
Interest Period, the Borrower will be deemed to have specified an Interest
Period of one month.
(b) Following receipt of a Term Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its portion of the Term Loan
that will be continued or converted, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of the Borrowing, each Lender
shall make the amount of its portion of the Term Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the
Term Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 4.01, the Administrative Agent shall make all funds so received
available to the Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of the Borrower on the books of Banc of
America with the amount of such funds or (ii) wire transfer of such funds, in
each case in accordance with instructions provided to (and reasonably acceptable
to) the Administrative Agent by the Borrower.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no portion of the Term
Loan may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. At any time that Base Rate
Loans are outstanding, the Administrative Agent shall notify the Borrower and
the Lenders of any change in Bank of America's prime rate used in determining
the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all conversions of portions of the Term Loan
from one Type to the other, and all continuations of portions of the Term Loan
as the same Type, there shall not be more than fifteen Interest Periods in
effect.
2.03 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay the
Term Loan in whole or in part without premium or penalty; provided that (i) such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans
and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount
17
thereof then outstanding. Each such notice shall specify the date and amount of
such prepayment and the Type(s) of the portion of the Term Loan to be prepaid.
The Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Applicable Percentage of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05. Each such
prepayment shall be applied to the Term Loan of the Lenders in accordance with
their respective Applicable Percentages.
(b) Mandatory Prepayments. Immediately upon the issuance of the Senior
Notes, the Borrower shall prepay the Term Loan in full. Any such prepayment
shall be accompanied by all accrued interest on the amount prepaid, and to the
extent that a Eurodollar Rate Loan is prepaid, together with any additional
amounts required pursuant to Section 3.05. Such prepayment shall be applied to
the Term Loan of the Lenders in accordance with their respective Applicable
Percentages.
2.04 REPAYMENT OF TERM LOAN. To the extent not required to be prepaid as
otherwise required herein, the Borrower shall repay to the Lenders on the
Maturity Date the aggregate principal amount of the Term Loan outstanding on
such date.
2.05 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the lesser of (y)
the Highest Lawful Rate and (z) the Eurodollar Rate for such Interest Period
plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the lesser of (y) the Highest Lawful Rate and (z) the
Base Rate plus the Applicable Rate.
(b) (i) If any principal amount of the Term Loan is not paid when due
(without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to
the Default Rate to the fullest extent permitted by Applicable Laws.
(i) If any amount (other than principal of any Loan) payable by
the Borrower under any Loan Document is not paid when due (without regard
to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then upon the request of the Required Lenders,
such amount shall thereafter bear interest at a fluctuating interest rate
per annum at all times equal to the Default Rate to the fullest extent
permitted by Applicable Laws.
(ii) Upon the request of the Required Lenders, while any Event of
Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the lesser of (y) the Highest Lawful Rate and
(z) the Default Rate, to the fullest extent permitted by Applicable Laws.
(iii) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each portion of the Term Loan shall be due and payable
in arrears on each Interest Payment Date applicable thereto and at such other
times as may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.
2.06 COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. Subject to Section 10.09, all other computations of
fees and interest
18
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a 365-day year). Interest shall accrue on the Term Loan for the day
on which the Term Loan is made, and shall not accrue on the Term Loan, or any
portion thereof, for the day on which the Term Loan or such portion is paid,
provided that any portion of the Term Loan that is repaid on the same day on
which it is made shall, subject to Section 2.08(a), bear interest for one day.
Each determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
2.07 EVIDENCE OF DEBT. The portion of the Term Loan held by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business. The accounts
or records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Term Loan made by the
Lenders to the Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Term Loan Note,
which shall evidence such Lender's Loans in addition to such accounts or
records. Each Lender may attach schedules to its Term Note and endorse thereon
the date, Type (if applicable), amount and maturity of its portion of the Term
Loan and payments with respect thereto.
2.08 PAYMENTS GENERALLY; ADMINISTRATIVE AGENT'S CLAWBACK.
(a) General. All payments to be made by the Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative Agent, for the account of
the respective Lenders to which such payment is owed, at the Administrative
Agent's Office in Dollars and in immediately available funds not later than 2:00
p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Applicable Percentage (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender's Lending Office. All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. If any payment
to be made by the Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless
the Administrative Agent shall have received notice from a Lender prior to
the proposed date of the Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of the
Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with Section 2.02 and may,
in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its
share of the Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation and (B) in the case
of a payment to be made by the Borrower, the interest rate applicable to
Base Rate Loans. If the Borrower and such Lender shall pay such interest
to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of
such interest paid by the Borrower for such period. If such Lender pays
its share of the Borrowing to the Administrative Agent, then the amount so
paid shall constitute such Lender's portion of the Term Loan included in
the Borrowing. Any payment by the Borrower shall be without prejudice to
any claim the
19
Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.
(ii) Payments by Borrowers; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume
that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the
Lenders the amount due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to
such Lender, in immediately available funds with interest thereon, for
each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes
available to the Administrative Agent funds for its portion of the Term Loan to
be made by such Lender as provided in the foregoing provisions of this Article
II, and such funds are not made available to the Borrower by the Administrative
Agent because the conditions to the funding of the Term Loan set forth in
Article IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make its portion of the Term Loan are several and not joint. The
failure of any Lender to make its portion of the Term Loan on the Closing Date
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its portion of the Term Loan or to make its payment under
Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any
Lender to obtain the funds for any portion of the Term Loan in any particular
place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for any portion of the Term Loan in any
particular place or manner.
2.09 SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by exercising
any right of setoff or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any portion of the Term Loan made by it
resulting in such Lender's receiving payment of a proportion of the aggregate
amount of the Term Loan or participations and accrued interest thereon greater
than its pro rata share thereof as provided herein, then the Lender receiving
such greater proportion shall (a) notify the Administrative Agent of such fact,
and (b) purchase (for cash at face value) participations in the portion of the
Term Loan of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective portions of the Term Loan and other amounts
owing them, provided that:
(i) if any such participations or subparticipations are purchased
and all or any portion of the payment giving rise thereto is recovered,
such participations or subparticipations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest;
and
(ii) the provisions of this Section shall not be construed to apply
to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement.
Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under Applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise
20
against such Loan Party rights of setoff and counterclaim with respect to such
participation as full as if such Lender were a direct creditor of such Loan
Party in the amount of such participation.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligations of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender,
as the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with Applicable Law.
(b) Payment of Other Taxes by the Borrower. Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with Applicable Law.
(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent or such Lender, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by Applicable Law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by Applicable Law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by Applicable Law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, in the event that the
Borrower is a resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the
21
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank"
within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a "controlled foreign corporation" described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or
(iv) any other form prescribed by Applicable Law as a basis for
claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary
documentation as may be prescribed by Applicable Law to permit the
Borrower to determine the withholding or deduction required to be made.
(f) Treatment of Certain Refunds. If the Administrative Agent or any
Lender determines, in its sole discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Administrative Agent
or such Lender, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This subsection shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, or any Governmental Authority has imposed material restrictions
on the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the London interbank market, then, on notice thereof by such Lender
to the Borrower through the Administrative Agent, any obligation of such Lender
to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to
Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine that
for any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not
22
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a conversion to Base Rate Loans in the amount
specified therein.
3.04 INCREASED COSTS; RESERVES ON EURODOLLAR RATE LOANS.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement
contemplated by Section 3.04(e));
(ii) subject to any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Eurodollar Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Indemnified Taxes or Other Taxes covered by Section 3.01 and the
imposition of, or a change in the rate of, any Excluded Tax payable by
such Lender; or
(iii) impose on any Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Loans
made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender, the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in
Law affecting such Lender or any Lending Office of such Lender or such Lender's
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement,
the commitments of such Lender or the portion of the Term Loan made by, such
Lender to a level below that which such Lender or such Lender's holding company
could have achieved but for such Change in Law (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy), then from time to time the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in subsection (a) or (b) of this
Section and delivered to the Borrower shall be conclusive absent manifest error.
The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to the foregoing provisions of this Section shall
not constitute a waiver of such Lender's right to demand such compensation,
provided that the Borrower shall not be required to compensate a Lender pursuant
to the foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).
23
(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each
Lender, as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as "Eurocurrency liabilities"), additional interest
on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual
costs of such reserves allocated to such Eurodollar Rate Loan by such Lender (as
determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such Eurodollar Rate Loan, provided the Borrower shall have received
at least 10 days' prior notice (with a copy to the Administrative Agent) of such
additional interest from such Lender. If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable 10 days from receipt of such notice.
3.05 COMPENSATION FOR LOSSES. Upon demand of any Lender (with a copy to
the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any
Eurodollar Rate Loan on a day other than the last day of the Interest Period for
such Loan (whether voluntary, mandatory, automatic, by reason of acceleration,
or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Eurodollar Rate Loan) to prepay, borrow, continue or
convert any Eurodollar Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.13;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such
Eurodollar Rate Loan or from fees payable to terminate the deposits from which
such funds were obtained. The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Eurodollar Rate Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.
3.06 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Eurodollar Rate Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the
need for the notice pursuant to Section 3.02, as applicable, and (ii) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrower may replace such Lender in accordance with Section
10.13.
24
3.07 SURVIVAL. All of the Borrower's obligations under this Article III
shall survive termination of this Agreement and repayment of all other
Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO BORROWING
4.01 CONDITIONS OF BORROWING. The obligation of each Lender to make its
portion of the Term Loan hereunder is subject to satisfaction of the following
conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and each of the
Lenders:
(i) executed counterparts of this Agreement and the Guaranty,
sufficient in number for distribution to the Administrative Agent, each
Lender and the Borrower;
(ii) a Term Loan Note executed by the Borrower in favor of each
Lender requesting a Term Loan Note;
(iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each
Loan Party as the Administrative Agent may require evidencing the
identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a
party;
(iv) such documents and certifications as the Administrative Agent
may reasonably require to evidence that each Loan Party is duly organized
or formed, and that each Loan Party is validly existing, in good standing
and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;
(v) a favorable opinion of Xxxxx & XxXxxxxx, counsel to the Loan
Parties, Xxxxxx Xxxxxxx & Xxxxxx, special Barbados counsel for
HOT-Barbados, and Xxxxxxx, Xxxx & Xxxxxxx, special Bermuda counsel for
Limited, each addressed to the Administrative Agent and each Lender, as to
such matters concerning the Loan Parties and the Loan Documents as the
Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by
such Loan Party and the validity against such Loan Party of the Loan
Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of Limited
certifying (A) the representations and warranties of the Borrower and each
other Loan Party contained in Article V or any other Loan Documents, or
which are contained in any document furnished at any time under or in
connection herewith or therewith, shall be true and correct on and as of
the date of the Term Loan, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they
shall be true and correct as of such earlier date, (B) no Default exists,
or would result from the Term Loan or the application of the proceeds
thereof, (C) that there has been no event or circumstance since the date
of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material
Adverse Effect; and (D) a calculation of the Leverage Ratio as of the last
day of the fiscal quarter of Limited most recently ended prior to the
Closing Date;
25
(viii) evidence that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and obligations
thereunder have been or concurrently with the Closing Date are being paid
or satisfied in full;
(ix) evidence satisfactory to the Administrative Agent that the
OXO Acquisition shall have been consummated (or shall be consummated
simultaneously with the initial Loan hereunder) pursuant to the terms of
the OXO Acquisition Agreement;
(x) evidence that all of the conditions precedent to Borrowing
set forth in Section 4.01 of the Bank Credit Agreement have been
satisfied; and
(xi) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent or the Required Lenders reasonably
may require.
(b) Any fees required to be paid on or before the Closing Date shall
have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have
paid all fees, charges and disbursements of counsel to the Administrative Agent
to the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).
Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Limited and the Borrower represent and warrant to the Administrative Agent
and the Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each Loan
Party and each Subsidiary thereof (a) is duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i)
own its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i), (c)
or (d), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law. Each Loan Party and each of its Subsidiaries is in
compliance with all Contractual Obligations referred to in clause (b)(i), except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
26
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, subject as to enforcement to any
Debtor Relief Laws and general equitable principles.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the financial condition of Limited and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness and
other liabilities, direct or contingent, Limited and its Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Indebtedness.
(b) Since the date of the Audited Financial Statements, there has been
no event or circumstance, either individually or in the aggregate, that has had,
and continues to have, or could reasonably be expected to have a Material
Adverse Effect.
(c) The consolidated forecasted balance sheet and statements of income
and cash flows of Limited and its Subsidiaries (after giving effect to the OXO
Acquisition) (collectively, the "Financial Projections") delivered prior to the
Closing Date were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair in light of the conditions existing at the
time of delivery of such forecasts, and represented, at the time of delivery, in
all material respects Limited's best estimate of its future financial
performance. Nothing in this clause (c) shall be deemed to constitute an
assurance by Limited or its Subsidiaries that they will meet the results
contained in the Financial Projections.
(d) As of the Closing Date, neither Limited nor any of its Subsidiaries
has any Off-Balance Sheet Liabilities.
5.06 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of Limited after due and diligent
investigation prior to the Closing Date, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, by or against
Limited or any of its Subsidiaries or against any of their properties or
revenues that (a) could reasonably affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby, or (b)
either individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
5.07 NO DEFAULT. Neither Limited nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Limited and each of its Subsidiaries
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
property of Limited and its Subsidiaries is subject to no Liens, other than
Liens permitted by Section 7.01.
27
5.09 ENVIRONMENTAL COMPLIANCE. Limited and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof Limited has reasonably concluded that such Environmental
Laws and claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.10 INSURANCE. The properties of Limited and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of
Limited, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Limited or the applicable Subsidiary
operates.
5.11 TAXES. Limited and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against Limited or any of its Subsidiaries that would, if made, have
a Material Adverse Effect. Neither Limited nor any of its Subsidiaries thereof
is party to any tax sharing agreement. The Federal Income tax liabilities of
Limited and its Subsidiaries have been determined by the IRS and paid for all
fiscal years up to and including the fiscal year ending February 28, 1996.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of Limited, nothing has occurred which would prevent, or cause the
loss of, such qualification. Limited and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Limited,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither Limited
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
Limited nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Limited nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA, except in each case with respect to clauses
(i) through (v) above where the occurrence or existence thereof could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.13 SUBSIDIARIES; EQUITY INTERESTS. As of the Closing Date, Limited has
no Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by a Loan Party
in the amounts specified on Part (a) of Schedule 5.13 free and clear of all
Liens. As of the Closing Date, Limited and its Subsidiaries have no equity
investments in any other corporation or entity (other than a Subsidiary) other
than those specifically disclosed in Part (b) of Schedule 5.13. All of the
outstanding Equity Interests in the Borrower has been validly issued and are
fully paid and nonassessable. As of the Closing Date, Part (a) of Schedule 5.13
sets forth as to
28
each Subsidiary of Limited the percentage of shares or interests of each class
of its Equity Interests owned by Limited and each other Subsidiary.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally or
as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.
Following the application of the proceeds of the Borrowing, not more than 25% of
the value of the assets (either of Limited only or of Limited and its
Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01
or Section 7.05 or subject to any restriction contained in any agreement or
instrument between Limited and any Lender or any Affiliate of any Lender
relating to Indebtedness and within the scope of Section 8.01(e) will be margin
stock.
(b) Neither the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.
5.15 DISCLOSURE. Limited and the Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which they or any of their Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other information furnished (whether in
writing or orally) by or on behalf of any Loan Party to the Administrative Agent
or any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, Limited and the Borrower represent
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time of delivery thereof.
5.16 COMPLIANCE WITH LAWS. Each of Limited and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17 INTELLECTUAL PROPERTY; LICENSES, ETC. Limited and its Subsidiaries
own, or possess the right to use, all of the trademarks, service marks, trade
names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights (collectively, "IP Rights") that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person, except to the extent that the failure to do
so could not reasonably be expected to have a Material Adverse Effect. No slogan
or other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by Limited or any
Subsidiary infringes upon any rights held by any other Person, except to the
extent that such infringement could not reasonably be expected to have a
Material Adverse Effect. No claim or litigation regarding any of the foregoing
is pending or, to the best knowledge of Limited, threatened, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
5.18 FOREIGN ASSETS CONTROL REGULATIONS, ETC. Use of the proceeds of the
Term Loan will not violate the Trading with the Enemy Act, as amended, or any of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto, or is in violation of any federal statute or
Presidential Executive Order, including without limitation Executive Order 13224
66 Fed. Reg. 49079 (September 25, 2001) (Blocking Property and Prohibiting
Transactions with Persons who Commit, Threaten to Commit or Support Terrorism),
or the Act.
29
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any portion of the Term Loan or other Obligation hereunder
shall remain unpaid or unsatisfied, Limited shall, and shall (except in the case
of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each
Subsidiary to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and each
Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of Limited (commencing with the fiscal year ended February
28, 2005]), a consolidated and consolidating balance sheet of Limited and its
Subsidiaries as at the end of such fiscal year, and the related consolidated and
consolidating statements of income or operations, and consolidated statements of
shareholders' equity, and cash flows for such fiscal year, setting forth in each
case in comparative consolidated form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by a report and opinion of KPMG LLP or
such other independent certified public accountant of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any "going concern" or like qualification or exception
or any qualification or exception as to the scope of such audit and such
consolidating statements to be certified by a Responsible Officer of Limited to
the effect that such statements are fairly stated in all material respects when
considered in relation to the consolidated financial statements of Limited and
its Subsidiaries; and
(b) as soon as available, but in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of Limited
(commencing with the fiscal quarter ended May 31, 2004), a consolidated and
consolidating balance sheet of Limited and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated and consolidating statements
of income or operations, and consolidated statements of shareholders' equity,
and cash flows for such fiscal quarter and for the portion of Limited's fiscal
year then ended, setting forth in each case in comparative consolidated form the
figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail,
such consolidated statements to be certified by a Responsible Officer of Limited
as fairly presenting the financial condition, results of operations,
shareholders' equity, and cash flows of Limited and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes and such consolidating statements to be certified by a
Responsible Officer of Limited to the effect that such statements are fairly
stated in all material respects when considered in relation to the consolidated
financial statements of Limited and its Subsidiaries.
As to any information contained in materials furnished pursuant to Section
6.02(d), Limited shall not be separately required to furnish such information
under clause (a) or (b) above, but the foregoing shall not be in derogation of
the obligation of Limited to furnish the information and materials described in
clauses (a) and (b) above at the times specified therein.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
(a) concurrently with the delivery of the financial statements referred
to in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default under
the financial covenants set forth herein or, if any such Default shall exist,
stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements referred
to in Sections 6.01(a) and (b) (commencing with the delivery of the financial
statements for the fiscal quarter ended May 31, 2004), a duly completed
Compliance Certificate signed by a Responsible Officer of Limited;
30
(c) promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of Limited by independent accountants in connection with
the accounts or books of Limited or any Subsidiary, or any audit of any of them;
(d) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of Limited, and copies of all annual, regular, periodic and special
reports and registration statements which Limited may file or be required to
file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of
1934, and not otherwise required to be delivered to the Administrative Agent
pursuant hereto;
(e) promptly, and in any event within five Business Days after receipt
thereof by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any Subsidiary thereof; and
(f) promptly, such additional information regarding the business,
financial or corporate affairs of Limited or any Subsidiary, or compliance with
the terms of the Loan Documents, as the Administrative Agent or any Lender may
from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Limited posts such documents, or provides a link thereto on Limited's website on
the Internet at the website address listed on Schedule 10.02; or (ii) on which
such documents are posted on Limited's behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) Limited shall deliver paper copies of
such documents to the Administrative Agent or any Lender that requests Limited
to deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) Limited
shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
Limited shall be required to provide paper copies of the Compliance Certificates
required by Section 6.02(b) to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by Limited
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.
6.03 NOTICES. Promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of Limited or any Subsidiary,
except to the extent that breach, non-performance or default could not
reasonably be expected to have a Material Adverse Effect or result in a Default;
(ii) any material dispute, litigation, investigation, proceeding or suspension
between Limited or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting Limited or any Subsidiary, including pursuant to any applicable
Environmental Laws, in which the amount involved is $5,000,000 or more, which
involve the probability of any judgment or liability not adequately covered by
insurance or (ii) in which injunctive or similar relief is sought, and which
could reasonably be expected to have a Material Adverse Effect;
(c) of the occurrence of any ERISA Event; and
31
(d) of any material change in accounting policies or financial reporting
practices by Limited or any Subsidiary; and
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of Limited setting forth details of the occurrence referred
to therein and stating what action Limited has taken and proposes to take with
respect thereto. Each notice pursuant to Section 6.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, except to the extent that
failure to pay or discharge obligations and liabilities could not reasonably be
expected to have a Material Adverse Effect, and such obligations and liabilities
shall include (a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by Limited or such
Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and (c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; (b) make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of Limited, insurance with respect
to its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
by such other Persons.
6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 BOOKS AND RECORDS. Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of Limited or such Subsidiary, as the case may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants. Before an Event of Default exists, (a) such visits and inspections
shall be at such reasonable times during business hours and as often as may be
reasonably desired, upon reasonable advance notice to Limited and the Borrower
and (b) the Borrower shall pay for the reasonable costs and expenses of the
Administrative Agent with respect to no more than one such visit and inspection
by the Administrative Agent during any twelve-month period. After an Event of
Default exists and is continuing, (a) such
32
visits and inspections may be at any time during normal business hours and
without advance notice and (b) the Borrower shall pay the reasonable costs and
expenses of all such visits and inspections.
6.11 USE OF PROCEEDS. Use the proceeds of the Term Loan for general
corporate purposes not in contravention of any Law or of any Loan Document.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any portion of the Term Loan or other Obligation hereunder
shall remain unpaid or unsatisfied, Limited shall not, not shall it permit any
Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and
any renewals or extensions thereof, provided that (i) the property covered
thereby is not changed, (ii) the amount secured or benefited thereby is not
increased, (iii) the direct or any contingent obligor with respect thereto is
not changed, and (iv) any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.03(b);
(c) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
(h) Liens, or an existing pledge of a deposit, securing payment of
senior debt by an Affiliate or Subsidiary to a foreign financial institution as
described in the financial statements delivered pursuant to Section 5.05 or
which may be disclosed from time to time by any such party; provided the
Indebtedness secured by such Liens does not exceed $10,000,000 in aggregate
principal amount;
(i) Liens securing Indebtedness permitted under Section 7.03(e);
provided that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (ii) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition;
33
(j) Liens in favor of a Loan Party;
(k) Liens on property of a Person existing at the time such Person is
acquired by, merged with or into or consolidated with Limited or a Subsidiary;
provided, that such Liens were in existence prior to the contemplation of such
acquisition, merger or consolidation and do not extend to any assets other than
those of the Person acquired by, merged into or consolidated with Limited or a
Subsidiary;
(l) Liens on property existing at the time of acquisition thereof by
Limited or a Subsidiary; provided, that such Liens were in existence prior to
the contemplation of such acquisition;
(m) Liens securing Indebtedness permitted by Section 7.03(h); and
(n) Liens existing on the Closing Date against the Investments described
in Section 7.02(j).
7.02 INVESTMENTS. Make any Investments, except:
(a) Investments in the form of direct obligations of the United States
of America or any agency thereof or obligations guaranteed by the United States
of America or any agency thereof, in any case maturing within three years after
the acquisition thereof;
(b) Investments in bankers' acceptance, certificates of deposits,
eurodollar deposits or time deposits issued or accepted by any commercial bank
organized under the laws of the United States of America, any state thereof, or
the District of Columbia, and having combined capital, surplus and undivided
profits of at least $1,000,000,000 and having (or having parent holding company
that has) outstanding short term debt rated P-1 by Xxxxx'x Investor Service,
Inc. or A-1 by Standard and Poor's Rating Group and long-term debt rated at
least A by Xxxxx'x Investor Service, Inc. or Standard and Poor's Rating Group;
(c) Investments in commercial paper rated in one of the two highest
rating categories by Xxxxx'x Investor Service, Inc. or by Standard and Poor's
Rating Group and maturing not more than 270 days from the date of creation
thereof;
(d) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (a) and (b) above
entered into with any financial institution meeting the qualifications specified
in clause (b) above;
(e) Investments in money market mutual funds that are classified as
current assets in accordance with generally accepted accounting principles and
that invest at least 95% of its assets in Investments described in clauses (a)
through (d) and of this definition maturing not more than one year after the
acquisition thereof, which funds are managed by Persons having, or who are
members of holding companies having, capital and surplus in excess of
$100,000,000;
(f) advances to officers, directors and employees of the Borrower and
Guarantors in an aggregate amount not to exceed $500,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(g) Investments of the Borrower in any Guarantor and Investments of any
Guarantor in the Borrower or in another Guarantor;
(h) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
34
(i) Investments as a result of Acquisitions, if each of the following
conditions has been satisfied: (i) subject to clause (iv) below, immediately
before and after giving effect to such Acquisition, no Default shall have
occurred and be continuing, (ii) if the Senior Leverage Ratio at the end of the
fiscal quarter immediately preceding such Acquisition is greater than 2.00 to
1.00, the aggregate Acquisition Consideration for all Acquisitions during the
fiscal year in which such proposed Acquisition is to occur shall not exceed 100%
of the Consolidated EBITDA (which for purposes of this calculation will include
the OXO Acquisition on a pro forma basis) for the fiscal year immediately
preceding such fiscal year, (iii) such Acquisition shall not be opposed by the
board of directors or similar governing body of the Person or assets being
acquired and (iv) if the Acquisition results in a Subsidiary being acquired and
on a pro forma basis a Default under Section 7.14 would occur as a result
thereof, such Subsidiary shall execute and deliver to the Lender (x) a Guaranty,
(y) such documents of the types referred to in clauses (iv) and (v) of Section
4.01(a) and (z) a favorable opinion of counsel to such Person located in the
jurisdiction of organization of such Person, in form, content and scope
reasonable satisfactory to Lender;
(j) Investments in 3,000,000 shares of common stock of Genio Holdings,
Inc. and any successor thereof (as adjusted by stock splits, dividends,
reclassifications or combinations thereof);
(k) Investments that are otherwise permitted by this Agreement,
including Section 7.03(i);
(l) Investments by a Subsidiary (other than a Loan Party) in any other
Subsidiary (other than a Loan Party); and
(m) so long as no Default exists or would result therefrom, Investments
not otherwise permitted to be made pursuant to clauses (a) through (l) above not
to exceed 15% of Consolidated Net Worth.
7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on Schedule
7.03 or permitted hereunder, and any refinancings, refundings, renewals or
extensions thereof; provided that (i) the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount
paid, and fees and expenses reasonably incurred, in connection with such
refinancing and by an amount equal to any existing commitments unutilized
thereunder and (ii) the terms relating to amortization, maturity, collateral (if
any) and subordination (if any), and other material terms taken as a whole, of
any such refinancing, refunding, renewing or extending Indebtedness, are no less
favorable in any material respect to the Loan Parties or the Lenders than the
terms of any agreement or instrument governing the Indebtedness being
refinanced, refunded, renewed or extended and the interest rate applicable to
any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate;
(c) Guarantees by Limited or any Subsidiary in respect of Indebtedness
otherwise permitted hereunder of the Borrower or any Guarantor;
(d) obligations (contingent or otherwise) of Limited or any Subsidiary
existing or arising under any Swap Contract, provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a "market view;" and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) Indebtedness in respect of Capital Leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets within
the limitations set forth in Section 7.01(i); provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not
exceed $25,000,000;
35
(f) Indebtedness in respect of the Senior Notes, the Senior Notes
Agreement and the Bank Credit Agreement;
(g) unsecured Indebtedness not otherwise permitted to be incurred
pursuant to any of clauses (a) through (f) above provided that (i) the final
maturity of such Indebtedness is beyond the Maturity Date and (ii) no Default
exists at the time of incurrence of any such Indebtedness or would result
therefrom;
(h) Indebtedness not to exceed $5,000,000 at any one time outstanding;
provided that at the time of, and after giving effect to, the incurrence of such
Indebtedness no Default shall exist; and
(i) intercompany Indebtedness (i) between Loan Parties, (ii) between
Subsidiaries that are not Loan Parties or (iii) between a Loan Party and a
Subsidiary that is not a Loan Party in which the net principal amount thereof,
together with all other such Indebtedness between Loan Parties and Subsidiaries
that are not Loan Parties, shall not exceed $25,000,000 in aggregate amount at
any time outstanding.
7.04 FUNDAMENTAL CHANGES. Merge, dissolve, liquidate, consolidate with or
into another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) one of the Borrower, provided that
the Borrower shall be the continuing or surviving Person, or (ii) any one or
more other Subsidiaries, provided that when any Guarantor is merging with
another Subsidiary, the Guarantor shall be the continuing or surviving Person;
(b) any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to one of the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or a Guarantor; and
(c) Limited or any Subsidiary may make any Acquisition or Disposition
permitted by Section 7.02 or 7.05.
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement to
make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by Limited or any Subsidiary to one of the
Borrower or to a wholly-owned Subsidiary; provided that if the transferor of
such property is a Guarantor, the transferee thereof must either be the Borrower
or a Guarantor;
(e) Dispositions permitted by Section 7.04; and
(f) Dispositions of assets (including Equity Interests of a Subsidiary)
not otherwise permitted in clauses (a) through (e) above provided (i) there
exists no Default both before and after giving effect to any such Disposition
and (ii) the assets being Disposed of, together with all other assets Disposed
of during the period of 12 consecutive months ending on the date of such
Disposition generated less than 15% of Consolidated EBITDA determined as of the
end of the fiscal year immediately preceding such Disposition;
36
provided, however, that any Disposition pursuant to clauses (a) through (f)
shall be for fair market value.
7.06 RESTRICTED PAYMENTS. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:
(a) each Subsidiary may make Restricted Payments to Limited, the
Guarantors and any other Person that owns an Equity Interest in such Subsidiary,
ratably according to their respective holdings of the type of Equity Interest in
respect of which such Restricted Payment is being made;
(b) Limited and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock or other Equity
Interests of such Person (other than Redeemable Stock);
(c) Limited and each Subsidiary may pay, purchase, redeem or otherwise
acquire Equity Interests or Indebtedness issued or incurred by it with the
proceeds received from the substantially concurrent issue of new shares of its
common stock or other Equity Interests (other than Redeemable Stock) or
Subordinated Indebtedness;
(d) Limited may declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire for cash Equity Interests issued by it;
and
(e) Limited and each Subsidiary may make regularly scheduled payments of
interest on any Subordinated Indebtedness.
7.07 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by
Limited and its Subsidiaries on the date hereof or any business reasonably
related or incidental thereto (it being agreed that assets and business acquired
in respect of the OXO Acquisition are reasonably related).
7.08 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any kind
with any Affiliate of Limited, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
Limited or such Subsidiary as would be obtainable by Limited or such Subsidiary
at the time in a comparable arm's length transaction with a Person other than an
Affiliate, provided that the foregoing restriction shall not apply to
transactions between or among the Borrower and any Guarantor or between and
among any Guarantors.
7.09 BURDENSOME AGREEMENTS. Enter into or be a party to any Contractual
Obligation (other than this Agreement and any other Loan Document) that limits
the ability (a) of any Subsidiary to make Restricted Payments to the Borrower or
any Guarantor or to otherwise transfer property to the Borrower or any
Guarantor, (b) of any Subsidiary to Guarantee the Indebtedness of the Borrower
or (c) of Limited or any Subsidiary to create, incur, assume or suffer to exist
Liens on property of such Person. The provisions of this Section 7.09 will not
apply to encumbrances or restrictions existing under or by reason of (i) the
Guaranteed Senior Note Agreement, the Bank Credit Agreement, the Senior Notes,
the Senior Notes Agreement, or agreements, instruments and documents entered
into in connection with Indebtedness permitted under Section 7.03(e), (g) or (h)
and any restatements, renewals, increases, supplements, refundings, replacements
or refinancings thereof, provided that such restatements, renewals, increases,
supplements, refundings, replacements or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other payment
restrictions than those contained in such Contractual Obligations, (ii)
applicable Laws, and (iii) customary non-assignment provisions in Contractual
Obligations entered into in the ordinary course of business and consistent with
past practices, (iv) purchase money obligations permitted under this Agreement
that impose restrictions on the property so acquired, (v) Contractual
Obligations in respect of the common stock of Genio Holdings, Inc., (vi) any
agreement for the Disposition of a Subsidiary or assets of a Subsidiary that
restricts distributions, the transfer of, or encumbrances on such assets by that
Subsidiary pending its Disposition or any agreement entered into with respect to
assets acquired or disposed of in connection with an Acquisition or Disposition,
and (vii) Liens securing Indebtedness that limit the right of the debtor to
dispose of the assets subject to such Lien.
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7.10 USE OF PROCEEDS. Use the proceeds of the Term Loan, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.
7.11 FINANCIAL COVENANTS.
(a) Consolidated Net Worth. Permit Consolidated Net Worth at any time to
be less than the sum of (i) $280,000,000 less the gross purchase price of the
repurchase of Limited's common shares made in June 2004 and July 2004 not to
exceed $25,000,000 in aggregate amount, (ii) an amount equal to 40% of the
Consolidated Net Earnings of each full fiscal quarter ending after February 29,
2004 (with no deduction for a net loss in any such fiscal quarter), (iii) an
amount equal to 100% of the aggregate increases in Shareholders' Equity of
Limited and its Subsidiaries after the date hereof by reason of the issuance and
sale of Equity Interests of Limited or any Subsidiary (other than issuances to
Limited or a wholly-owned Subsidiary), including upon any conversion of debt
securities of Limited into such Equity Interests, and (iv) 100% of the net worth
of any Person that becomes a Subsidiary or substantially all of the assets of
which are acquired by Limited or any Subsidiary to the extent the purchase price
therefor is paid in Equity Interests of Limited or any Subsidiary or pursuant to
the conversion or exchange of any convertible subordinated debt or redeemable
preferred stock into Equity Interests of Limited or any Subsidiary.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio
as of the end of any fiscal quarter of Limited to be less than the ratio set
forth below opposite such fiscal quarter:
Minimum Fixed Charge
Coverage
Four Fiscal Quarters Ending Ratio
------------------------------------------------------- --------------------
Closing Date through and including November 30, 2004 1.25 to 1.00
Each fiscal quarter thereafter 1.50 to 1.00
(c) Leverage Ratio. Permit the Leverage Ratio at any time during any
period of four fiscal quarters of Limited set forth below to be greater than the
ratio set forth below opposite such period:
Maximum Leverage
Four Fiscal Quarters Ending Ratio
------------------------------------------------------ --------------------
Closing Date through and including November 30, 2004 3.75 to 1.00
Each fiscal quarter thereafter 3.50 to 1.00
7.12 AMENDMENTS OF SUBORDINATED INDEBTEDNESS. Change or permit any
Subsidiary to change or amend (or take any action or fail to take any action the
result of which is an effective amendment or change) or accept any waiver or
consent with respect to, any document, instrument or agreement relating to any
Subordinated Indebtedness that would result in (a) an increase in the principal,
interest, overdue interest, fees or other amounts payable under any Subordinated
Indebtedness, (b) an acceleration of any date fixed for payment or prepayment of
principal, interest, fees or other amounts payable under any Subordinated
Indebtedness (including, without limitation, as a result of any redemption), in
each case where such date fixed would result in a payment prior to the Maturity
Date, (c) a change in any of the subordination provisions of any Subordinated
Indebtedness, or (d) any other change in any term, provision or covenant of any
Subordinated Indebtedness that could reasonably be expected to have an adverse
effect on the interest of the Lenders.
7.13 LICENSES. Assign or otherwise transfer any of the Licenses, in whole
or in part, except that Licenses may be transferred to HOT-Barbados or a
Guarantor if, and only if, (a) at the time of such transfer no Default exists or
would result therefrom and (b) at the time of such transfer, HOT is a Subsidiary
of HOT-Barbados.
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7.14 LOAN PARTIES. Permit (a) the aggregate assets of the Loan Parties
(excluding ownership interests in any Subsidiary of any Loan Party that is not a
Loan Party) as of the last date of any fiscal quarter to comprise less than 80%
of the aggregate assets of Limited and its Subsidiaries or (b) as of the last
date of any fiscal quarter, permit the aggregate EBITDA for the period of four
consecutive fiscal quarters ending on such date generated by the Loan Parties to
comprise less than 80% of the aggregate EBITDA generated by Limited and its
Subsidiaries during such period, and any such failure set forth in either of
clause (a) or (b) above continues for a period of (i) 45 days following the end
of the fiscal quarter on the last day of which such failure occurs if such
fiscal quarter is one of the first three fiscal quarters of a fiscal year or
(ii) 90 days following the end of the fiscal quarter on the last day of which
such failure occurs if such fiscal quarter is the last fiscal quarter of a
fiscal year without the delivery to the Administrative Agent of (A) a Guaranty
executed by one or more Subsidiaries with assets and/or EBITDA sufficient to
cure any failure set forth in clause (a) or (b) above and (B) documents of the
type referred to in clauses (iv) and (v) of Section 4.01(a) and favorable
opinions of counsel to such Subsidiaries (which shall cover, among other things,
the legality, validity, binding effect and enforceability of the Guaranty), all
in form, content and scope reasonably satisfactory to the Administrative Agent.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of
Default:
(a) Non-Payment. The Borrower fail to pay (i) when and as required to be
paid herein, any amount of principal of any portion of the Term Loan, (ii)
within the earlier of (A) one Business Day's notice thereof by the
Administrative Agent or (B) three Business Days after the same becomes due, any
interest on any portion of the Term Loan, or any fee due hereunder, or (iii)
within the earlier of (A) one Business Day's notice thereof by the
Administrative Agent or (B) five Business Days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of Section 6.03, 6.05, 6.10 or 6.11
or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading when made or deemed made; or
(e) Cross-Default. (i) Any Loan Party or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including amounts owing to all creditors under
any combined or syndicated credit arrangement) of more than $5,000,000 or (B)
fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which any Loan Party or any Subsidiary
is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as
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to which any Loan Party is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by such Loan Party as a result thereof is
greater than $5,000,000; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against any Loan Party or any Subsidiary
(i) a final judgment or order for the payment of money in an aggregate amount
exceeding $5,000,000 not stayed, discharged or paid 30 days after the entry
thereof (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of any Loan Party or any Subsidiary under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$5,000,000, or (ii) Limited or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $5,000,000; or
(j) Invalidity of Loan Documents. Any provision of any Loan Document, at
any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Licenses. Any License shall expire and not be renewed or shall be
otherwise terminated and such expiration, non-renewal or termination could
reasonably be expected to have a Material Adverse Effect.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the unpaid principal amount of the outstanding Term Loan,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, including
notice of intent to accelerate and notice of acceleration, all of which are
hereby expressly waived by the Borrower; and
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(b) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of any event specified in subsection
(f) of Section 8.01, the unpaid principal amount of the Term Loan and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided for in
Section 8.02 (or after the Term Loan has automatically become immediately due
and payable as set forth in the proviso to Section 8.02), any amounts received
on account of the Obligations shall be applied by the Administrative Agent in
the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including fees, charges and disbursements of counsel to the respective
Lenders and amounts payable under Article III), ratably among them in proportion
to the amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Term Loan, ratably among the Lenders in proportion to
the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Term Loan, ratably among the Lenders, and to the extent
payments under any Guaranty, to the Guarantied Parties, in proportion to the
respective amounts described in this clause Fourth held by them;
Fifth, to any remaining outstanding unpaid Obligations, and to the extent
that any amounts are payments under any Guaranty, Swap Obligations in respect of
Swap Contracts, ratably among the Lenders and the Guarantied Parties in
proportion to the respective amounts described in this clause Fifth held by
them; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORITY. Each of the Lenders hereby irrevocably
appoints Banc of America to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Administrative
Agent and the Lenders, and no Loan Party shall have rights as a third party
beneficiary of any of such provisions.
9.02 RIGHTS AS A LENDER. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
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9.03 EXCULPATORY PROVISIONS. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents),
provided that the Administrative Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document
or Applicable Law; and
(c) shall not, except as expressly set forth herein and in the
other Loan Documents, have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to any Loan Party or
any of its respective Affiliates that is communicated to or obtained by
the Person serving as the Administrative Agent or any of its Affiliates in
any capacity.
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of the Term Loan, that by its terms must be fulfilled to the
satisfaction of a Lender, the Administrative Agent may presume that such
condition is satisfactory to such Lender unless the Administrative Agent shall
have received notice to the contrary from such Lender prior to the making of the
Term Loan. The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.
9.05 DELEGATION OF DUTIES. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
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Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
9.06 RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative Agent may at
any time give notice of its resignation to the Lenders and the Borrower. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be
a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the Borrower
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents (except that
in the case of any collateral security held by the Administrative Agent on
behalf of the Lenders under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender directly, until
such time as the Required Lenders appoint a successor Administrative Agent as
provided for above in this Section. Upon the acceptance of a successor's
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section). The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
retiring Administrative Agent's resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.
9.07 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
9.08 NO OTHER DUTIES, ETC. Anything herein to the contrary
notwithstanding, none of the Bookrunners, Arrangers or other titles listed on
the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent or a Lender hereunder.
9.09 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any portion of the Term Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on any Loan Party)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Term Loan and
all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of
the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Lenders and the Administrative Agent and their respective agents and
counsel and all other
43
amounts due the Lenders and the Administrative Agent under Section 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
9.10 GUARANTY MATTERS. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guaranty if such Person ceases to be a
Guarantor as a result of a transaction permitted hereunder, and the
Administrative Agent and the Lenders shall release any Guarantor subject to a
Disposition permitted by Section 7.04 or 7.05.
Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent's authority to release any
Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.
ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by any
Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(b) extend or increase any Lender's portion of the Term Loan without the
written consent of such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment (excluding mandatory prepayments) of principal, interest, fees
or other amounts due to the Lenders (or any of them) hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, the Term Loan, or (subject to clause (ii) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of "Default Rate" or to waive any
obligation of the Borrower to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on the Term
Loan or to reduce any fee payable hereunder;
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(e) change Section 2.09 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(g) release all or substantially all of the Guarantors from the Guaranty
without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that any such Lender's portion of the Term
Loan may not be increased or extended without the consent of such Lender.
10.02 NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier
(with confirmation) as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower or the Administrative Agent, to the
address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 10.02; and
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its
Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Borrower may, in their discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day
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for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor.
(c) Change of Address, Etc. Each of the Borrower and the Administrative
Agent may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Borrower and the Administrative
Agent.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Term Loan Notices) purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Administrative Agent, each Lender and the Related Parties of each of them
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the Borrower.
All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all out-of-pocket expenses incurred by the Administrative
Agent or any Lender (including the fees, charges and disbursements of any
counsel for the Administrative Agent or any Lender), in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Term Loan made hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of the Term Loan, except to the extent that the Administrative Agent or any
Lender is not entitled to indemnification under this Agreement.
(b) Indemnification by the Borrower. THE BORROWER SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT (AND ANY SUB-AGENT THEREOF), EACH LENDER, AND EACH RELATED
PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
"INDEMNITEE") AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL
LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES (INCLUDING THE FEES,
CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE), INCURRED BY ANY
INDEMNITEE OR ASSERTED AGAINST ANY INDEMNITEE BY ANY THIRD PARTY OR BY THE
BORROWER OR ANY OTHER LOAN PARTY ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, (ii) THE TERM LOAN OR THE USE OR PROPOSED USE OF THE PROCEEDS
THEREFROM, (iii) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS
MATERIALS ON OR FROM
46
ANY PROPERTY OWNED OR OPERATED BY LIMITED OR ANY OF ITS SUBSIDIARIES, OR ANY
ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO LIMITED OR ANY OF ITS
SUBSIDIARIES, OR (iv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION
OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY, WHETHER BROUGHT BY A THIRD PARTY OR BY ANY LOAN PARTY, AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, IN ALL CASES, WHETHER
OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF THE
INDEMNITEE; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE
AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
RELATED EXPENSES (x) ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY
FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (Y) RESULT FROM A CLAIM BROUGHT BY ANY
LOAN PARTY AGAINST AN INDEMNITEE FOR BREACH IN BAD FAITH OF SUCH INDEMNITEE'S
OBLIGATIONS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, IF SUCH LOAN PARTY HAS
OBTAINED A FINAL AND NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS
DETERMINED BY A COURT OF COMPETENT JURISDICTION.
(c) Reimbursement by Lenders. To the extent that the Borrower for any
reason fail to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of any of
the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.08(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by Applicable Law, the Borrower shall not assert, and hereby waive,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, the Term Loan or the use of the
proceeds thereof. No Indemnitee referred to in subsection (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
(e) Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent, the replacement of any Lender, the
termination of this Agreement and the repayment, satisfaction or discharge of
all the other Obligations.
10.05 PAYMENTS SET ASIDE. To the extent that any payment by or on behalf
of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is
47
made at a rate per annum equal to the Federal Funds Rate from time to time in
effect. The obligations of the Lenders under clause (b) of the preceding
sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.
10.06 SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of the Term Loan at the time owing to
it); provided that
(i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's portion of the Term Loan at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund with respect to a Lender, the principal
outstanding balance of the portion of the Term Loan of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the portion of the Term Loan
assigned; and
(iii) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Term Loan Note to the assignee Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
48
(c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Administrative Agent's Office
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders and principal amounts of
the Term Loan owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by each of the Borrower
at any reasonable time and from time to time upon reasonable prior notice. In
addition, at any time that a request for a consent for a material or substantive
change to the Loan Documents is pending, any Lender wishing to consult with
other Lenders in connection therewith may request and receive from the
Administrative Agent a copy of the Register.
(d) Participations. Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person or any Loan Party or any of their
Subsidiaries or Affiliates) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of the Term Loan owing to it; provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by Law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.09 as though it were a
Lender.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 3.01(e) as though it were a
Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Term Loan Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
10.07 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be
49
disclosed (a) to its Affiliates and to its and its Affiliates' respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower.
For purposes of this Section, "Information" means all information received
from Limited or any Subsidiary relating to Limited or any Subsidiary or any of
their respective businesses, other than any such information that is available
to the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by Limited or any Subsidiary. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
10.08 RIGHT OF SETOFF. If an Event of Default shall have occurred and be
continuing, each Lender and each its Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by Applicable Law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of any Loan Party against any and
all of the obligations of such Loan Party now or hereafter existing under this
Agreement or any other Loan Document to such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement or any other
Loan Document and although such obligations of such Loan Party are owed to a
branch or office of such Lender different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender and its
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender or such Affiliates may have.
Each Lender agrees to notify the Borrower and the Administrative Agent promptly
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.
10.09 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the Highest Lawful Rate. If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Highest
Lawful Rate, the excess interest shall be applied to the principal of the Term
Loan or, if it exceeds such unpaid principal, refunded to the Borrower. In
determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person
may, to the extent permitted by Applicable Law, (a) characterize any payment
that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.
10.10 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
50
10.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as the Term Loan or any other Obligations hereunder
shall remain unpaid or unsatisfied.
10.12 SEVERABILITY. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.13 REPLACEMENT OF LENDERS. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to the
outstanding principal of the Term Loan owing to such Lender, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with Applicable Laws.
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
10.14 GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE
AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS UNDER FEDERAL LAW.
(b) SUBMISSION TO JURISDICTION. EACH OF THE BORROWER AND LIMITED
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
51
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS
COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF TEXAS
(DALLAS DIVISION), AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE
COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST THE BORROWER OR LIMITED OR ANY OF THEIR RESPECTIVE PROPERTIES IN THE
COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH OF THE BORROWER AND LIMITED IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.16 USA PATRIOT ACT NOTICE. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
10.17 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
53
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
XXXXX OF XXXX L.P., a Texas limited partnership
By: XXXXX OF XXXX NEVADA CORPORATION, a
Nevada corporation,General Partner
By: /s/ XXXXXX X. XXXXX
--------------------------------------
Xxxxxx X. Xxxxx
Chairman, Chief Executive Officer and
President
XXXXX OF XXXX LIMITED, a Bermuda corporation
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Xxxxxx X. Xxxxx
Chairman, Chief Executive Officer and
President
BANC OF AMERICA MEZZANINE CAPITAL, LLC, as
Administrative Agent and as a Lender
By: /s/ XXXXXXX X. XXXXXXX, Xx.
-----------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Managing Director
