CREDIT AGREEMENT Dated as of September 27, 2002
Exhibit 10.1
TUESDAY MORNING CORPORATION,
as Borrower
and
THE GUARANTORS PARTY HERETO
CREDIT AGREEMENT
Dated as of September 27, 2002
FLEET NATIONAL BANK,
as Administrative Agent and Issuing Lender,
XXXXX FARGO BANK, N.A.,
as Syndication Agent,
LASALLE BANK, NATIONAL ASSOCIATION
U.S. BANK NATIONAL ASSOCIATION
WACHOVIA BANK, NATIONAL ASSOCIATION
as Documentation Agents
FLEET SECURITIES, INC.,
as Lead Arranger,
and
THE REVOLVING CREDIT LENDERS PARTY HERETO
TABLE OF CONTENTS
This Table of Contents is not part of the Credit Agreement to which it is attached but is inserted for convenience of reference only.
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CREDIT AGREEMENT, dated as of September 27, 2002, among
TUESDAY MORNING CORPORATION, a Delaware corporation (“Borrower,” which term shall include its successors and assigns); and
the GUARANTORS party hereto; and
each of the REVOLVING CREDIT LENDERS that is a signatory hereto identified under the caption “REVOLVING CREDIT LENDERS” on the signature pages hereto or that, pursuant to Section 12.6(b), shall become a “Revolving Credit Lender” hereunder (individually, a “Revolving Credit Lender” and, collectively, the “Revolving Credit Lenders”); and
FLEET NATIONAL BANK, as the issuer of Letters of Credit (in such capacity, together with its successors in such capacity, the “Issuing Lender”) and as administrative agent for the Revolving Credit Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”);
XXXXX FARGO BANK, N.A., as syndication agent (in such capacity, together with its successors in such capacity, the “Syndication Agent”); and
LASALLE BANK, NATIONAL ASSOCIATION, U.S. BANK NATIONAL ASSOCIATION, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Documentation Agents, (in such capacity, together with their successors in such capacity, the “Documentation Agents”)
in consideration of the mutual covenants herein contained and benefits to be derived herefrom.
Section 1. Definitions, Accounting Matters and Rules of Construction
1.1 Certain Defined Terms. As used herein, the following terms shall have the following meanings:
“Acquired Indebtedness” shall mean Indebtedness incurred or assumed in connection with an Acquisition permitted under Section 9.6(l) or Section 9.6(n), to the extent the incurrence or assumption of Indebtedness in connection with such Acquisition is not prohibited under Section 9.6(l) or Section 9.6(n); provided, however, that such Indebtedness was outstanding prior to and was not created in connection with or in contemplation of such Acquisition.
“Acquisition” shall mean, with respect to any Person, any transaction or series of related transactions for the direct or indirect (a) acquisition of all or substantially all of the Property of any other Person, or of any business or division of any other Person, (b) acquisition of in excess of 50% of the Equity Interests of any other Person, or otherwise causing any other Person to become a Subsidiary of such Person, or (c) merger or consolidation or any other combination with any other Person.
“Additional Collateral” see Section 9.12.
“Additional Obligors” see Section 9.20.
“Administrative Agent” see the introduction to this Agreement.
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“Advance Date” see Section 4.6.
“Affiliate” shall mean, with respect to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person, or, in the case of any Revolving Credit Lender which is an investment fund, the investment advisor thereof and any investment fund having the same investment advisor. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).
“Affiliate Transaction” see Section 9.16.
“Agreement” shall mean this Credit Agreement, as amended from time to time.
“Alternate Base Rate” shall mean for any day, a rate per annum that is equal to the higher of (a) the Prime Rate or (b) the Federal Funds Rate.
“Alternate Base Rate Loans” shall mean Loans that bear interest at rates based upon the Alternate Base Rate.
“Applicable Lending Office” shall mean, for each Revolving Credit Lender and for each Type of Loan, the “Lending Office” of such Revolving Credit Lender (or of an Affiliate of such Revolving Credit Lender) designated for such type of Loan on the signature pages hereof or such other office of such Revolving Credit Lender (or of an Affiliate of such Revolving Credit Lender) as such Revolving Credit Lender may from time to time specify to the Administrative Agent and Borrower as the office by which its Loans of such Type are to be made and maintained.
“Applicable Margin” shall be (a) from the Closing Date to the date (the “Reset Date”) Borrower shall have delivered to the Revolving Credit Lenders the financial statements, the Interest Rate Certificate and the Compliance Certificate required by Section 9.1 in respect of the fiscal quarter and fiscal year of Borrower ending December 31, 2002, with respect to Alternate Base Rate Loans, 0.375% and with respect to LIBOR Loans, 1.875%, unless the Leverage Ratio at the end of any fiscal quarter is at the level set forth for Tier I of Schedule 1.1(a), in which case the Applicable Margin shall be the percentages per annum for each applicable Type of Loan set forth opposite Tier I of Schedule 1.1(a), and (b) thereafter, when the Leverage Ratio at the end of the most recently ended fiscal quarter ending after the Reset Date is as set forth in Schedule 1.1(a), the percentage per annum set forth opposite such Leverage Ratio in Schedule 1.1(a). Any change in the Leverage Ratio shall be effective to adjust the Applicable Margin as of the date of receipt by the Administrative Agent of the Interest Rate Certificate most recently delivered pursuant to Section 9.1(d). If Borrower fails to deliver the Interest Rate Certificates and financial statements within the times specified in Sections 9.1(a), (b) and (d), such ratio shall be deemed to be that set forth opposite Tier I of Schedule 1.1(a) until Borrower delivers such Interest Rate Certificates and financial statements.
“Applicable Revolving Credit Fee Percentage” shall mean 0.50% per annum; provided, however, that from and after the Reset Date, the Applicable Revolving Credit Fee Percentage shall be, when the Leverage Ratio at the end of the most recently ended fiscal quarter ending after the Reset Date is as set forth in Schedule 1.1(a), the percentage per annum set forth opposite such Leverage Ratio in Schedule 1.1(a). Any change in the Leverage Ratio shall be effective to adjust the Applicable Revolving Credit Fee
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Percentage as of the date of receipt by the Administrative Agent of the Interest Rate Certificate most recently delivered pursuant to Section 9.1(d). If Borrower fails to deliver the Interest Rate Certificates and financial statements within the times specified in Sections 9.1(a), (b) and (d), such ratio shall be deemed to be that set forth opposite Tier I of Schedule 1.1(a) until Borrower delivers such Interest Rate Certificates and financial statements.
“Appraised Inventory Liquidation Value” shall mean the product of (a) the aggregate value of Eligible Inventory (net of Inventory Reserves) multiplied by (b) that percentage, determined from the then most recent appraisal of the Borrower’s Inventory undertaken by, or at the request of, the Administrative Agent, to reflect the appraiser’s estimate of the net recovery on the Borrower’s Inventory in the event of an in-store liquidation of that Inventory.
“Availability Reserves” shall mean such reserves as the Administrative Agent from time to time determines in the Administrative Agent’s discretion as being appropriate to reflect the impediments to the Agents’ ability to realize upon the Pledged Collateral.
“Bankruptcy Code” shall mean Title 11, U.S.C., as amended from time to time.
“Benefit Arrangement” shall mean at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.
“Borrower” see the introduction to this Agreement.
“Borrowing Base” shall mean, as at any date, (i) the lesser of (A) up to sixty five percent (65%) of the aggregate value of Eligible Inventory (net of Inventory Reserves) at said date or (B) up to eighty-five percent (85%) of the Appraised Inventory Liquidation Value of Eligible Inventory (the lesser of (A) or (B) being referred to as the “Normal Advance Rate”), minus (ii) Availability Reserves; provided, however, that if no Event of Default has occurred and is continuing, the Revolving Credit Lenders will, upon Borrower’s request, make advances of up to the sum of (x) the Normal Advance Rate plus (y) $20.0 Million (the “Increased Advance Rate”), minus (z) Availability Reserves; provided, however, that the Increased Advance Rate shall be in effect only during the Overadvance Period.
“Borrowing Base Certificate” shall mean a certificate of a senior financial officer of Borrower, substantially in the form of Exhibit C-2 and appropriately completed.
“Business Day” shall mean any day (a) on which commercial banks are not authorized or required to close in Boston, Massachusetts or Dallas, Texas and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a Continuation or Conversion of or into, or an Interest Period for, a LIBOR Loan or a notice by Borrower with respect to any such borrowing, payment, prepayment, Continuation, Conversion or Interest Period, that is also a day on which dealings in Dollar deposits are carried out in the London interbank market.
“Capital Expenditures” shall mean, for any period, (a) any direct or indirect (by way of acquisition of securities of a Person or the expenditure of cash or the incurrences of Indebtedness) expenditures made or costs incurred in respect of the purchase or other acquisition, maintenance or repair (to the extent capitalized on the balance sheet of such
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Person) of fixed or capital assets, and (b) Capital Lease Obligations incurred by the Borrowers during such period, all of the foregoing as determined in accordance with GAAP. Notwithstanding the foregoing, “Capital Expenditures” shall not include expenditures made with the Net Available Proceeds of any Casualty Event or any Taking, Destruction, or loss of title with respect to Real Property.
“Capital Lease,” as applied to any Person, shall mean any lease of any Property by that Person as lessee which, in conformity with GAAP, is required to be classified and accounted for as a capital lease on the balance sheet of that Person.
“Capital Lease Obligations” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a Capital Lease, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Casualty Event” shall mean, with respect to any Property (other than Real Property) of any Person, any loss of or damage to, or any condemnation or other taking of, such Property for which such Person or any of its Subsidiaries receives insurance proceeds or proceeds of a condemnation award or other compensation. Casualty Event shall not include any Taking or Destruction or loss of title to Real Property.
“CERCLA” see Section 8.11.
“Change of Control” shall mean any transaction or event (including, without limitation, an issuance, sale or exchange of Equity Interests, a merger or consolidation, or a dissolution or liquidation) occurring on or after the Closing Date (whether or not approved by the board of directors of Borrower) as a direct or indirect result of which: (a)(i) any “Person” or any “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) (other than the Permitted Holders) shall (directly or indirectly) beneficially own in the aggregate shares of Equity Interests of Borrower having 33-1/3% or more of the aggregate voting power of all shares of Equity Interests of Borrower at the time outstanding; provided, however, that the foregoing shall be a Change of Control only if the Permitted Holders beneficially own a lesser percentage of the aggregate voting power of all shares of Equity Interests of Borrower at the time outstanding than such Person or group or do not have the right or ability by voting power, contract or otherwise to elect or designate for elections at least a majority of the board of directors of Borrower; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of Borrower (together with any new directors whose election by such board of directors or whose nomination for election by the shareholders of Borrower was approved by a vote of at least 66-2/3% of the directors of Borrower then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of Borrower then in office; or (b) any event or circumstance constituting a “change of control” or other similar occurrence under documentation evidencing or governing any Indebtedness of Borrower in a principal amount in excess of $5.0 million (other than under the Credit Documents) shall occur which results in an obligation of Borrower to prepay, purchase, offer to purchase, redeem or defease all or a portion of such Indebtedness. For purposes of this definition, the terms “beneficially own” and “group” shall have the respective meanings ascribed to them pursuant to Section 13(d) of the United States Securities Exchange Act of 1934.
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“Closing Date” shall mean the date upon which the conditions specified in Section 7.1 are satisfied (or waived in accordance with Section 12.4).
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
“Collateral” shall mean all of the Pledged Collateral and Mortgaged Real Property.
“Collateral Account” see Section 4.1 of the Security Agreement.
“Consolidated Adjusted Income Tax Expense” has the same meaning herein as the term “Consolidated Income Tax Expense” in the Indenture as in effect on the date hereof. Specifically, the term “Consolidated Adjusted Income Tax Expense” means, for any period, the provision for federal, state, local and foreign income taxes of the Borrower and all Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.
“Consolidated Adjusted Interest Expense” has the same meaning herein as the term “Consolidated Interest Expense” in the Indenture as in effect on the date hereof. Specifically, the term “Consolidated Adjusted Interest Expense” means, for any period, without duplication, (1) the sum of (a) the interest expense of the Borrower and its Restricted Subsidiaries for such period, including, without limitation, (i) amortization of debt discount, (ii) the net cost of Swap Agreements (including amortization of discounts), (iii) the interest portion of any deferred payment obligation and (iv) amortization of debt issuance costs, plus (b) the interest component of Capital Lease Obligations of the Borrower and its Restricted Subsidiaries during such period, plus (c) cash dividends due (whether or not declared) on Preferred Stock by the Borrower and any Restricted Subsidiary, plus (d) cash dividends due (whether or not declared) on Redeemable Capital stock by the Borrower and any Restricted Subsidiary, in each case as determined on a consolidated basis in accordance with GAAP, less (2) interest on the Exchange Debentures (as defined in the Indenture) outstanding on the Exchange Date (as defined in the Indenture) paid in kind with Exchange Debentures and on Exchange Debentures so issued as payment in kind interest, all in accordance with the Debenture Indenture (as defined in the Indenture) as in effect on the issuance date of the notes under the Indenture; provided that (x) the Consolidated Adjusted Interest Expense attributable to interest on any Indebtedness computed on a pro forma basis and (A) bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period and (B) which was not outstanding during the period for which the computation is being made but which bears, at the option of the Borrower, a fixed or floating rate of interest, shall be computed by applying at the option of the Borrower, either the fixed or floating rate, and (y) in making such computation, the Consolidated Adjusted Interest Expense attributable to interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period; provided further that, notwithstanding the foregoing, the interest rate with respect to any Indebtedness covered by any Swap Agreement shall be deemed to be effective interest rate with respect to such Indebtedness after taking into account such Swap Agreement.
“Consolidated Adjusted Non-Cash Charges” has the same meaning herein as the term “Consolidated Non-Cash Charges” in the Indenture as in effect on the date hereof. Specifically, the term “Consolidated Adjusted Non-Cash Charges” means, for any period, the aggregate depreciation, amortization, depletion and other non-cash expenses of the Borrower and any Restricted Subsidiary reducing Consolidated Adjusted Net Income for
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such period, determined on a consolidated basis in accordance with GAAP (excluding any such non-cash charge that requires an accrual of or reserve for cash charges for any future period).
“Consolidated Adjusted Net Income” has the same meaning herein as the term “Consolidated Adjusted Net Income” in the Indenture as in effect on the date hereof. Specifically, the term “Consolidated Adjusted Net Income” shall mean, for any period, the consolidated net income of the Borrower and its Restricted Subsidiaries for such period, as determined in accordance with GAAP, adjusted by excluding, without duplication, (a) any net after-tax extraordinary gains or losses (less all fees and expenses relating thereto), (b) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, (c) the portion of net income (or loss) of any Person (other than the Borrower or a Restricted Subsidiary), including Unrestricted Subsidiaries, in which the Borrower or a Restricted Subsidiary has an ownership interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any Restricted Subsidiary in cash dividends or distributions during such period, (d) the net income (or loss) of any Person combined with the Borrower or any Restricted Subsidiary on a “pooling of interests” basis attributable to any period prior to the date of combination, and (e) the net income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not at the date of determination permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Restricted Subsidiary or its stockholders.
“Consolidated EBITDA” shall mean, for any Measurement Period, the sum (without duplication) of the amounts for such period of (a) Consolidated Net Income, (b) income tax expense to the extent deducted in determining Consolidated Net Income for such period, (c) Consolidated Interest Expense to the extent deducted in determining Consolidated Net Income for such period, and (d) depreciation expense and amortization expense to the extent deducted in determining Consolidated Net Income for such period, each such item described in clauses (b)-(d) determined in accordance with GAAP.
“Consolidated Interest Expense” shall mean, for any period, for Borrower and its Consolidated Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP) all interest expense during such period (whether or not actually paid during such period), other than any non-cash interest expense in respect of Indebtedness in the form of accretion of original issue discount or pay-in-kind issuances of additional debt in lieu of cash interest and other than amortization of financing fees.
“Consolidated Minimum Interest Coverage Ratio” of the Borrower means, for any period, the ratio of (a) the sum of Consolidated Adjusted Net Income and, to the extent deducted in computing Consolidated Adjusted Net Income, Consolidated Adjusted Interest Expense, Consolidated Adjusted Income Tax Expense and Consolidated Adjusted Non-Cash Charges, in each case, for such period to (b) the Consolidated Adjusted Interest Expense for such period.
“Consolidated Net Income” shall mean, for any Measurement Period, the consolidated net income (loss) of Borrower and its Consolidated Subsidiaries calculated on a consolidated basis in accordance with GAAP.
“Consolidated Rental Expense” shall mean, for any period, the aggregate amount of all rents paid or to be incurred under all leases of Real Property of Borrower and its
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Consolidated Subsidiaries as lessees (net of sublease income), calculated in accordance with GAAP.
“Consolidated Subsidiary” shall mean, for any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of such Person in accordance with GAAP.
“Consolidated Tangible Net Worth” shall mean, at any particular date, the difference of (a) the aggregate book value of all of the assets (net of all applicable reserves) of the Borrower which would, in accordance with GAAP, appear as assets upon a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries prepared as at such date, less (b) the sum of the following:
(i) without duplication, all proper reserves which would, in accordance with GAAP, be classified as liabilities upon a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at such particular date;
(ii) the Consolidated Total Liabilities as at such particular date;
(iii) all intangible assets (including, without limitation, franchise, license, permits, copyrights, patents, trademarks, trade names, goodwill, covenants not to compete, loan acquisition fees and other like intangibles) of the Borrower and its Consolidated Subsidiaries that are included within the consolidated balance sheet of such parties as at such particular date;
(iv) all obligations and liabilities owed to the Borrower or its Consolidated Subsidiaries by any Affiliate or stockholder or employee (or relative of any employee) of the Borrower or its Consolidated Subsidiaries that are included as assets within the consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at such particular date; and
(v) the value of any minority interests in Subsidiaries.
“Consolidated Total Liabilities” shall mean, at any particular date, all of the liabilities of the Borrower and its Consolidated Subsidiaries which, in accordance with GAAP, would be classified as a liability upon a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries prepared as at such particular date.
“Contingent Obligation” shall mean, as to any Person, any direct or indirect liability of such Person, whether or not contingent, with or without recourse: (a) with respect to any Indebtedness, lease, dividend, letter of credit or other obligation (the “primary obligations”) of another Person (the “primary obligor”), including any obligation of such Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefor, (ii) to advance or provide funds for the payment or discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each of (a)(i)-(iv), a “Guaranty Obligation”); (b) with respect to any Surety Instrument (other than any Letter of Credit)
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issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings or payments; (c) to purchase any materials, supplies or other property from, or to obtain the services of, another Person if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered; or (d) in respect of any Swap Contract; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection or standard contractual indemnities entered into, in each case in the ordinary course of business. The amount of any Contingent Obligation shall (x) in the case of a Guaranty Obligation, be deemed equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, and (y) in the case of other Contingent Obligations, be equal to the maximum reasonably anticipated liability in respect thereof.
“Continue,” “Continuation” and “Continued” shall refer to the continuation pursuant to Section 2.10 of a LIBOR Loan from one Interest Period to the next Interest Period.
“Convert,” “Conversion” and “Converted” shall refer to a conversion pursuant to Section 2.10 of one Type of Loan into another Type of Loan, which may be accompanied by the transfer by a Revolving Credit Lender (at its sole discretion) of a Loan from one Applicable Lending Office to another.
“Covered Taxes” see Section 5.6(a).
“Credit Documents” shall mean this Agreement, the Notes, any Letter of Credit Documents and any Security Documents, all of the foregoing whether executed and delivered on or after the Closing Date.
“Creditor” shall mean the Administrative Agent, the Issuing Lender, any Revolving Credit Lender or any Affiliate of a Revolving Credit Lender party to a Swap Contract with an Obligor.
“Debt Issuance” shall mean the incurrence by any Obligor of any Indebtedness after the Closing Date (other than as permitted by Section 9.8).
“Default” shall mean an event that with notice or lapse of time or both would become an Event of Default.
“Destruction” shall mean any damage to, or loss or destruction of, any Real Property or Mortgaged Real Property. Destruction shall not include any Casualty Event.
“Disposition” shall mean (a) any conveyance, sale, lease, assignment, transfer or other disposition (including by way of merger or consolidation and including any sale-leaseback transaction) of any Property (including receivables and shares of Equity Interests of any Subsidiary or joint venture of any Person) (whether now owned or hereafter acquired) by any Obligor or any of its Subsidiaries to any Person, (b) any issuance of any Equity Interests in any Subsidiary to any Person other than Borrower or any Wholly Owned Subsidiary, and (c) any liquidating or other non-ordinary course dividend or distribution received by any Obligor or any of its Subsidiaries in respect of any joint venture or similar enterprise, excluding, however, any Excluded Disposition.
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“Disposition Event” shall mean the receipt by any Obligor or any of its Subsidiaries of cash proceeds or cash distributions of any kind from Property received in consideration for a Disposition.
“Disqualified Capital Stock” shall mean, with respect to any Person, any Equity Interests of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof, in whole or in part, on or prior to March 31, 2007; provided, however, that no Equity Interests issued to management of Borrower shall be deemed Disqualified Capital Stock by virtue of the fact that they may be put to Borrower upon the occurrence of certain events disclosed to the Revolving Credit Lenders prior to the Closing Date.
“Dividend Payment” shall mean dividends (in cash, Property or obligations) on, or other payments or distributions on account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition of, any shares of any Equity Interests of any Obligor or any of its Subsidiaries, or of any Equity Rights, but excluding (a) dividends payable in respect of shares of Equity Interests through the issuance of additional shares of Qualified Capital Stock, (b) any redemption or exchange of any Equity Interests of such Obligor through the issuance of Qualified Capital Stock of such Obligor and (c) cash dividends paid in respect of any fractional shares that would otherwise be issued as dividends.
“Dollars” and “$” shall mean lawful money of the United States of America.
“Domestic Subsidiary” shall mean any Subsidiary that is not a Foreign Subsidiary.
“Eligible Inventory” shall mean Inventory valued at lower of cost or market on a “first in-first out” (“FIFO”) basis or based on specific identification with respect to Inventory in the warehouse that constitutes first quality finished goods, and that: (a) is not, in the Administrative Agent’s reasonable judgment, obsolete or unmerchantable (it being understood that Borrower is in the business of buying closeout or discontinued merchandise); (b) upon which the Administrative Agent, for the benefit of the Revolving Credit Lenders, has a first priority perfected security interest subject only to Prior Liens; and (c) the Administrative Agent otherwise deems eligible as the basis for Revolving Credit Loans based on such other credit and collateral considerations as the Administrative Agent may from time to time establish in its reasonable discretion consistent with its general policies and business judgment. Without intending to limit the Administrative Agent’s discretion to establish other criteria of eligibility, no spare parts, packaging and shipping material, supplies, slow-moving or obsolete Inventory, sample Inventory, scratched or dented Inventory, Inventory in transit (unless it meets the requirements of clause (iii), below) , xxxx and hold Inventory, returned or defective Inventory or Inventory delivered to Borrower on consignment shall constitute Eligible Inventory. Eligible Inventory shall not include Inventory stored at locations other than those locations either owned by Borrower or locations for which an appropriate UCC filing has been filed in the appropriate offices to perfect the security interest in such Inventory. Eligible Inventory shall not include (i) Inventory with respect to which the representations and warranties set forth in the Security Agreement applicable to Inventory are not true and correct in all material respects; (ii) Inventory in respect of which the Security Agreement, after giving effect to the related filings of financing
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statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien (subject to Prior Liens) or security interest in favor of the Revolving Credit Lenders securing the Obligations and as to which no other Liens exist, other than Permitted Liens; (iii) Inventory located outside the United States which is being shipped to Borrower, other than any such Inventory which meets each of the following conditions: (A) such Inventory would otherwise qualify as Eligible Inventory and would not be excluded by any other clause of this definition, (B) such Inventory is in transit to Borrower on an F.O.B. shipping basis, and (C) such Inventory is fully paid for by Borrower and fully insured on terms acceptable to the Administrative Agent pursuant to insurance which names the Administrative Agent as loss payee for the benefit of the Revolving Credit Lenders, and the Administrative Agent, if it so requests, shall have received (x) all negotiable instruments of title issued in connection with such shipment or (y) a customs broker agency agreement reasonably acceptable to the Administrative Agent; provided, however, that not more than $10.0 million of Inventory may be included at any time pursuant to this clause (iii); and (iv) Inventory located outside the United States which is not being shipped to Borrower unless arrangements for the granting and perfection of a security interest in such Inventory have been made in a manner acceptable to the Administrative Agent in its sole discretion. In addition, the buying, freight and distribution costs (“UNICAP Costs”) and the product development expenses which are a component of the cost of Inventory will not be considered as part of the value of the Inventory.
“Eligible Person” shall mean (a) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100.0 million; (b) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having a combined capital and surplus in a dollar equivalent amount of at least $100.0 million; provided, however, that such bank is acting through a branch or agency located in the country in which it is organized or another country that is also a member of the OECD; (c) an insurance company, mutual fund entity which is regularly engaged in making, purchasing or investing in loans or securities or other financial institution organized under the laws of the United States, any state thereof, any other country that is a member of the OECD or a political subdivision of any such country with assets, or assets under management, in a dollar equivalent amount of at least $100.0 million; (d) any Affiliate of a Revolving Credit Lender; and (e) any other entity (other than a natural person) which is an “accredited investor” (as defined in Regulation D under the United States Securities Act of 1933, as amended) which extends credit or buys loans as one of its regular businesses including, but not limited to, insurance companies, mutual funds, and investment funds. With respect to any Revolving Credit Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of such Revolving Credit Lender or by an Affiliate of such investment advisor shall be treated as a single Eligible Person.
“Environmental Claim” shall mean, with respect to any Person, any written notice, claim, demand or other communication (collectively, a “claim”) by any other Person alleging such Person’s liability for any costs, cleanup costs, response or corrective action costs, damages to natural resources or other Property, personal injuries, fines or penalties arising out of or resulting from (i) the presence, Release or threatened Release into the environment, of any Hazardous Material at any location, whether or not owned by such Person, or (ii) any violation of any Environmental Law. The term “Environmental Claim” shall include any claim by any Person seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting
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from the presence of Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.
“Environmental Laws” shall mean any and all present and future applicable laws, rules or regulations of any Governmental Authority, any orders, decrees, judgments or injunctions and the common law in each case as now or hereafter in effect, relating to pollution or protection of human health, safety or the environment, including without limitation, ambient air, indoor air, soil, surface water, ground water, wetlands, land or subsurface strata, including, without limitation, those relating to Releases or threatened Releases of Hazardous Materials into the environment, or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.
“Equity Interests” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting), of capital of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, whether outstanding on the Closing Date or issued after the Closing Date.
“Equity Issuance” shall mean any of (a) any issuance or sale after the Closing Date by any Obligor or Subsidiary or any direct or indirect parent of Borrower of (x) any Equity Interests (including any Equity Interests issued upon exercise of any Equity Rights) or any Equity Rights, or (y) any other security or instrument representing an Equity Interest (or the right to obtain any Equity Interest) in the issuing or selling Person, or (b) the receipt by Borrower or any Subsidiary after the Closing Date of any capital contribution (whether or not evidenced by any Equity Interest issued by the recipient of such contribution) other than from Borrower or any Subsidiary, excluding (x) any issuance of Equity Interests (or Equity Rights) to the seller or sellers in consideration for an Acquisition, (y) the issuance of Equity Rights to management and consultants of Borrower (and the exercise thereof) in an amount not to exceed 10% (on a fully diluted basis) of the outstanding common Equity Interests of Borrower, and (z) any issuance of Equity Interests by the Borrower in connection with any secondary offering of Qualified Capital Stock by Madison Dearborn Partners, Inc., Madison Dearborn Capital Partners II, L.P. or any of their Affiliates (to the extent that the Borrower does not receive any Net Available Proceeds therefrom). For purposes of this definition, a Person shall be deemed the “direct or indirect parent” of Borrower only if such Person’s assets consist solely of Equity Interests of Borrower or Equity Interests of another direct of indirect parent of Borrower and if Borrower is directly or indirectly a Wholly Owned Subsidiary of such Person; provided, however, that in no event, for purposes of this definition, shall Madison Dearborn or any other fund managed or sponsored by Madison Dearborn be the “direct or indirect parent” of Borrower.
“Equity Rights” shall mean, with respect to any Person, any outstanding subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including any stockholders’ or voting trust agreements) for the issuance, sale, registration or voting of, or outstanding securities convertible into, any additional shares of Equity Interests of any class of such Person.
“ERISA” shall mean the United States Employee Retirement Income Security Act of 1974, as amended.
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“ERISA Group” shall mean Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Code.
“Event of Default” see Section 10.
“Excess Availability” shall mean, at any time, (a) the lesser of (i) the Revolving Credit Commitments in effect at such time or (ii) the Borrowing Base in effect at such time minus (b) the sum of (i) the aggregate principal amount of (without duplication) all Revolving Credit Loans then outstanding, plus (ii) the aggregate principal amount of Swing Loans then outstanding, plus (iii) the aggregate amount of all Letter of Credit Liabilities then outstanding.
“Existing Affiliate Agreements” see Section 9.16.
“Existing Letters of Credit” means those letters of credit described on Schedule 1.1(c) hereto which have been issued by Fleet National Bank under the Borrower’s existing credit facility with, among others, Fleet National Bank.
“Extended Revolving Credit Commitment Termination Date” shall mean March 27, 2007.
“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, however, that (a) if the day for which such rate is to be determined 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 such rate is not so published for any Business Day, the Federal Funds Rate for such Business Day shall be the average rate quoted to the Administrative Agent on such Business Day on such transactions by three federal funds brokers of recognized standing, as determined by the Administrative Agent.
“Fee Letter” shall mean the Fee Letter dated as of July 17, 2002 by and among Fleet Securities, Inc., Fleet National Bank and Borrower.
“Fixed Charges” shall mean, for any period of calculation, the sum of (i) Consolidated Interest Expense of Borrower and its Consolidated Subsidiaries, (ii) the sum of all scheduled principal payments on any Indebtedness of Borrower, and voluntary prepayments of Indebtedness (other than Revolving Credit Loans unless and to the extent accompanied by a permanent reduction of Revolving Credit Commitments), in each case to the extent made from internally generated funds of Borrower and the Subsidiaries, and (iii) Consolidated Rental Expense.
“Foreign Plan” see Section 8.7.
“Foreign Subsidiary” shall mean any direct or indirect Subsidiary organized outside of the United States as defined in Section 7701(a)(9) of the Code (or any successor provision).
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“Funding Date” shall mean the date of the making of any extension of credit hereunder (including the Closing Date).
“GAAP” shall mean generally accepted accounting principles set forth as of the relevant date in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.
“Governmental Authority” shall mean any government or political subdivision of the United States or any other country or any agency, authority, board, bureau, central bank, commission, department or instrumentality thereof or therein, including, without limitation, any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to such government or political subdivision.
“Guarantee” shall mean the guarantee of each Guarantor pursuant to Section 6.
“Guaranteed Obligations” see Section 6.1.
“Guarantors” shall mean each of the direct and indirect Domestic Subsidiaries of Borrower listed on Schedule 1.1(b), and each direct and indirect Domestic Subsidiary that guarantees the payment of the Obligations of Borrower hereunder pursuant to Section 9.20 and the other Credit Documents.
“Guaranty Obligation” see the definition of Contingent Obligation.
“Hazardous Material” shall mean any pollutant, contaminant, toxic, hazardous or extremely hazardous substance, constituent or waste, or any other constituent, waste, material, compound or substance including, without limitation, petroleum including crude oil or any fraction thereof, or any petroleum product, subject to regulation under any Environmental Law.
“Increased Advance Rate” see the definition of Borrowing Base.
“Increased Facility Amount” shall mean an increase in the Revolving Credit Commitments (whether by the Revolving Credit Lenders or New Lenders) of up to $25.0 Million.
“Indebtedness” shall mean, for any Person, without duplication, (a) all indebtedness for borrowed money of such Person; (b) all obligations issued, undertaken or assumed by such Person as the deferred purchase price of Property or services (other than trade payables and accrued expenses not overdue by more than 90 days incurred in the ordinary course of business on ordinary terms); (c) all non-contingent reimbursement or payment obligations of such Person with respect to Surety Instruments (such as, for example, unpaid reimbursement obligations in respect of a drawing under a letter of credit); (d) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of Property or businesses; (e) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement, in either case with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession
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or sale of such Property); (f) all Capital Lease Obligations of such Person; (g) all net obligations of such Person with respect to Swap Contracts (such obligations to be equal at any time to the aggregate net amount that would have been payable by such Person at the most recent fiscal quarter end in connection with the termination of such Swap Contracts at such fiscal quarter end); (h) all amounts required to be paid by such Person as a guaranteed payment to partners, including any mandatory redemption of shares or interests; (i) all indebtedness of other Persons referred to in clauses (a) through (h) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; and (j) all Contingent Obligations of such Person in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (i) above. Indebtedness shall not include (i) accounts extended by suppliers in the ordinary course on normal trade terms in connection with the purchase of goods and services, (ii) obligations under operating leases (as well as contingent obligations in respect thereof) or (iii) wages, salaries, accrued vacations or deferred compensation. The Indebtedness of any Person shall include any Indebtedness of any partnership in which such Person is the general partner.
“Indemnitee” see Section 12.3.
“Indenture” shall mean the Indenture, dated as of December 29, 1997, among the Borrower, the Subsidiary Guarantors named therein, and Xxxxxx Trust and Savings Bank, an Illinois corporation, as Trustee, as in effect on the Closing Date.
“Initial Revolving Credit Commitment Termination Date” shall mean March 27, 2006.
“Intercompany Note” shall mean a promissory note substantially in the form of Exhibit B.
“Interest Period” shall mean, with respect to any LIBOR Loan, each period commencing on the date such LIBOR Loan is made or Converted from an Alternate Base Rate Loan or the last day of the next preceding Interest Period for such LIBOR Loan and (subject to the requirements of Sections 2.1(a)(i) and (iii) and 2.10) ending on the numerically corresponding day in the first, second, third or sixth calendar month thereafter, as Borrower may select as provided in Section 4.5, except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest Period for any Revolving Credit Loan would otherwise end after the Revolving Credit Commitment Termination Date, such Interest Period shall end on the Revolving Credit Commitment Termination Date; (ii) each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); and (iii) notwithstanding clause (i) above, no Interest Period shall have a duration of less than one month and, if the Interest Period for any LIBOR Loan would otherwise be a shorter period, such Loan shall not be available hereunder as a LIBOR Loan for such period.
“Interest Rate Certificate” shall mean an Officer’s Certificate substantially in the form of Exhibit C-1, delivered pursuant to Section 9.1(d), demonstrating in reasonable detail the calculation of the Leverage Ratio as of the last day of the Measurement Period
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then last ended on or immediately prior to the date such certificate is required to be delivered.
“Inventory” shall include, without limitation, all of Borrower’s now owned or hereafter acquired “inventory” as defined in the UCC and also all: (a) Goods (as such term is defined in the UCC) which are leased by a Person as lessor; are held by a Person for sale or lease or to be furnished under a contract of service; are furnished by a Person under a contract of service; or consist of raw materials, work in process, or materials used or consumed in a business; (b) Goods of said description in transit; (c) Goods of said description which are returned, repossessed and rejected; (d) packaging, advertising, and shipping materials related to any of the foregoing; (e) all names, marks, and General Intangibles (as such term is defined in the UCC) affixed or to be affixed or associated thereto; and (f) Documents (as such term is defined in the UCC) which represent any of the foregoing.
“Inventory Reserves” shall mean, without duplication, such Reserves as may be established from time to time by the Administrative Agent in the Administrative Agent’s reasonable, good faith discretion with respect to the determination of the saleability, at retail, of the Eligible Inventory or which reflect such other factors as affect the market value of the Eligible Inventory.
“Investment” shall mean, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person; (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person); (c) any capital contribution to (by means of any transfer of cash or other Property to others or any payment for Property or services for the account or use of others) any other Person; (d) the entering into, or direct or indirect incurrence, of any Contingent Obligation with respect to Indebtedness or other liability of any other Person; (e) the entering into of any Swap Contract; or (f) any agreement to make any Investment (including any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such sale).
“Issuing Lender” shall mean Fleet National Bank, or any of its Affiliates, or such other Revolving Credit Lender or Revolving Credit Lenders selected by the Administrative Agent reasonably satisfactory to Borrower, as the issuer of Letters of Credit under Section 2.3, together with its successors and assigns in such capacity.
“Lead Arranger” shall mean Fleet Securities, Inc.
“Lease” shall mean any lease, sublease, franchise agreement, license, occupancy or concession agreement.
“Letter of Credit” see Section 2.3.
“Letter of Credit Documents” shall mean, with respect to any Letter of Credit, collectively, any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time.
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“Letter of Credit Interest” shall mean, for each Revolving Credit Lender, such Revolving Credit Lender’s participation interest (or, in the case of the Issuing Lender, the Issuing Lender’s retained interest) in the Issuing Lender’s liability under Letters of Credit and such Revolving Credit Lender’s rights and interests in Reimbursement Obligations and fees, interest and other amounts payable in connection with Letters of Credit and Reimbursement Obligations.
“Letter of Credit Liability” shall mean, without duplication, at any time and in respect of any Letter of Credit, the sum of (a) the undrawn face amount of such Letter of Credit, plus (b) the aggregate unpaid principal amount of all Reimbursement Obligations of Borrower at such time due and payable in respect of all drawings made under such Letter of Credit.
“Leverage Ratio” shall mean, at any date, the ratio of (x) Total Debt at such date to (y) Consolidated EBITDA for the Measurement Period ended on such date, or, if such date is not the end of a fiscal quarter, the Measurement Period ended immediately prior to such date.
“LIBOR Base Rate” shall mean, with respect to any LIBOR Loan for any Interest Period therefor, the rate per annum determined by the Administrative Agent to be the arithmetic mean (rounded to the nearest 1/100th of 1%) of the offered rates for deposits in Dollars with a term comparable to such Interest Period that appears on the Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined below) at approximately 11:00 a.m., London, England time, on the second full Business Day preceding the first day of such Interest Period; provided, however, that if there shall at any time no longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page, “LIBOR Rate” shall mean, with respect to each day during each Interest Period pertaining to LIBOR Loans comprising part of the same Borrowing, the rate per annum equal to the rate at which the Administrative Agent is offered deposits in Dollars at approximately 11:00 a.m., London, England time, two Business Days prior to the first day of such Interest Period in the London interbank market for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to its portion of the amount of such LIBOR Loan to be outstanding during such Interest Period. “Telerate British Bankers Assoc. Interest Settlement Rates Page” shall mean the display designated as Page 3750 on the Telerate System Incorporated Service (or such other page as may replace such page on such service for the purpose of displaying the rates at which Dollar deposits are offered by leading banks in the London interbank deposit market).
“LIBOR Loans” shall mean Loans that bear interest at rates based on rates referred to in the definition of “LIBOR Base Rate” in this Section 1.1.
“LIBOR Rate” shall mean, for any LIBOR Loan for any Interest Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the LIBOR Base Rate for such Loan for such Interest Period divided by 1 minus the Reserve Requirement (if any) for such Loan for such Interest Period.
“Lien” shall mean, with respect to any Property, any mortgage, lien, pledge, claim, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement in respect of such Property, including any easement, right-of-way or other encumbrance on title to Real Property, other than ordinary course rights of set-off of depositary banks. For purposes of the Credit Documents, a Person shall be
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deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property.
“Loans” shall mean the Revolving Credit Loans and the Swing Loans.
“Losses” of any Person shall mean the losses, liabilities, claims (including those based upon negligence, strict or absolute liability and liability in tort), damages, reasonable expenses, obligations, penalties, actions, judgments, encumbrances, liens, penalties, fines, suits, reasonable and documented costs or disbursements of any kind or nature whatsoever (including reasonable fees and expenses of counsel in connection with any Proceeding commenced or threatened in writing, whether or not such Person shall be designated a party thereto) at any time (including following the payment of the Obligations) incurred by, imposed on or asserted against such Person.
“Majority Revolving Credit Lenders” shall mean (a) Revolving Credit Lenders holding at least fifty-one percent (51%) of the aggregate amount of the Revolving Credit Commitments then outstanding, and (b) if the Revolving Credit Commitments have been terminated, Revolving Credit Lenders holding at least fifty-one percent (51%) of the sum of (without duplication) (i) the aggregate principal amount of outstanding Revolving Credit Loans, plus (ii) the aggregate amount of all Letter of Credit Liabilities.
“Margin Stock” shall mean margin stock within the meaning of Regulations T, U and X.
“Material Adverse Change” shall mean a material adverse change or any condition or event that could reasonably be expected to result in a material adverse change in the business, assets, liabilities (contingent or otherwise), operations, condition (financial or otherwise), solvency, properties or material agreements or prospects of Borrower and its Subsidiaries, taken as a whole.
“Material Adverse Effect” shall mean any of (a) a material adverse effect or any condition or event that could reasonably be expected to result in a material adverse effect on the business, assets, liabilities (contingent or otherwise), operations, condition (financial or otherwise), solvency, properties or material agreements or prospects of Borrower and its Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Obligors to consummate in a timely manner the Transactions or to perform their obligations under any Credit Document or (c) an adverse effect on the legality, binding effect or enforceability of any material provision of any Credit Document or affecting any material rights and remedies of the Revolving Credit Lenders thereunder.
“Material Plan” means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $2.0 million as of the end of its last annual valuation period.
“Measurement Period” shall mean the most recent four full fiscal quarters of Borrower for which financial statements have been provided pursuant to Section 9.1.
“Mortgage” shall mean an agreement creating and evidencing a Lien on a Mortgaged Real Property, which shall be substantially in the form of Exhibit F, containing such schedules and including such additional provisions and other deviations from such Exhibit as shall be necessary to conform such document to applicable or local law or as shall be customary under local law, as the same may at any time be amended, modified or supplemented in accordance with the terms thereof and hereof.
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“Mortgaged Real Property” shall mean each Real Property which shall be subject to a Mortgage delivered on the Closing Date or thereafter pursuant to Sections 9.6(m) or 9.12.
“Multiemployer Plan” shall mean at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA (a) to which any member of the ERISA Group is then making or accruing an obligation to make contributions, (b) to which any member of the ERISA Group has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period, or (c) with respect to which Borrower or a Subsidiary could incur liability.
“NAIC” shall mean the National Association of Insurance Commissioners.
“Net Available Proceeds” shall mean:
(a) in the case of any Disposition Event, the amount of Net Cash Payments received by any Obligor or any of its Subsidiaries in connection with such Disposition Event less deductions for amounts applied to Indebtedness secured by Prior Liens on the asset sold, taxes (including income taxes) and costs of sale;
(b) in the case of any Casualty Event, the aggregate amount of proceeds of insurance, condemnation awards and other compensation received by any Obligor or any of its Subsidiaries in respect of such Casualty Event net of (i) reasonable expenses incurred by such Obligor and its Subsidiaries in connection therewith, (ii) repayments of Indebtedness to the extent secured by a Prior Lien on such Property and (iii) any income and transfer taxes payable by any Obligor or any of its Subsidiaries in respect of such Casualty Event;
(c) in the case of any Equity Issuance or any Debt Issuance, the aggregate amount of all cash and other property received by any Obligor and its Subsidiaries in respect thereof net of all reasonable investment banking fees, discounts and commissions, legal fees, consulting fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses, actually incurred and satisfactorily documented in connection therewith;
(d) in the case of any Taking or Destruction, the Net Award or Net Proceeds, as applicable, resulting therefrom; and
(e) with respect to any loss of title to all or any portion of any Mortgaged Real Property or Real Property, any title insurance proceeds resulting therefrom less the amount of any expenses (including, without limitation, taxes) incurred in litigating, arbitrating, compromising or settling any claim arising out of such loss of title.
“Net Award” shall mean the proceeds, award or payment received by any Obligor or any of its Subsidiaries in respect of any Taking, together with any interest thereon, less the amount of any reasonable expenses (including, without limitation, any taxes) incurred in litigating, arbitrating, compromising or settling any claim arising out of any such Taking including repayments of any Indebtedness secured by a Prior Lien.
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“Net Cash Payments” shall mean, with respect to any Disposition Event, the aggregate amount of all cash payments (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) received by any Obligor or any of its Subsidiaries directly or indirectly in connection with such Disposition Event; provided, however, that Net Cash Payments shall be net (without duplication) of (a) the amount of all reasonable fees and expenses paid by any Obligor or any of its Subsidiaries in connection with such Disposition Event (the “Relevant Disposition”); (b) any repayments by any Obligor or any of its Subsidiaries of Indebtedness to the extent that (i) such Indebtedness is secured by a Prior Lien on the Property that is the subject of the Relevant Disposition and (ii) the transferee of (or holder of a Lien on) such Property requires that such Indebtedness be repaid as a condition to the purchase of such Property; and (c) amounts required to be paid to any Person (other than any Obligor or any of its Subsidiaries) owning a beneficial interest in the assets subject to such Relevant Disposition.
“Net Proceeds” shall mean the proceeds of any insurance or other payment received by any Obligor or any of its Subsidiaries in connection with any Destruction, less repayment of any Indebtedness secured by a Prior Lien, less the amount of any reasonable expenses (including, without limitation, any taxes) incurred in litigating, arbitrating, compromising or settling any claim arising out of such Destruction and less the amount of any other reasonable expenses incurred as a result of such Destruction.
“New Lenders” shall mean any financial institutions reasonably acceptable to the Administrative Agent who provide any or all of the Increased Facility Amount.
“Non-U.S. Lender” see Section 5.6(b).
“Normal Advance Rate” see the definition of Borrowing Base.
“Notes” shall mean the Revolving Credit Notes and the Swing Loan Note.
“Notice of Assignment” shall mean a notice of assignment pursuant to Section 12.6 substantially in the form of Exhibit E.
“Obligations” shall mean all amounts, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing to any Creditor pursuant to the terms of any Credit Document or secured by any of the Security Documents.
“Obligors” shall mean Borrower and the Guarantors.
“Officer’s Certificate” shall mean, as applied to any corporation, a certificate executed on behalf of such corporation by its Chief Executive Officer, or one of its Vice Presidents or its Chief Financial Officer in his or her official (and not individual) capacity and without personal liability and which certificate, if given with respect to the compliance with a condition precedent to the making of any Loan or the taking of any other action hereunder, shall include (a) a statement that the officer making or giving such Officer’s Certificate has read such condition and any definitions or other provisions contained in this Agreement relating thereto, and (b) a statement as to whether, in the opinion of the signer (in his or her official, but not individual, capacity), such condition has been complied with.
“Other Taxes” see Section 5.6(c).
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“Overadvance Period” shall mean the period commencing on the Closing Date and ending on the earlier of (i) November 30, 2002, or (ii) the date selected by the Borrower in accordance with the provisions of Section 2.5(c) hereof.
“Participant” see Section 12.6(c).
“Payor” see Section 4.6.
“PBGC” shall mean the United States Pension Benefit Guaranty Corporation or any successor thereto.
“Permitted Holders” shall mean Madison Dearborn and any of its Affiliates controlled by Madison Dearborn.
“Permitted Investments” shall mean, for any Person: (a) direct obligations of the United States of America, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States of America, or by any agency thereof, in either case maturing not more than one year from the date of acquisition thereof by such Person; (b) time deposits, certificates of deposit, bankers’ acceptances (including eurodollar deposits) issued by any bank or trust company organized or licensed under the laws of the United States of America or any state thereof and having capital, surplus and undivided profits of at least $500.0 million and a deposit rating of investment grade; (c) commercial paper rated A-1 or better by Standard & Poor’s Corporation or P-1 or better by Xxxxx’x Investors Service, Inc., respectively, maturing not more than 270 days from the date of acquisition thereof by such Person; and (d) money market mutual funds that invest primarily in the foregoing items.
“Permitted Liens” see Section 9.7.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof).
“Plan” shall mean at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or with respect to which Borrower or a Subsidiary could incur liability.
“Pledged Collateral” shall have the meaning set forth in the Security Agreement.
“Preferred Stock” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person’s preferred or preference stock whether now outstanding or issued after the Closing Date, and including, without limitation, all classes and series of preferred or preference stock of such Person.
“Prime Rate” shall mean for any day, a rate per annum that is equal to the corporate base rate of interest announced by Administrative Agent from time to time, changing when and as said corporate base rate changes. The corporate base rate is not necessarily the lowest rate charged by the Administrative Agent to its customers.
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“Principal Office” shall mean the office of the Administrative Agent, located on the Closing Date at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
“Prior Liens” shall mean Liens which, pursuant to the provisions of any Security Document, are or may be superior to the Lien of such Security Document.
“Proceeding” shall mean any claim, counterclaim, action, judgment, suit, hearing, governmental investigation, arbitration or proceeding, including by or before any Governmental Authority and whether judicial or administrative.
“Property” shall mean any right or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including Equity Interests or other ownership interests of any Person.
“Qualified Capital Stock” shall mean with respect to any Person any Equity Interest of such Person that is not Disqualified Capital Stock.
“Quarterly Dates” shall mean the last Business Day of March, June, September and December in each year, commencing with the last Business Day of September 2002.
“Real Property” shall mean all right, title and interest of Borrower or any Subsidiary (including, without limitation, any leasehold estate) in and to a parcel of real property owned or operated by Borrower or any Subsidiary together with, in each case, all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof.
“Redeemable Capital Stock” means any class or series of Equity Interests of a Person that, either by its terms, by the terms of any security into which it is convertible or exchangeable or by contract or otherwise, is, or upon the happening of an event or passage of time, would be, required to be redeemed prior to the final stated maturity date of the notes issued under the Indenture or is redeemable at the option of the holder thereof at any time prior to the final stated maturity date of the notes issued under the Indenture, or is convertible into or exchangeable for debt securities at any time prior to the final stated maturity date of the notes issued under the Indenture.
“Refinancing” see Section 9.8(l).
“Register” see Section 2.9(d).
“Regulation D” shall mean Regulation D (12 C.F.R. Part 204) of the Board of Governors of the United States Federal Reserve System.
“Regulatory Change” shall mean, with respect to any Revolving Credit Lender, any change after the Closing Date in any law or regulations (including Regulation D) of any Governmental Authority or the adoption or making after such date of any interpretation, directive or request applying to a class of banks or other financial institutions including such Revolving Credit Lender of or under any law or regulations of any Governmental Authority (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or governmental or monetary authority or any other regulatory agency with proper authority, including nongovernmental agencies or bodies, charged with the interpretation or administration thereof or by the NAIC.
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“Reimbursement Obligations” shall mean, at any time, the obligations of Borrower then outstanding, or that may thereafter arise in respect of all Letters of Credit then outstanding, to reimburse amounts paid by the Issuing Lender in respect of any drawings under a Letter of Credit.
“Related Document” shall mean any agreement, document or instrument entered into by any Obligor in connection with any document, as any such agreement, document or instrument is amended and in effect from time to time in accordance with its terms and this Agreement.
“Related Parties” see Section 11.1.
“Release” shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous Material into the environment.
“Relevant Parties” and “Relevant Party” see Section 10(b).
“Replaced Lender” see Section 2.12.
“Replacement Lender” see Section 2.12.
“Required Payment” see Section 4.6.
“Requirement of Law” shall mean as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
“Reserve Requirement” shall mean, for any Interest Period for any LIBOR Loan, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the United States Federal Reserve System in New York City with deposits exceeding one billion Dollars against “Eurocurrency liabilities” (as such term is used in Regulation D). LIBOR Loans shall be deemed to constitute Eurocurrency liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exceptions or offsets which may be available from time to time to any Revolving Credit Lender under Regulation D.
“Reset Date” see the definition of “Applicable Margin.”
“Responsible Officer” shall mean the chief executive officer of Borrower and the president of Borrower (if not the chief executive officer) and, with respect to financial matters, the chief financial officer of Borrower.
“Restricted Subsidiary” shall mean, at any time, any direct or indirect Subsidiary of the Borrower that is not then an Unrestricted Subsidiary; provided, however, that upon the occurrence of any Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.”
“Revolving Credit Commitment” shall mean, for each Revolving Credit Lender, the obligation of such Revolving Credit Lender to make Revolving Credit Loans in an
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aggregate principal amount at any one time outstanding up to but not exceeding the amount set opposite the name of such Revolving Credit Lender on Annex A under the caption “Revolving Credit Commitment” (as the same may be reduced from time to time pursuant to Section 2.5 or changed pursuant to Section 12.6(b)). The aggregate principal amount of the Revolving Credit Commitments at the Closing Date is $135.0 million.
“Revolving Credit Commitment Percentage” shall mean, with respect to any Revolving Credit Lender, the ratio of (a) the amount of the Revolving Credit Commitment of such Revolving Credit Lender to (b) the aggregate amount of the Revolving Credit Commitments of all of the Revolving Credit Lenders.
“Revolving Credit Commitment Termination Date” shall mean the Initial Revolving Credit Commitment Termination Date or, if extended in accordance with Section 2.4, the Extended Revolving Credit Commitment Termination Date.
“Revolving Credit Commitments” shall mean the aggregate sum of the Revolving Credit Commitment of all of the Revolving Credit Lenders, including the Increased Facility Amount, if any.
“Revolving Credit Lenders” shall mean (a) on the Closing Date, the Revolving Credit Lenders having Revolving Credit Commitments on the signature pages hereof and (b) thereafter, the Revolving Credit Lenders from time to time holding Revolving Credit Loans and Revolving Credit Commitments after giving effect to any assignments thereof permitted by Section 12.6(b).
“Revolving Credit Loans” see Section 2.1(a).
“Revolving Credit Notes” shall mean the promissory notes provided for by Section 2.9(a) and all promissory notes delivered in substitution or exchange therefor, in each case as the same shall be modified and supplemented and in effect from time to time.
“Section 5.6 Certificate” see Section 5.6(b).
“Security Agreement” shall mean a Security Agreement substantially in the form of Exhibit D among the Obligors and the Administrative Agent, as the same may be amended, modified or supplemented in accordance with the terms thereof and hereof.
“Security Documents” shall mean the Security Agreement, the Mortgage, and all Uniform Commercial Code financing statements required by this Agreement, the Security Agreement or any Mortgage to be filed with respect to the security interests in Property and fixtures created pursuant to the Security Agreement or any Mortgage and any other document or instrument utilized to pledge as Collateral for the Obligations any property or assets of whatever kind or nature.
“Senior Subordinated Financing” shall mean the issuance by Borrower of Senior Subordinated Notes pursuant to the Senior Subordinated Note Documents for gross cash proceeds of $100 million.
“Senior Subordinated Notes” shall mean the unsecured senior subordinated notes issued pursuant to the Senior Subordinated Financing, including the senior subordinated notes issued pursuant to a registered exchange offer therefor made pursuant to the
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registration rights agreement entered into in connection with the issuance thereof on December 29, 1997.
“Senior Subordinated Note Documents” shall mean the Indenture pursuant to which the Senior Subordinated Notes were issued and all documents relating thereto, as any such agreement or document may be amended and in effect from time to time in accordance with its terms and this Agreement.
“Solvent” and “Solvency” shall mean, for any Person on a particular date, that on such date (a) the fair value of the Property of such Person on a going concern basis is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the Property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts and liabilities beyond such Person’s ability to pay as such debts and liabilities mature, (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s Property would constitute an unreasonably small capital and (e) such Person is able to pay its debts as they become due and payable.
“State and Local Real Property Disclosure Requirements” shall mean any state or local laws requiring notification of the buyer of real property, or notification, registration, or filing to or with any state or local agency, prior to the sale of any real property or transfer of control of an establishment, of the actual or threatened presence or release into the environment, or the use, disposal, or handling of Hazardous Materials on, at, under, or near the real property to be sold or the establishment for which control is to be transferred.
“Subordinated Debt” shall mean Indebtedness of Borrower which is subordinated to the Obligations in right and time of payment on terms and conditions and pursuant to documentation satisfactory to the Administrative Agent (which shall include the Senior Subordinated Notes); provided, however, that no Indebtedness will be deemed to be subordinate for purposes of this Agreement merely by virtue of lack of a security interest in any collateral.
“Subordination Provisions” see Section 10(m).
“Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. Unless the context clearly requires otherwise, all references to any Subsidiary shall mean a Subsidiary of Borrower.
“Surety Instruments” shall mean all letters of credit (including standby and commercial), bankers’ acceptances, bank guarantees, surety bonds and similar instruments.
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“Survey” shall mean a survey of any Mortgaged Real Property (and all improvements thereon): (i) prepared by a surveyor or engineer licensed to perform surveys in the state, province or country where such Mortgaged Real Property is located, (ii) dated (or redated) not earlier than six months prior to the date of delivery thereof unless there shall have occurred within the six months prior to such date of delivery any exterior construction on the site of such Mortgaged Real Property, in which event such survey shall be dated (or redated) after the completion of such construction or, if such construction shall not have been completed as of such date of delivery, not earlier than 20 days prior to such date of delivery, (iii) certified by the surveyor (in a manner reasonably acceptable to the Administrative Agent) to the Administrative Agent and the Title Company and (iv) complying in all respects with the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation of such survey.
“Swap Contract” means any agreement (including any master agreement and any agreement, whether or not in writing, relating to any single transaction) that is an interest rate swap agreement, basis swap, forward rate agreement, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange agreement, rate cap, collar or floor agreement, currency swap agreement, cross-currency rate swap agreement, swap option, currency option or any other similar agreement (including any option to enter into any of the foregoing).
“Swing Loan Commitment” shall mean the obligation of Fleet National Bank to make or continue Swing Loans hereunder in an aggregate principal amount up to but not exceeding $10,000,000, as the same may be reduced or terminated pursuant to Section 2.5 or Section 10, it being understood that the Swing Loan Commitment is part of the Revolving Credit Commitment of the Swing Loan Lender, rather than a separate, independent commitment.
“Swing Loan Lender” shall mean Fleet National Bank, and its successors and assigns in such capacity.
“Swing Loan Maturity Date” shall mean the Revolving Credit Commitment Termination Date.
“Swing Loan Note” shall mean the promissory note made by Borrower evidencing the Swing Loans, in the form of Exhibit A-2.
“Swing Loans” see Section 2.1(b).
“Syndication Agent” see the introduction to this Agreement.
“Taking” shall mean any taking of any Mortgaged Real Property or Real Property of any Obligor or any of its Subsidiaries or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition of the use or occupancy of any Mortgaged Real Property or Real Property of any Obligor or any of its Subsidiaries or any part thereof, by any Governmental Authority, civil or military. Taking shall not include any Casualty Event.
“Tax Benefit” see Section 5.6(a).
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“Title Company” shall mean Chicago Title Insurance Company or such other title insurance or abstract company as shall be mutually agreeable to Borrower and the Administrative Agent.
“Total Debt” shall mean at any date, the aggregate amount of Indebtedness (including Revolving Credit Loans, Swing Loans and Letter of Credit Liabilities) of Borrower and the Consolidated Subsidiaries as of such date (other than Indebtedness described in clauses (b), (g), and (j) of the definition of Indebtedness), determined on a consolidated basis in accordance with GAAP.
“Transaction Documents” shall mean any operative document relating to the Transactions, including but not limited to the Credit Documents and each of the Related Documents with respect thereto, in each case, including all schedules, exhibits, appendices, annexes and attachments and amendments thereto and, in each case, as amended and in effect from time to time in accordance with their respective terms and this Agreement.
“Transactions” shall mean the borrowings hereunder and the other transactions contemplated hereby to occur on the Closing Date.
“Type” see Section 1.3.
“UCC” shall mean the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts.
“Unfunded Liabilities” shall mean, with respect to any Plan at any time, the amount (if any) by which (a) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market value of all Plan assets allocable to such liabilities under Title I of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan.
“Unrestricted Subsidiary” means (a) any Subsidiary that at the time of determination shall be an Unrestricted Subsidiary (as designated by the Board of Directors of the Borrower, as provided below), and (b) any Subsidiary of an Unrestricted Subsidiary; provided, however, that in no event shall any Guarantor be an Unrestricted Subsidiary. The Board of Directors of the Borrower may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary so long as (i) neither the Borrower nor any Restricted Subsidiary is directly or indirectly liable for any Indebtedness of such Subsidiary, (ii) no default with respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of any other Indebtedness of the Borrower or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity, (iii) any Investment in such Subsidiary made as a result of designating such Subsidiary an Unrestricted Subsidiary will not violate the provisions of this Agreement, (iv) neither the Borrower nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than those that might be obtained at the time from Persons who are not Affiliates of the Borrower, and (v) neither the Borrower nor any Restricted Subsidiary has any obligation (1) to subscribe for additional shares of Capital Stock or other equity interest in such Subsidiary, or (2) to maintain or preserve such Subsidiary’s financial condition or to cause such Subsidiary to
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achieve certain levels of operating results. Any such designation by the Board of Directors of the Borrower shall be evidenced to the Administrative Agent by filing a board resolution with the Administrative Agent giving effect to such designation. The Board of Directors of the Borrower may designate any Unrestricted Subsidiary as a Restricted Subsidiary if immediately after giving effect to such designation, there would be no Default or Event of Default under this Agreement and the Borrower could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 1008 of the Senior Subordinated Note Documents.
“Unutilized Revolving Credit Commitment” shall mean, for any Revolving Credit Lender, at any time, the excess of such Revolving Credit Lender’s Revolving Credit Commitment at such time over the sum of (a) the aggregate outstanding principal amount of Revolving Credit Loans made by such Revolving Credit Lender, (b) such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the aggregate amount of Letter of Credit Liabilities at such time, and (c) with respect to the Swing Loan Lender only, the aggregate principal amount of Swing Loans then outstanding.
“Wholly Owned Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which all of the equity securities or other ownership interests (other than, in the case of a corporation, directors’ qualifying shares or shares required to be held by foreign nationals) are directly or indirectly owned or controlled by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person. Unless the context clearly requires otherwise, all references to any Wholly Owned Subsidiary shall mean a Wholly Owned Subsidiary of Borrower.
1.2 Accounting Terms and Determinations. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters shall be made in accordance with GAAP, and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP as in effect on the Closing Date. All financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP. All financial covenants are to be calculated in accordance with GAAP as in effect on the Closing Date unless such modifications are agreed to by the parties hereto.
1.3 Types of Loans. Loans hereunder are distinguished by “Type”. The “Type” of a Loan refers to whether such Loan is an Alternate Base Rate Loan or a LIBOR Loan, each of which constitutes a Type.
(a) In this Agreement and each other Credit Document, unless the context clearly requires otherwise (or such other Credit Document clearly provides otherwise), references to (i) the plural include the singular, the singular the plural and the part the whole; (ii) Persons include their respective permitted successors and assigns or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; (iii) agreements (including this Agreement), promissory notes and other contractual instruments include subsequent amendments, assignments, and other modifications thereto, but only to the extent such amendments, assignments or other modifications thereto are not prohibited by their terms or the terms of any Credit Document; (iv) statutes and related regulations include any amendments of same and any successor statutes and regulations; and (v) time shall be a reference to Boston, Massachusetts time. Where any provision herein refers to action to be taken by any
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Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
(b) In this Agreement and each other Credit Document, unless the context clearly requires otherwise (or such other Credit Document clearly provides otherwise), (i) “amend” shall mean “amend, amend and restate, supplement or modify”; and “amended” and “amendment” shall have meanings correlative to the foregoing; (a) in the computation of periods of time from a specified date to a later specified date, “from” shall mean “from and including”; “to” and “until” shall mean “to but excluding”; and “through” shall mean “to and including”; (ii) “hereof,” “herein” and “hereunder” (and similar terms) in this Agreement or any other Credit Document refer to this Agreement or such other Credit Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Credit Document; (iii) “including” (and similar terms) shall mean “including without limitation” (and similarly for similar terms); (iv) “or” has the inclusive meaning represented by the phrase “and/or”; (b) “satisfactory to” any Creditor shall mean in form, scope and substance and on terms and conditions satisfactory to such Creditor; and (v) references to “the date hereof” shall mean the Closing Date.
(c) In this Agreement unless the context clearly requires otherwise, any reference to (i) an Annex, Exhibit or Schedule is to an Annex, Exhibit or Schedule, as the case may be, attached to this Agreement and constituting a part hereof, and (ii) a Section or other subdivision is to a Section or such other subdivision of this Agreement.
(d) No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting thereof shall apply to any Credit Document.
Section 2. Commitments, Loans, Notes, Prepayments, Replacement of Revolving Credit Lenders and Annual Cleandown.
(a) Revolving Credit Loans.
(i) Each Revolving Credit Lender severally agrees, on the terms and conditions of this Agreement, to make revolving credit loans (the “Revolving Credit Loans”) to Borrower in Dollars during the period from and including the Closing Date to but not including the Revolving Credit Commitment Termination Date in an aggregate principal amount at any one time outstanding not exceeding the amount of the Revolving Credit Commitment of such Revolving Credit Lender as in effect from time to time; provided, however, that in no event shall the sum of the aggregate principal amount of (without duplication) all Revolving Credit Loans then outstanding, plus the aggregate principal amount of Swing Loans then outstanding, plus the aggregate amount of all Letter of Credit Liabilities at any time exceed the lesser of (i) the aggregate amount of the Revolving Credit Commitments as in effect at such time and (ii) the Borrowing Base as in effect at such time. Subject to the terms and conditions of this Agreement, during such period Borrower may borrow, repay and reborrow the amount of the Revolving Credit Commitments by means of Alternate Base Rate Loans and LIBOR Loans and may Convert Revolving Credit Loans of one Type into Revolving Credit Loans of another Type (as provided in Section 2.10) or
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Continue Revolving Credit Loans of one Type as Revolving Credit Loans of the same Type (as provided in Section 2.10).
(ii) Borrower may at any time request that the Revolving Credit Lenders provide all or a portion of the Increased Facility Amount, provided that (A) at the time of making the request, and after giving effect to the requested increase, the Borrower is in compliance with the financial covenants set forth in Section 9.11 of this Agreement and (B) no Default or Event of Default has occurred and is continuing, and (C) the offer to provide the Increased Facility Amount shall be made first to all Revolving Credit Lenders on a pro rata basis. No Revolving Credit Lender shall have any obligation to make available any such increase in the Revolving Credit Commitments. To the extent existing Revolving Credit Lenders decline to make available all of the Increased Facility Amount, Borrower may approach New Lenders to provide such increase provided that the conditions to obtaining the Increased Facility Amount set forth in this Section 2.1(a)(ii) have been satisfied; provided, however, that any such New Lenders shall be acceptable to the Administrative Agent and, upon the making of a Revolving Credit Commitment pursuant to the Increased Facility Amount, shall be treated as Revolving Credit Lenders for all purposes of this Agreement. If and to the extent agreed to be extended by any Revolving Credit Lender or New Lender, the Increased Facility Amount shall become available under, and part of, the Revolving Credit Commitments.
(iii) Limit on LIBOR Loans. No more than ten (10) separate Interest Periods in respect of LIBOR Loans may be outstanding at any one time. No LIBOR Loans shall be made on the Closing Date.
(b) Swing Loans. Subject to the terms and conditions of this Agreement, upon request of Borrower, the Swing Loan Lender agrees to make one or more swing loans to Borrower from time to time from and including the Closing Date, to but excluding the Swing Loan Maturity Date, up to but not exceeding the amount of the Swing Loan Lender’s Swing Loan Commitment as then in effect. (Such swing loans referred to in this Section 2.1(b) now or hereafter made by the Swing Loan Lender to Borrower from and including and after the Closing Date are hereinafter collectively called the “Swing Loans”.) Prior to the Swing Loan Maturity Date, Borrower may borrow, repay and reborrow Swing Loans up to the Swing Loan Commitment in accordance with the terms of this Agreement, provided that no Swing Loan shall remain outstanding for more than ten days. The Swing Loan Lender shall not make any Swing Loans on or after the Swing Loan Maturity Date. Notwithstanding anything to the contrary contained in this Section 2.1(b) or elsewhere in this Agreement, the Swing Loan Lender shall not, pursuant to this Section 2.1(b) or otherwise, make any Swing Loan to or for the account of Borrower, and Borrower shall not be entitled to borrow, pursuant to this Section 2.1(b), if, after giving full effect to the requested Swing Loan, the aggregate outstanding amount of Revolving Credit Loans, plus the aggregate outstanding amount of Swing Loans, plus the aggregate outstanding Letter of Credit Liabilities would exceed the lesser of (i) the aggregate amount of the Revolving Credit Commitments as in effect at such time and (ii) the Borrowing Base as in effect at such time. Notwithstanding anything herein or elsewhere to the contrary, the Swing Loans will be made and maintained only as Alternate Base Rate Loans. The Swing Loan Lender shall not make any Swing Loan after receiving a written notice from Borrower or the Majority Revolving Credit Lenders stating that a Default or an Event of Default exists and is continuing until such time as the Swing Loan Lender shall have received written notice of (i) rescission of all such notices from the party or parties originally delivering such
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notice, (ii) the waiver of such Default or Event of Default by the Majority Revolving Credit Lenders, or (iii) the Administrative Agent’s good faith determination that such Default or Event of Default has ceased to exist. Swing Loans shall be made and repaid in minimum amounts of $50,000 and integral multiples of $10,000 above such amount.
Upon the occurrence of a Default, each Revolving Credit Lender shall be deemed to have purchased (and each Revolving Credit Lender hereby irrevocably agrees to purchase on a pro rata basis (based upon each Revolving Credit Lender’s Revolving Credit Commitment)) an irrevocable risk participation in all outstanding Swing Loans, together with all accrued interest thereon, without any further action by or on behalf of the Swing Loan Lender, any other Revolving Credit Lender, Borrower or any other Person. Upon one Business Day’s notice from the Swing Loan Lender, each other Revolving Credit Lender shall deliver to the Swing Loan Lender an amount equal to its respective participation in such Swing Loan (as determined pursuant to the immediately preceding sentence) in cash. If any Revolving Credit Lender fails to make available to the Swing Loan Lender the amount of such Revolving Credit Lender’s participation as provided in this paragraph, the Swing Loan Lender shall be entitled to recover such amount on demand from such Revolving Credit Lender, together with interest thereon at the Federal Funds Rate until such amount is paid in full in cash. In the event the Swing Loan Lender receives a payment from Borrower or any other Obligor of any amount in which the Revolving Credit Lenders have purchased participations as provided in this paragraph, the Swing Loan Lender shall distribute (after first applying any such payment to any fees, costs and expenses of the Swing Loan Lender) to each Revolving Credit Lender its pro rata share of such payment. Anything contained in this Agreement or otherwise to the contrary notwithstanding, (A) each Revolving Credit Lender’s obligation to purchase a participation in each unpaid Swing Loan shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, (1) any setoff, counterclaim, recoupment, defense or other right which such Revolving Credit Lender may now or hereafter have against the Swing Loan Lender, Borrower or any other Person for any reason whatsoever, (2) the occurrence or continuation of a Default or an Event of Default, (3) any Material Adverse Change in the condition of Borrower or any Subsidiary, (4) any breach or default of this Agreement or any of the Security Documents by any Person other than by the Swing Loan Lender, or (5) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing, and (B) the Swing Loan Lender shall not have any obligation to make any Swing Loans if, at the time of Borrower’s request for the Swing Loan, (1) Borrower fails for whatever reason to satisfy any of the conditions precedent set forth in Section 7.2 or (2) any Revolving Credit Lender fails for whatever reason to comply with its obligations under this Section 2.1(b).
2.2 Borrowings. Borrower shall give the Administrative Agent notice of each borrowing hereunder as provided in Section 4.5. The form of such notice of borrowing shall be substantially in the form of Exhibit H. Not later than 12:00 noon Boston, Massachusetts time on the date specified for each borrowing hereunder, each Revolving Credit Lender shall make available the amount of the Loan or Loans to be made by it on such date to the Administrative Agent, at an account specified by the Administrative Agent maintained at the Principal Office, in immediately available funds, for account of Borrower. Each borrowing of Revolving Credit Loans shall be made by each Revolving Credit Lender pro rata based on such Revolving Credit Lender’s Revolving Credit Commitment Percentage. The amounts so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to Borrower by depositing the same, in immediately available funds, in an account of Borrower maintained with the Administrative Agent at the Principal Office designated by Borrower.
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2.3 Letters of Credit. Subject to the terms and conditions hereof, the Revolving Credit Commitments may be utilized, upon the request of Borrower, in addition to the Revolving Credit Loans provided for by Section 2.1(a), for standby and commercial letters of credit (herein collectively called “Letters of Credit”) issued by the Issuing Lender for the account of Borrower; provided, however, that in no event shall (i) the aggregate amount of all Letter of Credit Liabilities, plus the aggregate principal amount of the Revolving Credit Loans then outstanding, plus the aggregate principal amount of Swing Loans then outstanding exceed at any time the lesser of (x) the Revolving Credit Commitments as in effect at such time and (y) the Borrowing Base as in effect at such time, (ii) the sum of the aggregate principal amount of Revolving Credit Loans then outstanding made by any Revolving Credit Lender, plus such Revolving Credit Lender’s pro rata share (based on the Revolving Credit Commitments) of the aggregate principal amount of Swing Loans then outstanding, plus such Revolving Credit Lender’s pro rata share (based on the Revolving Credit Commitments) of the aggregate amount of all Letter of Credit Liabilities exceed such Revolving Credit Lender’s Revolving Credit Commitment as in effect at such time, (iii) the outstanding aggregate amount of all Letter of Credit Liabilities exceed $25 million, (iv) the face amount of any Letter of Credit be less than $10,000, (v) the expiration date of any Letter of Credit extend beyond the earlier of (x) the fifth Business Day preceding the Revolving Credit Commitment Termination Date (unless cash collateralized (or backstopped by irrevocable letters of credit) beyond such date on terms and conditions and pursuant to documentation satisfactory to the Majority Revolving Credit Lenders) and (y) the date twelve months following the date of such issuance for standby Letters of Credit or 270 days after the date of such issuance for commercial Letters of Credit, unless the Majority Revolving Credit Lenders have approved such expiry date in writing (but never beyond the fifth Business Day prior to the Revolving Credit Commitment Termination Date); provided, however, that any standby Letter of Credit may be automatically extended for periods of up to one year (but never beyond the fifth Business Day preceding the Revolving Credit Commitment Termination Date) so long as such Letter of Credit provides that the Issuing Lender retains an option satisfactory to the Issuing Lender, to terminate such Letter of Credit prior to each extension date, unless all of the Revolving Credit Lenders have approved such expiry date in writing, or (vi) the Issuing Lender issue any Letter of Credit after it has received notice from Borrower or the Majority Revolving Credit Lenders stating that a Default or Event of Default exists until such time as the Issuing Lender shall have received written notice of (x) rescission of such notice from the Majority Revolving Credit Lenders, (y) waiver of such Default or Event of Default in accordance with this Agreement or (z) the Administrative Agent’s good faith determination that such Default or Event of Default has ceased to exist. Without limiting the foregoing, Existing Letters of Credit shall be deemed to be Letters of Credit issued under this Agreement and shall be entitled to all of the benefits hereof.
The following additional provisions shall apply to Letters of Credit:
(a) Borrower shall give the Administrative Agent at least three Business Days’ irrevocable prior notice (effective upon receipt) specifying the date (which shall be no later than thirty days preceding the Revolving Credit Commitment Termination Date) each Letter of Credit is to be issued and describing in reasonable detail the proposed terms of such Letter of Credit (including the beneficiary thereof) (including whether such Letter of Credit is to be a commercial Letter of Credit or a standby Letter of Credit). Upon receipt of any such notice, the Administrative Agent shall advise the Issuing Lender of the contents thereof.
(b) On each day during the period commencing with the issuance by the Issuing Lender of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Revolving Credit Commitment of each Revolving Credit Lender shall be deemed to be utilized for all purposes hereof in an amount equal to such
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Revolving Credit Lender’s Revolving Credit Commitment Percentage of the then undrawn face amount of such Letter of Credit. Each Revolving Credit Lender (other than the Issuing Lender) agrees that, upon the issuance of any Letter of Credit hereunder, it shall automatically acquire a participation in the Issuing Lender’s liability under such Letter of Credit in an amount equal to such Revolving Credit Lender’s Revolving Credit Commitment Percentage of such liability, and each Revolving Credit Lender (other than the Issuing Lender) thereby shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and shall be unconditionally obligated to the Issuing Lender to pay and discharge when due, its Revolving Credit Commitment Percentage of the Issuing Lender’s liability under such Letter of Credit. The Issuing Lender shall be deemed to hold a Letter of Credit Liability in an amount equal to its retained interest in the related Letter of Credit after giving effect to such acquisition by the Revolving Credit Lenders other than the Issuing Lender of their participation interests.
(c) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment under such Letter of Credit, the Issuing Lender shall promptly notify Borrower (through the Administrative Agent) of the amount to be paid by the Issuing Lender as a result of such demand and the date on which payment is to be made by the Issuing Lender to such beneficiary in respect of such demand. Borrower hereby unconditionally agrees to pay and reimburse the Issuing Lender for the amount of each demand for payment under such Letter of Credit not later than the next Business Day after the date on which the Issuing Lender notifies Borrower that payment is to be made by the Issuing Lender to the beneficiary thereunder.
(d) Forthwith upon its receipt of a notice referred to in clause (c) of this Section 2.3, Borrower shall advise the Issuing Lender whether or not Borrower intends to borrow hereunder to finance its obligation to reimburse the Issuing Lender for the amount of the related demand for payment and, if it does, submit a notice of such borrowing as provided in Section 4.5. In the event that Borrower fails to so advise the Administrative Agent not later than one Business Day prior to the date payment from Borrower is due to the Issuing Lender by virtue of a drawing under a Letter of Credit, Borrower shall be deemed to have given notice of borrowing for a Revolving Credit Loan which is an Alternate Base Rate Loan in the exact amount owing to the Issuing Lender and the Administrative Agent shall act accordingly. If Borrower has given such notice indicating that it does not intend to borrow hereunder or if Borrower fails to reimburse the Issuing Lender for a demand for payment under a Letter of Credit by the date of notice of such payment (or the next Business Day if received after 12:00 noon (Boston, Massachusetts time) on such date), the Administrative Agent shall give each Revolving Credit Lender prompt notice of the amount of the demand for payment, specifying such Lender’s Revolving Credit Commitment Percentage of the amount of the related demand for payment.
(e) Each Revolving Credit Lender (other than the Issuing Lender) shall pay to the Administrative Agent for account of the Issuing Lender at the Principal Office in Dollars and in immediately available funds, the amount of such Revolving Credit Lender’s Revolving Credit Commitment Percentage of any payment under a Letter of Credit upon notice by the Issuing Lender (through the Administrative Agent) to such Revolving Credit Lender requesting such payment and specifying such amount. Each such Revolving Credit Lender’s obligation to make such payments to the Administrative Agent for account of the Issuing Lender under this clause (e), and the Issuing Lender’s right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including (i) the failure of any other Revolving Credit Lender to make its payment under this clause (e), (ii) the financial condition of Borrower
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or the existence of any Default or (iii) the termination of the Revolving Credit Commitments. Each such payment to the Issuing Lender shall be made without any offset, abatement, withholding or reduction whatsoever. Nothing in this clause (e) shall be deemed to prejudice the right of any Revolving Credit Lender to recover from the Issuing Lender in the event of a wrongful payment of the kind described in the proviso of the last paragraph of this Section 2.3, with respect to the issuance of a Letter of Credit in breach of any restriction on such issuance under this Section 2.3, or with respect to the gross negligence or willful misconduct of the Issuing Lender in respect of any Letter of Credit.
(f) Upon the making of each payment by a Revolving Credit Lender to the Issuing Lender pursuant to clause (e) above in respect of any Letter of Credit, such Revolving Credit Lender shall, automatically and without any further action on the part of the Administrative Agent, the Issuing Lender or such Revolving Credit Lender, acquire (i) a participation in an amount equal to such payment in the Reimbursement Obligation owing to the Issuing Lender by Borrower hereunder and under the Letter of Credit Documents relating to such Letter of Credit and (ii) a participation in a percentage equal to such Revolving Credit Lender’s Revolving Credit Commitment Percentage in any interest or other amounts payable by Borrower hereunder and under such Letter of Credit Documents in respect of such Reimbursement Obligation. Upon receipt by the Issuing Lender from or for the account of Borrower of any payment in respect of any Reimbursement Obligation or any such interest or other amounts (including by way of setoff or application of proceeds of any collateral security) the Issuing Lender shall promptly pay to the Administrative Agent for account of each Revolving Credit Lender entitled thereto, such Revolving Credit Lender’s Revolving Credit Commitment Percentage of such payment, each such payment by the Issuing Lender to be made in the same money and funds in which received by the Issuing Lender. In the event any payment received by the Issuing Lender and so paid to the Revolving Credit Lenders hereunder is rescinded or must otherwise be returned by the Issuing Lender, each Revolving Credit Lender shall, upon the request of the Issuing Lender (through the Administrative Agent), repay to the Issuing Lender (through the Administrative Agent) the amount of such payment paid to such Revolving Credit Lender, with interest at the rate specified in clause (i) of this Section 2.3.
(g) Borrower shall pay to the Administrative Agent for the account of the Revolving Credit Lenders in respect of each Letter of Credit a letter of credit commission in an amount equal to (x) in the case of commercial Letters of Credit, the rate per annum equal to two-thirds of the Applicable Margin for LIBOR Loans in effect at the time of issuance thereof or (y) in the case of standby Letters of Credit, the rate per annum equal to the Applicable Margin for LIBOR Loans in effect from time to time, multiplied by (z) the daily average undrawn face amount of each such Letter of Credit for the period from and including the date of issuance of such Letter of Credit (i) in the case of a Letter of Credit which expires in accordance with its terms, to and including such expiration date and (ii) in the case of a Letter of Credit which is drawn in full or is otherwise terminated other than on the stated expiration date of such Letter of Credit, to but excluding the date such Letter of Credit is drawn in full or is terminated, such fee to be non-refundable and to be paid in arrears quarterly, on each Quarterly Date and on the earlier of the Revolving Credit Commitment Termination Date or the date of the termination of the Revolving Credit Commitments or the date of such termination, expiration or the Business Day subsequent to notice of a drawing. In addition, Borrower shall pay to the Administrative Agent for account of the Issuing Lender only in respect of each Letter of Credit a fronting fee in an amount to be agreed upon by the Borrower and the Issuing Lender, such fronting fee to be payable on the date of issuance of such Letter of Credit, plus all
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charges, costs and expenses in the amounts customarily charged by the Issuing Lender from time to time in like circumstances with respect to the issuance of each Letter of Credit and drawings and other transactions relating thereto.
(h) Promptly following the end of each calendar month, the Issuing Lender shall deliver (through the Administrative Agent) to each Revolving Credit Lender and Borrower a notice describing the aggregate amount of all Letters of Credit outstanding at the end of such month. Upon the request of any Revolving Credit Lender from time to time, the Issuing Lender shall deliver any other information reasonably requested by such Revolving Credit Lender with respect to each Letter of Credit then outstanding.
(i) To the extent that any Revolving Credit Lender fails to pay an amount required to be paid pursuant to clause (e) or (f) of this Section 2.3 on the due date therefor, such Revolving Credit Lender shall pay interest to the Issuing Lender (through the Administrative Agent) on such amount from and including such due date to but excluding the date such payment is made (i) during the period from and including such due date to but excluding the date three Business Days thereafter, at a rate per annum equal to the Federal Funds Rate (as in effect from time to time) and (ii) thereafter, at a rate per annum equal to the post-default rate (as in effect from time to time) pursuant to Section 3.2(b).
(j) The issuance by the Issuing Lender of any modification or supplement to any Letter of Credit hereunder that would extend the expiry date or increase the face amount thereof shall be subject to the same conditions applicable under this Section 2.3 to the issuance of new Letters of Credit, and no such modification or supplement shall be issued hereunder unless either (i) the respective Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such modified or supplemented form or (ii) each Revolving Credit Lender shall have consented thereto.
(k) Notwithstanding the foregoing, the Issuing Lender shall not be under any obligation to issue any Letter of Credit if at the time of such issuance, any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain the Issuing Lender from issuing such Letter of Credit or any requirement of law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Lender with respect to such Letter of Credit any restriction or reserve or capital requirement (for which the Issuing Lender is not otherwise compensated) not in effect on the Closing Date.
The obligations of Borrower under this Agreement and any Letter of Credit Document to reimburse the Issuing Lender for a drawing under a Letter of Credit, and to repay any drawing under a Letter of Credit converted into Revolving Credit Loans, shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and each such other Letter of Credit Document under all circumstances, including the following: (i) any lack of validity or enforceability of this Agreement or any Letter of Credit Document; (ii) the existence of any claim, setoff, defense or other right that Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the Letter of Credit Documents or any unrelated transaction; (iii) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or
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insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit; or any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; or (iv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower or a Guarantor; provided, however, that Borrower shall not be obligated to reimburse the Issuing Lender for any wrongful payment determined by a court of competent jurisdiction to have been made by the Issuing Lender as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Lender or which is not in accordance with the standard of care specified in the Uniform Commercial Code of the Commonwealth of Massachusetts. To the extent that any provision of any Letter of Credit Document is inconsistent with the provisions of this Section 2.3, the provisions of this Section 2.3 shall control.
2.4 Extension of Revolving Credit Commitment Termination Date.
(a) At Borrower’s option, subject to satisfaction of the following terms and conditions, Borrower shall have the option to extend the Revolving Credit Commitment Termination Date from the Initial Revolving Credit Commitment Termination Date to the Extended Revolving Credit Commitment Termination Date:
(i) Borrower shall have notified the Administrative Agent in writing no later than thirty (30) days after the first anniversary of the Closing Date of the Borrower’s election to request the extension;
(ii) On the date of the notification as provided in clause (i) above and on the Initial Revolving Credit Commitment Termination Date, no Default or Event of Default is then occurring and no Event of Default has occurred; and
(iii) One hundred percent (100.0%) of the Revolving Credit Lenders consent in writing to the requested extension within sixty (60) Business Days after the date of the Administrative Agent’s receipt of the Borrower’s notification pursuant to clause (i), above. The failure of any Revolving Credit Lender to furnish such written consent within such time period shall be deemed a denial of the Borrower’s extension request.
(b) No extension shall be effective unless and until the Administrative Agent has confirmed, in writing, the Borrower’s compliance with the conditions precedent to the extension of the Initial Revolving Credit Commitment Termination Date set forth in Section 2.4(a). To the extent that one hundred percent (100.0%) of the Revolving Credit Lenders do not consent to the extension request, Borrower shall have the option of: (i) reducing the aggregate principal amount of the Revolving Credit Commitments at the Initial Revolving Credit Commitment Termination Date by an amount equal to the aggregate principal amount of the Revolving Credit Commitments of the non-consenting Revolving Credit Lenders; provided, however, that in no event shall the aggregate principal amount of the reduction in the Revolving Credit Commitments be more than $25 million (in which case, if all other conditions are met, the extension shall be effective as to the reduced amount); (ii) replacing the non-consenting Revolving Credit Lenders in accordance with the terms of Section 2.12 (in which case, if all other conditions are met, the extension shall be effective upon such replacement); or (iii) withdrawing such extension request; provided, however, that after any such withdrawal Borrower may
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again request an extension under the terms of this Section 2.4 within the time period specified in subsection (a).
(c) In the event that the Borrower elects to reduce the aggregate principal amount of the Revolving Credit Commitments pursuant to clause (i) of Section 2.4(b) above, the Borrower, in connection therewith, shall pay in cash to (i) each nonconsenting Revolving Credit Lender an amount equal to the sum of (A) the principal of, and all accrued interest on, all outstanding Loans of the non-consenting Revolving Credit Lender, (B) all Reimbursement Obligations owing to such non-consenting Revolving Credit Lender, together with all then unpaid interest with respect thereto at such time, and (C) all accrued, but theretofore unpaid, fees owing to the non-consenting Revolving Credit Lender pursuant to Section 2.6, and (ii) the Issuing Lender an amount equal to such non-consenting Revolving Credit Lender’s Revolving Credit Commitment Percentage of any Reimbursement Obligations (which at such time remains a Reimbursement Obligation) to the extent such amount was not theretofore funded by such non-consenting Revolving Credit Lender. Upon such payment, the Revolving Credit Commitment Percentages of the consenting Revolving Credit Lenders shall be adjusted accordingly to reflect the termination of the Revolving Credit Commitments of the non-consenting Revolving Credit Lenders.
2.5 Termination and Reductions of Commitments and Overadvance Period.
(a) The aggregate amount of the Revolving Credit Commitments shall be automatically and permanently reduced to zero on the Revolving Credit Commitment Termination Date.
(b) Borrower shall have the right, at any time or from time to time (i) so long as no Revolving Credit Loans or Letter of Credit Liabilities will be outstanding as of the date specified for termination, to terminate the Revolving Credit Commitments, and (ii) to reduce the aggregate amount of the then Unutilized Revolving Credit Commitments of all the Revolving Credit Lenders; provided, however, that (x) Borrower shall give notice of each such termination or reduction as provided in Section 4.5, and (y) each partial reduction shall be in an aggregate amount at least equal to $1.0 million (or in integral multiples of $500,000 in excess thereof).
(c) Borrower shall have the right, at any time, to terminate the Overadvance Period, provided, however, that (x) Borrower shall give notice of such termination as provided in Section 4.5, and (y) Excess Availability on a pro forma basis from the date of the Administrative Agent’s receipt of the notice described in clause (i) hereof through November 30, 2002 shall, at all times, be at least $15,000,000.
(d) The Revolving Credit Commitments and/or Overadvance Period, as applicable, once terminated may not be reinstated and any amount of the Revolving Credit Commitments that has been reduced may not be reinstated.
(a) Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender a commitment fee on the daily average amount of such Revolving Credit Lender’s Unutilized Revolving Credit Commitment, for the period from and including the Closing Date to but not including the earlier of the date such Revolving Credit Commitment is terminated or the Revolving Credit Commitment Termination Date, at a rate per annum equal to the Applicable Revolving Credit Fee Percentage. Any
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accrued commitment fee under this Section 2.6(a) shall be payable in arrears on each Quarterly Date and on the earlier of the date the Revolving Credit Commitments are terminated or the Revolving Credit Commitment Termination Date.
(b) Borrower shall pay to the Administrative Agent for its account and the account of the Lead Arranger certain other fees pursuant to the terms of the Fee Letter.
2.7 Lending Offices. The Loans of each Type made by each Revolving Credit Lender shall be made and maintained at such Revolving Credit Lender’s Applicable Lending Office for Loans of such Type.
2.8 Several Obligations of Revolving Credit Lenders. The failure of any Revolving Credit Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Revolving Credit Lender of its obligation to make its Loan on such date, but neither any Revolving Credit Lender nor the Administrative Agent shall be responsible for the failure of any other Revolving Credit Lender to make a Loan to be made by such other Revolving Credit Lender, and (except as otherwise provided in Section 4.6) no Revolving Credit Lender shall have any obligation to the Administrative Agent or any other Revolving Credit Lender for the failure by such Revolving Credit Lender to make any Loan required to be made by such Revolving Credit Lender.
(a) The Revolving Credit Loans made or to be made by each Revolving Credit Lender shall be evidenced by one or more promissory notes of Borrower, substantially in the form of Exhibit A-1, dated the Closing Date, payable to such Revolving Credit Lender and otherwise duly completed.
(b) The Swing Loans made by Fleet National Bank shall be evidenced by a single promissory note of Borrower substantially in the form of Exhibit A-2, dated the Closing Date, payable to Fleet National Bank and otherwise duly completed.
(c) The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by each Revolving Credit Lender to Borrower, and each payment made on account of the principal thereof, shall be recorded by such Revolving Credit Lender on its books and, prior to any transfer of any Note evidencing the Loans held by it, endorsed by such Revolving Credit Lender on the schedule attached to such Note or any continuation thereof; provided, however, that the failure of such Revolving Credit Lender to make any such recordation or endorsement shall not affect the obligations of Borrower to make a payment when due of any amount owing hereunder or under such Note.
(d) Borrower hereby designates the Administrative Agent to serve as Borrower’s agent, solely for purposes of this Section 2.9, to maintain a register (the “Register”) on which it will record the name and address of each Revolving Credit Lender, the Revolving Credit Commitment from time to time of each of the Revolving Credit Lenders, the principal amount of the Loans made by each of the Revolving Credit Lenders and each repayment in respect of the principal amount of the Loans of each Revolving Credit Lender. Failure to make any such recordation or any error in such recordation shall not affect Borrower’s obligations in respect of such Loans. The entries in the Register shall be conclusive, in the absence of manifest error, and Borrower, the Administrative Agent and the Revolving Credit Lenders shall treat each Person whose name is recorded in the Register as the owner of a Loan or other obligation hereunder as
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the owner thereof for all purposes of this Agreement and the other Credit Documents, notwithstanding any notice to the contrary. The Register shall be available for inspection by Borrower or any Revolving Credit Lender at any reasonable time and from time to time upon reasonable prior notice.
2.10 Optional Prepayments and Conversions or Continuations of Loans. Subject to Section 4.4, Borrower shall have the right to prepay Loans, or to Convert Loans of one Type into Loans of another Type or to Continue Loans of one Type as Loans of the same Type, at any time or from time to time to be applied as specified by Borrower; provided, however, that: (a) Borrower shall give the Administrative Agent notice of each such prepayment, Conversion or Continuation as provided in Section 4.5 (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder); and (b) if LIBOR Loans are prepaid or Converted other than on the last day of an Interest Period for such Loans, Borrower shall at such time pay all expenses and costs required by Section 5.5. Each notice of Conversion or Continuation shall be substantially in the form of Exhibit I.
Notwithstanding the foregoing, and without limiting the rights and remedies of the Revolving Credit Lenders under Section 10, in the event that any Event of Default shall have occurred and be continuing, the Administrative Agent may (and at the request of the Majority Revolving Credit Lenders shall) suspend the right of Borrower to Convert any Loan into a LIBOR Loan, or to Continue any Loan as a LIBOR Loan, in which event all Loans shall be Converted (on the last day(s) of the respective Interest Periods therefor) or Continued, as the case may be, as Alternate Base Rate Loans.
(a) Revolving Credit Extension Reductions. Until the Revolving Credit Commitment Termination Date, Borrower shall from time to time immediately prepay the Swing Loans and the Revolving Credit Loans (and/or provide cover for Letter of Credit Liabilities as specified in Section 2.11(b)) in such amounts as shall be necessary so that at all times the aggregate outstanding amount of the Revolving Credit Loans, plus the aggregate outstanding amount of Swing Loans, plus the aggregate outstanding Letter of Credit Liabilities shall not exceed the lesser of (i) the Borrowing Base or (ii) the aggregate Revolving Credit Commitments, each as in effect at such time, such amount to be applied, first, to Swing Loans, second, to Revolving Credit Loans outstanding and, third, as cover for Letter of Credit Liabilities outstanding as specified in Section 2.11(b). Notwithstanding the foregoing, if the amount of any prepayment of Loans required under this Section 2.11 shall be in excess of the amount of the Alternate Base Rate Loans at the time outstanding, only the portion of the amount of such prepayment as is equal to the amount of such outstanding Alternate Base Rate Loans shall be immediately prepaid and, at the election of Borrower, the balance of such required prepayment shall be either (i) deposited in the Collateral Account and applied to the prepayment of LIBOR Loans on the last day of the then next-expiring Interest Period for LIBOR Loans or (ii) prepaid immediately, together with any amounts owing to the Revolving Credit Lenders under Section 5.5. Notwithstanding any such deposit in the Collateral Account, interest shall continue to accrue on such Loans until prepayment. Interest on such amount held in the Collateral Account shall be for the account of Borrower (after deduction of reasonable fees and expenses).
(b) Cover for Letter of Credit Liabilities. In the event that Borrower shall be required pursuant to this Section 2.11 to provide cover for Letter of Credit Liabilities, Borrower shall effect the same by paying to the Administrative Agent immediately available funds in an amount equal to the required amount, which funds shall be retained
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by the Administrative Agent in the Collateral Account (as provided in the Security Agreement as collateral security in the first instance for the Letter of Credit Liabilities) in an amount not to exceed the face amount of all unexpired Letters of Credit in respect of which such cover was required to be provided until such time as all Letters of Credit shall have been terminated and all of the Letter of Credit Liabilities paid in full.
2.12 Replacement of Revolving Credit Lenders. Borrower shall have the right, if no Default or Event of Default then exists, to replace a Revolving Credit Lender (the “Replaced Lender”) with one or more other Eligible Persons reasonably acceptable to the Administrative Agent (collectively, the “Replacement Lender”) if (a) such Revolving Credit Lender is charging Borrower increased costs pursuant to Section 5.1 or Section 5.6 in excess of those being charged generally by the other Revolving Credit Lenders or such Revolving Credit Lender becomes incapable of making LIBOR Loans as provided in Section 5.3, and/or (b) as provided in Section 12.4(b), such Revolving Credit Lender refuses to consent to certain proposed amendments, waivers or modifications with respect to this Agreement or the other Credit Documents, and/or (c) such Revolving Credit Lender shall have failed to fund its portion of a Loan it is obligated to fund under Section 2.1, and/or (d) as provided in Section 2.4(b), such Revolving Credit Lender refuses to consent to Borrower’s request to extend the Initial Revolving Credit Commitment Termination Date; provided, however, that (i) at the time of any replacement pursuant to this Section 2.12, the Replacement Lender shall enter into one or more assignment agreements (and with all fees payable pursuant to Section 12.6 to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Revolving Credit Commitments and outstanding Loans of, and in each case Letter of Credit Interests by, the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced Lender, an amount equal to the sum of (A) the principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender, (B) all Reimbursement Obligations owing to such Replaced Lender, together with all then unpaid interest with respect thereto at such time, and (C) all accrued, but theretofore unpaid, fees owing to the Replaced Lender pursuant to Section 2.6, and (y) the Issuing Lender an amount equal to such Replaced Lender’s Revolving Credit Commitment Percentage of any Reimbursement Obligations (which at such time remains a Reimbursement Obligation) to the extent such amount was not theretofore funded by such Replaced Lender, and (ii) all Obligations of Borrower then owing to the Replaced Lender (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement. Upon the execution of the respective assignment agreement, the payment of amounts referred to in clauses (i) and (ii) above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of Notes executed by Borrower, the Replacement Lender shall become a Revolving Credit Lender hereunder and the Replaced Lender shall cease to constitute a Revolving Credit Lender hereunder and be released of all its obligations as a Revolving Credit Lender, except with respect to indemnification provisions applicable to the Replaced Lender under this Agreement, which shall survive as to such Replaced Lender.
2.13 Annual Cleandown. For a consecutive fifteen-day period between the first day of December and the last day of January of each calendar year, beginning in December 2002, the sum of the aggregate principal amount of Revolving Credit Loans outstanding, plus the aggregate outstanding principal amount of Swing Loans, shall not exceed (a) $35 million for the period December, 2002 through January, 2003, and (b) $20 million for all similar annual periods thereafter.
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Section 3. Payments of Principal and Interest.
3.1 Repayment of Loans. Borrower hereby promises to pay in cash to the Administrative Agent for the account of each Revolving Credit Lender the entire outstanding principal amount of such Lender’s Revolving Credit Loans, and each Revolving Credit Loan shall mature, on the Revolving Credit Commitment Termination Date (unless sooner accelerated pursuant to Section 10 hereof). Borrower hereby promises to pay to the Swing Loan Lender for its account the entire outstanding principal amount of the Swing Loans, and the Swing Loans shall mature, on the Swing Loan Maturity Date.
(a) Borrower hereby promises to pay to the Administrative Agent for the account of each Revolving Credit Lender interest on the unpaid principal amount of each Loan made by such Revolving Credit Lender for the period from and including the date of such Loan to but excluding the date such Loan shall be paid in full, at the following rates per annum:
(i) during such periods as such Loan is an Alternate Base Rate Loan, the Alternate Base Rate (as in effect from time to time), plus the Applicable Margin and
(ii) during such periods as such Loan is a LIBOR Loan, for each Interest Period relating thereto, the LIBOR Rate for such Loan for such Interest Period, plus the Applicable Margin.
(b) During the continuance of any Event of Default (and whether or not the Administrative Agent exercises its rights on account thereof), all Revolving Credit Loans shall bear interest, at the option of the Administrative Agent or at the instruction of the Majority Revolving Credit Lenders, at a rate which is the aggregate of the applicable rate (including the Applicable Margin) for Alternate Base Rate Loans and/or LIBOR Loans, as applicable, plus two percent (2%) per annum. Interest which accrues under this paragraph shall be payable on demand.
(c) Accrued interest on each Loan shall be payable (i) in the case of an Alternate Base Rate Loan, monthly in arrears on the last day of each calendar month, (ii) in the case of a LIBOR Loan, on the last day of each Interest Period therefor and, if such Interest Period is longer than three months, at three-month intervals following the first day of such Interest Period and (iii) in the case of any LIBOR Loan, upon the payment or prepayment thereof or the Conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid or Converted), except that interest payable at the rate set forth in Section 3.2(b) shall be payable from time to time on demand. Promptly after the determination of any interest rate provided for herein or any change therein, the Administrative Agent shall give notice thereof to the Revolving Credit Lenders to which such interest is payable and to Borrower.
(d) All agreements among Borrower, the Guarantors, the Administrative Agent and the Revolving Credit Lenders are hereby expressly limited so that, in no contingency or event whatsoever, whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Administrative Agent or the Revolving Credit Lenders for the use or the forbearance of the indebtedness evidenced hereby exceed the maximum permissible under applicable law. As used herein, the term “applicable law”, shall mean the law in
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effect as of the date hereof, provided, however, that in the event there is a change in the law which results in a higher permissible rate of interest, then this Agreement, the Notes and the other Credit Documents shall be governed by such new law as of its effective date. In this regard, it is expressly agreed that it is the intent of Borrower, the Administrative Agent and the Revolving Credit Lenders in the execution, delivery and acceptance of this Agreement to contract in strict compliance with the laws of the Commonwealth of Massachusetts from time to time in effect. If, under or from any circumstances whatsoever, fulfillment of any provision hereof or of any of the Credit Documents or the Security Documents at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by applicable law, then the obligation to be fulfilled shall automatically be reduced to the limit of such validity, and if under or from any circumstances whatsoever the Administrative Agent or the Revolving Credit Lenders should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal balance evidenced by the Notes and not to the payment of interest. This provision shall control every other provision of all agreements among Borrower, the Guarantors, the Administrative Agent and the Revolving Credit Lenders.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
(a) Except to the extent otherwise provided herein, all payments of principal, interest, Reimbursement Obligations and other amounts to be made by Borrower under this Agreement and the Notes, and, except to the extent otherwise provided therein, all payments to be made by the Obligors under any other Credit Document, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Administrative Agent at its account at the Principal Office, not later than 1:00 p.m. Boston, Massachusetts time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day).
(b) Borrower shall, at the time of making each payment under this Agreement or any Note for the account of any Revolving Credit Lender, specify to the Administrative Agent (which shall so notify the intended recipient(s) thereof) the Loans, Reimbursement Obligations or other amounts payable by Borrower hereunder to which such payment is to be applied (and in the event that Borrower fails to so specify, or if an Event of Default has occurred and is continuing, the Administrative Agent may distribute such payment to the Revolving Credit Lenders for application in such manner as it or the Majority Revolving Credit Lenders, subject to Section 4.2, may determine to be appropriate).
(c) Except to the extent otherwise provided in the second sentence of Section 2.3(g), each payment received by the Administrative Agent under this Agreement or any Note for the account of any Revolving Credit Lender shall be paid by the Administrative Agent to such Revolving Credit Lender, in immediately available funds, (x) if the payment was actually received by the Administrative Agent prior to 1:00 p.m. (Boston, Massachusetts time) on any day, on such day and (y) if the payment was actually received by the Administrative Agent after 1:00 p.m. (Boston, Massachusetts time) on any day, on the following Business Day (it being understood that to the extent that any such payment is not made in full by the Administrative Agent, the Administrative Agent shall pay to such Revolving Credit Lender, upon demand, interest
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at the Federal Funds Rate from the date such amount was required to be paid to such Revolving Credit Lender pursuant to the foregoing clauses until the date the Administrative Agent pays such Revolving Credit Lender the amount).
(d) If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension.
4.2 Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each borrowing of Loans from the Revolving Credit Lenders under Section 2.1 shall be made by, and each payment of commitment fees under Section 2.6 in respect of Revolving Credit Commitments shall be for account of, and each termination or reduction of the amount of the Revolving Credit Commitments under Section 2.5 shall be applied to the respective Revolving Credit Commitments of, the Revolving Credit Lenders, pro rata according to the amounts of their respective Revolving Credit Commitments; provided, however, that Swing Loans shall be made only by, and interest thereon shall be paid by Borrower only to, the Swing Loan Lender (subject to such Revolving Credit Lender’s obligations in respect of any participation therein purchased by the other Revolving Credit Lenders as provided in Section 2.1(b)); (b) except as otherwise provided in Section 5.4, LIBOR Loans having the same Interest Period shall be allocated pro rata among the Revolving Credit Lenders according to the amounts of their respective Revolving Credit Commitments (in the case of the making of Loans) or their respective Revolving Credit Loans (in the case of Conversions and Continuations of Loans); (c) each payment or prepayment of principal of Revolving Credit Loans by Borrower shall be made for account of the relevant Revolving Credit Lenders pro rata in accordance with the respective unpaid outstanding principal amounts of the Loans held by them; and (d) each payment of interest on Revolving Credit Loans by Borrower shall be made for account of the Revolving Credit Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Revolving Credit Lenders.
4.3 Computations. Interest on LIBOR Loans shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable and interest on Alternate Base Rate Loans and Reimbursement Obligations shall be computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. Computations of commitment fees and Letter of Credit fees shall be based upon a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. Notwithstanding the foregoing, for each day that the Alternate Base Rate is calculated by reference to the Federal Funds Rate, interest on Alternate Base Rate Loans and Reimbursement Obligations shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day).
4.4 Minimum Amounts. Except for mandatory prepayments made pursuant to Section 2.11 and Conversions or prepayments made pursuant to Section 5.4, and prepayments of the entire principal balance of the Loans, each borrowing, Conversion and prepayment of principal of Loans (other than Swing Loans, for which the minimum amounts thereof are in Section 2.1(b)) shall be in an amount at least equal to (1) $500,000 and in integral multiples of $100,000 in excess thereof with respect to Alternate Base Rate Loans and (2) $1,000,000 and in integral multiples of $100,000 in excess thereof with respect to LIBOR Loans (borrowings, Conversions or prepayments of or into Loans of different Types or, in the case of LIBOR Loans, having different Interest Periods at the same time hereunder to be deemed separate borrowings, Conversions and prepayments for purposes of the foregoing, one for each Type or Interest
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Period). Anything in this Agreement to the contrary notwithstanding, the aggregate principal amount of LIBOR Loans having the same Interest Period shall be in an amount at least equal to $1,000,000 and in multiples of $100,000 in excess thereof and, if any LIBOR Loans or portions thereof would otherwise be in a lesser principal amount for any period, such Loans or portions, as the case may be, shall be Alternate Base Rate Loans during such period.
4.5 Certain Notices. Notices by Borrower to the Administrative Agent of terminations or reductions of the Revolving Credit Commitments, of borrowings, Conversions, Continuations and optional prepayments of Loans, of Types of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Administrative Agent not later than 11:00 a.m. Boston, Massachusetts time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing, Conversion, Continuation or prepayment or the first day of such Interest Period specified in the table below:
NOTICE PERIODS
|
Notice |
|
Number of Business Days Prior |
|
|
|
|
|
Termination or reduction of Revolving Credit Commitments |
|
2 |
|
Borrowing or optional prepayment of, or Conversions into, Alternate Base Rate Loans (including Swing Loans) |
|
same day |
|
Borrowing or optional prepayment of, Conversions into, Continuations as, or duration of Interest Periods for, LIBOR Loans |
|
3 |
Each such notice of termination or reduction shall specify the amount of the Revolving Credit Commitments to be terminated or reduced. Each such notice of borrowing, Conversion, Continuation or prepayment shall specify the Loans to be borrowed, Converted, Continued or prepaid and the amount (subject to Section 4.4) and Type of each Loan to be borrowed, Converted, Continued or prepaid and the date of borrowing, Conversion, Continuation or prepayment (which shall be a Business Day). Each such notice of the duration of an Interest Period shall specify the Loans to which such Interest Period is to relate. The Administrative Agent shall promptly notify the Revolving Credit Lenders of the contents of each such notice. In the event that Borrower fails to select the Type of Loan, or the duration of any Interest Period for any LIBOR Loan, within the time period and otherwise as provided in this Section 4.5, such Loan (if outstanding as a LIBOR Loan) will be automatically Converted into an Alternate Base Rate Loan on the last day of the then current Interest Period for such Loan or (if outstanding as an Alternate Base Rate Loan) will remain as, or (if not then outstanding) will be made as, an Alternate Base Rate Loan.
4.6 Non-Receipt of Funds by the Administrative Agent. Unless the Administrative Agent shall have received written notice from a Revolving Credit Lender or Borrower (the “Payor”) prior to the date on which the Payor is to make payment to the Administrative Agent of (in the case of a Revolving Credit Lender) the proceeds of a Loan to be made by such Revolving Credit Lender hereunder or (in the case of Borrower) a payment to the Administrative Agent for the account of one or more of the Revolving Credit Lenders hereunder (such payment being herein called the “Required Payment”), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to the Administrative Agent, the Administrative Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof available
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to the intended recipient(s) on such date; and, if the Payor has not in fact made the Required Payment to the Administrative Agent, the recipient(s) of such payment shall, on demand, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date (the “Advance Date”) such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to make such payment, the Administrative Agent shall be entitled to recover such amount, on demand, from the Payor, together with interest as aforesaid; provided, however, that if neither the recipient(s) nor the Payor shall return the Required Payment to the Administrative Agent within three Business Days of the Advance Date, then, retroactively to the Advance Date, the Payor and the recipient(s) shall each be obligated to pay interest on the Required Payment as follows (without double recovery):
(a) if the Required Payment shall represent a payment to be made by Borrower to the Revolving Credit Lenders, Borrower and the recipient(s) shall each be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the rate set forth in Section 3.2(b) (without duplication of the obligation of Borrower under Section 3.2 to pay interest on the Required Payment at the rate set forth in Section 3.2(b)), it being understood that the return by the recipient(s) of the Required Payment to the Administrative Agent shall not limit such obligation of Borrower under Section 3.2 to pay interest at the rate set forth in Section 3.2(b) in respect of the Required Payment and
(b) if the Required Payment shall represent proceeds of a Loan to be made by the Revolving Credit Lenders to Borrower, the Payor and Borrower shall each be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment pursuant to Section 3.2(a), it being understood that the return by Borrower of the Required Payment to the Administrative Agent shall not limit any claim Borrower may have against the Payor in respect of such Required Payment.
4.7 Right of Setoff; Sharing of Payments, Etc.
(a) Each Obligor agrees that, in addition to (and without limitation of) any right of setoff, banker’s lien or counterclaim a Revolving Credit Lender may otherwise have, each Revolving Credit Lender shall be entitled, at its option (to the fullest extent permitted by law), to set off and apply any deposit (general or special, time or demand, provisional or final), or other indebtedness, held by it for the credit or account of such Obligor at any of its offices, in Dollars or in any other currency, against any principal of or interest on any of such Revolving Credit Lender’s Loans, Reimbursement Obligations or any other amount payable to such Revolving Credit Lender hereunder that is not paid when due (regardless of whether such deposit or other indebtedness is then due to such Obligor), in which case it shall promptly notify such Obligor and the Administrative Agent thereof; provided, however, that such Revolving Credit Lender’s failure to give such notice shall not affect the validity thereof.
(b) Each of the Revolving Credit Lenders agrees that, if it should receive (other than pursuant to Section 5) any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans, Reimbursement Obligations or fees, of a sum which with respect to the related sum or sums received by other Revolving Credit Lenders is in a greater proportion than the total of such amounts then owed and due to such Revolving Credit
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Lender bears to the total of such amounts then owed and due to all of the Revolving Credit Lenders immediately prior to such receipt, then such Revolving Credit Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Revolving Credit Lenders an interest in the Obligations of the respective Obligor to such Revolving Credit Lenders in such amount as shall result in a proportional participation by all of the Revolving Credit Lenders in such amount; provided, however, that if all or any portion of such excess amount is thereafter recovered from such Revolving Credit Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Borrower consents to the foregoing arrangements.
(c) Borrower agrees that any Revolving Credit Lender so purchasing such a participation may exercise all rights of setoff, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Revolving Credit Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Revolving Credit Lender in the amount of such participation.
(d) Nothing contained herein shall require any Revolving Credit Lender to exercise any such right or shall affect the right of any Revolving Credit Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of any Obligor. If, under any applicable bankruptcy, insolvency or other similar law, any Revolving Credit Lender receives a secured claim in lieu of a setoff to which this Section 4.7 applies, such Revolving Credit Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Revolving Credit Lenders entitled under this Section 4.7 to share in the benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
(a) If the adoption of, or any change in, any Requirement of Law or in the interpretation or application thereof or compliance by any Revolving Credit Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority or the NAIC made subsequent to the Closing Date:
(i) shall subject any Revolving Credit Lender to any tax of any kind whatsoever with respect to this Agreement, any Note, any Letter of Credit or any Revolving Credit Lender’s participation therein, any Letter of Credit Document or any LIBOR Loan made by it or change the basis of taxation of payments to such Revolving Credit Lender in respect thereof by any Governmental Authority (except for taxes covered by Section 5.6 and changes in the rate of tax on the overall net income of such Revolving Credit Lender by any Governmental Authority);
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Revolving Credit Lender which is not otherwise included in the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Revolving Credit Lender any other condition;
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and the result of any of the foregoing is to increase the cost to such Revolving Credit Lender, by an amount which such Revolving Credit Lender deems to be material, of making, converting into, continuing or maintaining LIBOR Loans or issuing or participating in Letters of Credit or to reduce any amount receivable hereunder in respect thereof then, in any such case, Borrower shall promptly pay such Revolving Credit Lender, upon its demand, any additional amounts necessary to compensate such Revolving Credit Lender for such increased cost or reduced amount receivable. If any Revolving Credit Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify Borrower, through the Administrative Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts setting forth the calculation of such additional amounts pursuant to this Section 5.1 submitted by such Revolving Credit Lender, through the Administrative Agent, to Borrower shall be conclusive in the absence of clearly demonstrable error. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) In the event that any Revolving Credit Lender shall have determined that the adoption after the Closing Date of any law, rule, regulation or guideline regarding capital adequacy (or any change after the Closing Date therein or in the interpretation or application thereof) or compliance by any Revolving Credit Lender or any corporation controlling such Revolving Credit Lender with any request or directive after the Closing Date regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority or the NAIC, including, without limitation, the issuance of any final rule, regulation or guideline, does or shall have the effect of reducing the rate of return on such Revolving Credit Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under any Letter of Credit to a level below that which such Revolving Credit Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Revolving Credit Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Revolving Credit Lender to be material, then from time to time, after submission by such Revolving Credit Lender to Borrower (with a copy to the Administrative Agent) of a prompt written request therefor, Borrower shall promptly pay to such Revolving Credit Lender such additional amount or amounts as will compensate such Revolving Credit Lender for such reduction.
5.2 Limitation on Types of Loans. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any LIBOR Base Rate for any Interest Period:
(i) the Administrative Agent determines, which determination shall be conclusive, that quotations of interest rates for the relevant deposits referred to in the definition of “LIBOR Base Rate” in Section 1.1 are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR Loans as provided herein; or
(ii) if the Majority Revolving Credit Lenders determine, which determination shall be conclusive, that the relevant rates of interest referred to in the definition of “LIBOR Base Rate” in Section 1.1 upon the basis of which the rate of interest for LIBOR Loans for such Interest Period is to be determined are not likely adequate to cover the cost to the applicable Revolving Credit Lenders of making or maintaining LIBOR Loans for such Interest Period,
then the Administrative Agent shall give Borrower and each Revolving Credit Lender prompt notice thereof, and so long as such condition remains in effect, the affected Revolving Credit
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Lenders shall be under no obligation to make additional LIBOR Loans, to Continue LIBOR Loans or to Convert Alternate Base Rate Loans into LIBOR Loans and Borrower shall, on the last day(s) of the then current Interest Period(s) for the outstanding LIBOR Loans, either prepay such Loans or Convert such Loans into Alternate Base Rate Loans in accordance with Section 2.10.
5.3 Illegality. Notwithstanding any other provision of this Agreement, in the event that any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Revolving Credit Lender or its Applicable Lending Office to honor its obligation to make or maintain LIBOR Loans hereunder (and, in the sole opinion of such Revolving Credit Lender, the designation of a different Applicable Lending Office would either not avoid such unlawfulness or would be disadvantageous to such Revolving Credit Lender), then such Revolving Credit Lender shall promptly notify Borrower thereof (with a copy to the Administrative Agent) and such Revolving Credit Lender’s obligation to make or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be suspended until such time as such Revolving Credit Lender may again make and maintain LIBOR Loans (in which case the provisions of Section 5.4 shall be applicable).
5.4 Treatment of Affected Loans. If the obligation of any Revolving Credit Lender to make LIBOR Loans or to Continue, or to Convert Alternate Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 5.3, such Revolving Credit Lender’s LIBOR Loans shall be automatically Converted into Alternate Base Rate Loans on the last day(s) of the then current Interest Period(s) for such LIBOR Loans (or on such earlier date as such Revolving Credit Lender may specify to Borrower with a copy to the Administrative Agent as is required by law) and, unless and until such Revolving Credit Lender gives notice as provided below that the circumstances specified in Section 5.3 which gave rise to such Conversion no longer exist:
(a) to the extent that such Revolving Credit Lender’s LIBOR Loans have been so Converted, all payments and prepayments of principal which would otherwise be applied to such Revolving Credit Lender’s LIBOR Loans shall be applied instead to its Alternate Base Rate Loans; and
(b) all Loans which would otherwise be made or Continued by such Revolving Credit Lender as LIBOR Loans shall be made or Continued instead as Alternate Base Rate Loans and all Alternate Base Rate Loans of such Revolving Credit Lender which would otherwise be Converted into LIBOR Loans shall remain as Alternate Base Rate Loans.
If such Revolving Credit Lender gives notice to Borrower with a copy to the Administrative Agent that the circumstances specified in Section 5.3 which gave rise to the Conversion of such Revolving Credit Lender’s LIBOR Loans pursuant to this Section 5.4 no longer exist (which such Revolving Credit Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR Loans are outstanding, such Revolving Credit Lender’s Alternate Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Revolving Credit Lenders holding LIBOR Loans and by such Revolving Credit Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with their respective Revolving Credit Commitments.
5.5 Compensation.
(a) Borrower agrees to indemnify each Revolving Credit Lender and to hold each Revolving Credit Lender harmless from any loss or expense which such Revolving
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Credit Lender may sustain or incur as a consequence of (1) default by Borrower in payment when due of the principal amount of or interest on any LIBOR Loan, (2) default by Borrower in making a borrowing of, Conversion into or Continuation of LIBOR Loans after Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (3) default by Borrower in making any prepayment after Borrower has given a notice thereof in accordance with the provisions of this Agreement or (4) the making of a payment or a prepayment of LIBOR Loans on a day which is not the last day of an Interest Period with respect thereto (whether by acceleration or otherwise), including in each case, any such loss (including loss of margin) or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained.
(b) For the purpose of calculation of all amounts payable to a Revolving Credit Lender under this Section 5.5 each Revolving Credit Lender shall be deemed to have actually funded its relevant LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount of the LIBOR Loan and having a maturity comparable to the relevant Interest Period; provided, however, that each Revolving Credit Lender may fund each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this subsection. Any Revolving Credit Lender requesting compensation pursuant to this Section 5.5 will furnish to the Administrative Agent and Borrower a certificate setting forth the basis and amount of such request and such certificate, absent manifest error, shall be conclusive. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.
5.6 Net Payments.
(a) All payments made by Borrower or the Guarantors hereunder or under any Note and the Guarantees will be made without setoff, counterclaim or other defense. Except as provided in Section 5.6(b), all such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any Governmental Authority or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding, except as provided in the second succeeding sentence, any tax imposed on or measured by the net income or net profits of a Revolving Credit Lender (i) pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or Applicable Lending Office of such Revolving Credit Lender is located or any subdivision thereof or therein or (ii) as a result of a present or former connection between the Administrative Agent or such Revolving Credit Lender and the Governmental Authority imposing such net income or net profits tax (other than any such connection arising solely from the Administrative Agent or such Revolving Credit Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement, the Guarantees or any Note)) and all interest, penalties or similar liabilities with respect thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as “Covered Taxes”). If any Covered Taxes are so levied or imposed, Borrower and each Guarantor, as the case may be, agrees to pay the full amount of such Covered Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, the Guarantees or under any Note, after withholding or deduction for or on account of any Covered Taxes, will not be less than the amount provided for herein or in such Note. If any amounts are payable in respect of Covered Taxes pursuant to the preceding sentence, Borrower agrees to reimburse each Revolving Credit Lender, upon the written request of such Revolving
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Credit Lender, (i) for taxes imposed on or measured by the net income or net profits of such Revolving Credit Lender pursuant to the laws of the jurisdiction in which such Revolving Credit Lender is organized or in which the principal office or Applicable Lending Office of such Revolving Credit Lender is located or under the laws of any political subdivision or taxing authority of any such jurisdiction by reason of the making of payments in respect of Covered Taxes pursuant to this Section (including pursuant to this sentence) and (ii) for any withholding of taxes as such Revolving Credit Lender shall determine are payable by, or withheld from, such Revolving Credit Lender in respect of amounts paid in respect of Covered Taxes to or on behalf of such Revolving Credit Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Revolving Credit Lender pursuant to this sentence; provided, however, that Borrower’s obligations shall be reduced by any Tax Benefit described in the following paragraph. Borrower or the Guarantors, as the case may be, will furnish to the Administrative Agent within 45 days after the date the payment of any Covered Taxes is due pursuant to applicable law certified copies of tax receipts or other documentation evidencing such payment by Borrower. Borrower and the Guarantors agree to indemnify and hold harmless each Revolving Credit Lender, and reimburse such Revolving Credit Lender upon its written request, for the amount of any Covered Taxes so levied or imposed and paid by such Revolving Credit Lender and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto.
If Borrower or any Guarantor pays any additional amount under this Section 5.6 to a Revolving Credit Lender and such Revolving Credit Lender determines in its reasonable discretion that it has actually received or realized in connection therewith any refund or any reduction of, or credit against, its tax liabilities in or with respect to the taxable year in which the additional amount is paid (a “Tax Benefit”), such Revolving Credit Lender shall pay to Borrower or such Guarantor, as the case may be, an amount that the Revolving Credit Lender shall, in its reasonable discretion, determine is equal to the net benefit, after tax, which was obtained by the Revolving Credit Lender in such year as a consequence of such Tax Benefit; provided, however, that (i) such Revolving Credit Lender shall not be required to make any payment under this paragraph of this Section 5.6(a) if an Event of Default shall have occurred and be continuing; (ii) any taxes that are imposed on a Revolving Credit Lender as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of such Revolving Credit Lender that otherwise would not have expired) of any Tax Benefit with respect to which such Revolving Credit Lender has made a payment to Borrower or any Guarantor pursuant to this paragraph of this Section 5.6(a) shall be treated as a tax for which Borrower or any Guarantor is obligated to indemnify such Revolving Credit Lender pursuant to this Section 5.6 without any exclusions or defenses; and (iii) nothing in this paragraph of this Section 5.6(a) shall require the Revolving Credit Lender to disclose any confidential information to Borrower or any Guarantor (including, without limitation, its tax returns).
(b) Each Revolving Credit Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “Non-U.S. Lender”) agrees to deliver to Borrower and the Administrative Agent on or prior to the Closing Date, or in the case of a Revolving Credit Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 12.6 (unless the respective Revolving Credit Lender was already a Revolving Credit Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Revolving Credit Lender, (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or W-8BEN (or successor forms) certifying to such Revolving Credit Lender’s entitlement to a complete exemption from, or reduction in rate of, United
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States withholding tax with respect to payments to be made under this Agreement and under any Note (or, with respect to any assignee Revolving Credit Lender, at least as extensive as the assigning Revolving Credit Lender), or (ii) if the Revolving Credit Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or W-8BEN (or successor forms) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit G (any such certificate, a “Section 5.6 Certificate”) and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (or successor form) certifying to such Revolving Credit Lender’s entitlement to a complete exemption from, or reduction in rate of, United States withholding tax with respect to payments to be made under this Agreement and under any Note (or, with respect to any assignee Revolving Credit Lender, at least as extensive as the assigning Revolving Credit Lender). In addition, each Revolving Credit Lender agrees that from time to time after the Closing Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, it will deliver to Borrower and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or W-8BEN (or successor forms), or Form W-8BEN and a Section 5.6 Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Revolving Credit Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement and any Note, or it shall immediately notify Borrower and the Administrative Agent of its inability to deliver any such Form or Certificate, in which case such Revolving Credit Lender shall not be required to deliver any such form or certificate pursuant to this Section 5.6(b). Notwithstanding the foregoing, no Revolving Credit Lender shall be required to deliver any such form or certificate if a change in treaty, law or regulation has occurred prior to the date on which such delivery would otherwise be required that renders any such form or certificate inapplicable or would prevent the Revolving Credit Lender from duly completing and delivering any such form or certificate with respect to it and such Revolving Credit Lender so advises Borrower. Each Person that shall become a Participant pursuant to Section 12.6 shall, upon the effectiveness of the related transfer, be required to provide all the forms and statements required pursuant to this Section 5.6(b), provided that in the case of a Participant such Participant shall furnish all such required forms and statements to the Revolving Credit Lender from which the related participation shall have been purchased. Borrower shall not be required to indemnify any Non-U.S. Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect of U.S. federal withholding tax pursuant to paragraph (a) above to the extent that (i) the obligation to withhold amounts with respect to U.S. federal withholding tax existed on the date such Non-U.S. Lender became a party to this Agreement (or, in the case of a Non-U.S. Participant, on the date such Participant became a Participant hereunder); provided, however, that this clause (i) shall not apply to the extent that (x) the indemnity payments or additional amounts any Revolving Credit Lender (or Participant) would be entitled to receive (without regard to this clause (i)) do not exceed the indemnity payment or additional amounts that the person making the assignment, participation or transfer to such Revolving Credit Lender (or Participant) would have been entitled to receive in the absence of such assignment, participation or transfer, or (y) such assignment, participation or transfer had been requested by Borrower, (ii) the obligation to pay such additional amounts would not have arisen but for a failure by such Non-U.S. Lender or Non-U.S. Participant to comply with the provisions of this Section 5.6(b) or (iii) any of the representations or certifications made by a Non-U.S. Lender or Non-U.S. Participant pursuant to this Section 5.6(b) above are incorrect at the time a payment hereunder is made, other than by reason of any change in treaty, law or regulation or interpretation thereof having effect after the date such representations or certifications were made. Notwithstanding anything to the
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contrary contained in the preceding sentence or elsewhere in this Section 5.6 and except as set forth in Section 12.6(b), Borrower agrees to pay additional amounts and to indemnify each Revolving Credit Lender in the manner set forth in Section 5.6(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Closing Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of Covered Taxes.
(c) In addition, Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as “Other Taxes”).
Section 6. Guarantee.
6.1 The Guarantee. The Guarantors hereby jointly and severally guarantee as a primary obligor and not as a surety to each Revolving Credit Lender and the Administrative Agent and their respective successors and assigns the prompt payment in full in cash when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest (including any interest that would accrue but for the provisions of the Bankruptcy Code after any bankruptcy or insolvency petition under the Bankruptcy Code) on the Loans made by the Revolving Credit Lenders to, and the Notes held by each Revolving Credit Lender of, Borrower and all other amounts and Obligations from time to time owing to the Revolving Credit Lenders or the Administrative Agent by Borrower under this Agreement and under the Notes and by any Obligor under any of the other Credit Documents, and all obligations of Borrower or any Subsidiary to any Revolving Credit Lender or any Affiliate of any Revolving Credit Lender in respect of any Swap Contract and all Obligations owing to the Issuing Lender under the Letter of Credit Documents, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the “Guaranteed Obligations”). The Guarantors hereby jointly and severally agree that if Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
6.2 Obligations Unconditional. The obligations of the Guarantors under Section 6.1 are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of Borrower under this Agreement, the Notes or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor (except for payment in full). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above:
(a) at any time or from time to time, without notice to the Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;
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(b) any of the acts mentioned in any of the provisions of this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement, the Notes or any other Credit Document or any other agreement or instrument referred to herein or therein shall be amended, modified or waived in any respect or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;
(d) any lien or security interest granted to, or in favor of, the Administrative Agent or any Revolving Credit Lender or Revolving Credit Lenders as security for any of the Guaranteed Obligations shall fail to be perfected;
(e) the release of any other Guarantor; or
(f) the exercise of the Increased Facility Amount.
The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Revolving Credit Lender exhaust any right, power or remedy or proceed against Borrower under this Agreement or the Notes or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations. The Guarantors waive any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Revolving Credit Lender upon this guarantee or acceptance of this guarantee, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this guarantee, and all dealings between Borrower and the Revolving Credit Lenders shall likewise be conclusively presumed to have been had or consummated in reliance upon this guarantee. This guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by the Revolving Credit Lenders, and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Revolving Credit Lenders or any other Person at any time of any right or remedy against Borrower or against any other Person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. This guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the Revolving Credit Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.
6.3 Reinstatement. The obligations of the Guarantors under this Section 6 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise. The Guarantors jointly and severally agree that they will indemnify the Administrative Agent and each Revolving Credit Lender on demand for all reasonable costs and expenses (including reasonable fees of counsel) incurred by the Administrative Agent or such Revolving Credit Lender in connection with such rescission or
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restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law, other than any costs or expenses resulting from the gross negligence or bad faith of such Creditor.
6.4 Subrogation; Subordination. Each Guarantor hereby agrees that until the indefeasible payment and satisfaction in full in cash of all Guaranteed Obligations and the expiration and termination of the Revolving Credit Commitments of the Revolving Credit Lenders under this Agreement it shall not exercise any right or remedy arising by reason of any performance by it of its guarantee in Section 6.1, whether by subrogation or otherwise, against Borrower or any other Guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. The payment of any amounts due with respect to any indebtedness of Borrower or any other Guarantor now or hereafter owing to any Guarantor by reason of any payment by such Guarantor under the Guarantee in this Section 6 is hereby subordinated to the prior indefeasible payment in full in cash of the Guaranteed Obligations. Each Guarantor agrees that it will not demand, xxx for or otherwise attempt to collect any such indebtedness of Borrower to such Guarantor until the Obligations shall have been indefeasibly paid in full in cash. If, notwithstanding the foregoing sentence, any Guarantor shall prior to the indefeasible payment in full in cash of the Guaranteed Obligations collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Guarantor as trustee for the Administrative Agent and the Revolving Credit Lenders and be paid over to the Administrative Agent on account of the Guaranteed Obligations without affecting in any manner the liability of such Guarantor under the other provisions of the guaranty contained herein.
6.5 Remedies. The Guarantors jointly and severally agree that, as between the Guarantors and the Revolving Credit Lenders, the obligations of Borrower under this Agreement and the Notes may be declared to be forthwith due and payable as provided in Section 10 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 10) for purposes of Section 6.1 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by Borrower) shall forthwith become due and payable by the Guarantors for purposes of Section 6.1.
6.6 Continuing Guarantee. The guarantee in this Section 6 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising.
6.7 General Limitation on Guarantee Obligations. In any action or proceeding involving any state corporate law, or any state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 6.1 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 6.1, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Revolving Credit Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.
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Section 7. Conditions Precedent.
7.1 Effectiveness of This Agreement and Initial Extension of Credit Under This Agreement. The obligation of the Revolving Credit Lenders to make any initial extension of credit hereunder (whether by making a Loan or issuing a Letter of Credit) is subject to the satisfaction of the conditions precedent that:
(a) Documentation and Evidence of Certain Matters. The Administrative Agent shall have received the following documents, each duly executed where appropriate (with sufficient conformed copies for each Revolving Credit Lender), each of which shall be reasonably satisfactory in form and substance to the Administrative Agent (and to the extent specified below, to each Revolving Credit Lender):
(i) Corporate Documents. Certified true and complete copies of the charter and by-laws (or equivalent documents) of each Obligor and of all corporate authority for each Obligor (including board of director resolutions and evidence of the incumbency, including specimen signatures, of officers) with respect to the execution, delivery and performance of such of the Credit Documents to which such Obligor is intended to be a party and each other document to be delivered by such Obligor from time to time in connection herewith and the extensions of credit hereunder and the consummation of the Transactions, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of Borrower.
(ii) Officer’s Certificate; Compliance Certificate. A Compliance Certificate in the form of Exhibit L hereto and an Officer’s Certificate of Borrower, dated the Closing Date, (A) to the effect set forth in clauses (i) and (ii) of Section 7.2(a), (B) to the effect that all conditions precedent to the making of such extension of credit have been satisfied, (C) to the effect that execution and delivery of this Agreement, and borrowings under this Agreement, do not cause a default or breach under the Senior Subordinated Notes Documents and showing reasonably detailed calculations thereof, and (D) that there has been no Material Adverse Change since the last audited financial statements furnished the Revolving Credit Lenders.
(iii) Opinion of Counsel. Opinion of Fulbright & Xxxxxxxx, L.L.P., counsel to the Obligors, in form and substance satisfactory to the Administrative Agent (and each Obligor hereby instructs such counsel to deliver such opinion to the Revolving Credit Lenders and the Administrative Agent).
(iv) The Credit Agreement. This Agreement, (i) executed and delivered by a duly authorized officer of Borrower, with a counterpart for each Revolving Credit Lender, and (ii) executed and delivered by a duly authorized officer of each Revolving Credit Lender and the Administrative Agent.
(v) Notes. The Notes, duly completed and executed for each Revolving Credit Lender and Swing Loan Lender.
(vi) Transaction Documents. All other Transaction Documents duly executed and completed by the parties thereto.
(b) Date of Closing. Such extension of credit shall be made on or before September 30, 2002.
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(c) Borrowing Base Certificate. The Administrative Agent and the Revolving Credit Lenders shall have received, and the Majority Revolving Credit Lenders shall be satisfied (as to form and substance) with, a Borrowing Base Certificate prepared as of the last Business Day of the month immediately preceding the Closing Date. In the event the Borrowing Base has changed or, in Borrower’s reasonable judgment, is expected to change, as of the Closing Date, Borrower shall deliver to the Administrative Agent and the Revolving Credit Lenders an additional Borrowing Base Certificate on the Closing Date.
(d) Appraisal. The Administrative Agent shall have received such Inventory and other appraisals as the Administrative Agent may reasonably request, each in form and substance satisfactory to the Administrative Agent, the costs of any such appraisals to be borne by the Borrower.
(e) Environmental Report. The Administrative Agent shall have received a satisfactory environmental site assessment report or reports for each Mortgaged Real Property, addressed to the Administrative Agent or accompanied by satisfactory reliance letters addressed to the Administrative Agent allowing the Administrative Agent to rely fully on said report or reports as if addressed to the Administrative Agent. All costs related to said site assessment shall be borne by the Borrower.
(f) Approvals. All governmental (domestic and foreign) and other third-party approvals and consents necessary in connection with the Transactions and the other transactions contemplated hereby (without the imposition of any materially burdensome or materially adverse conditions) shall have been obtained and shall be in full force and effect (or there shall be a plan reasonably satisfactory to the Administrative Agent for the obtaining thereof).
(g) No Material Adverse Change. The Administrative Agent shall be reasonably satisfied that any financial statements delivered to it fairly present the business and financial condition of the Borrower and its Subsidiaries, and that there has been no Material Adverse Change or any condition or event that could reasonably be expected to result in a Material Adverse Change with respect to Borrower since the date of the most recently delivered financial statements.
(h) Certain Other Changes.
(i) No material changes in governmental regulations or policies affecting the Obligors, the Administrative Agent, the Lead Arranger or any Revolving Credit Lender involved in this transaction shall have occurred prior to the Closing Date.
(ii) There shall not have occurred prior to the Closing Date any disruption or material adverse change in the financial or capital markets in general that would, in the reasonable opinion of the Administrative Agent, have a material adverse effect on the market for loan syndications or adversely affect the syndication of the Revolving Credit Loans.
(i) No Action or Proceeding. There shall not exist any threatened or pending Proceeding by or before any Governmental Authority, (i) challenging the consummation of any of the Transactions or which would restrain, prevent or impose materially burdensome conditions on the Transactions, individually or in the aggregate, or any other transaction contemplated hereunder, (ii) seeking to prohibit the ownership or operation
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by Borrower or any Subsidiary of all or a material portion of any of their businesses or assets or (iii) seeking to obtain, or having resulted in the entry of, any judgment, order or injunction that (a) would restrain, prohibit or impose materially adverse conditions on the ability of the Revolving Credit Lenders to make the Loans under the Credit Documents, (b) could be reasonably expected to result in a Material Adverse Change with respect to Borrower (and before and after giving effect to the Transactions), (c) could reasonably be expected to affect the legality, validity or enforceability of any Credit Document or any documents relating thereto or could reasonably be expected to have a Material Adverse Effect, or (d) is seeking any material damages as a result thereof.
(j) Payment of Fees and Expenses. All accrued fees and expenses (including the reasonable fees and expenses of counsel to the Lead Arranger and the Administrative Agent) of the Lead Arranger and the Administrative Agent in connection with the Credit Documents shall have been paid.
(k) Filings and Lien Searches.
(i) The Administrative Agent shall have received results of searches or other evidence reasonably satisfactory to the Administrative Agent (in each case dated as of a date reasonably satisfactory to the Administrative Agent) indicating the absence of Liens, except for Permitted Liens, on the assets of the Obligors, except for which termination statements and releases reasonably satisfactory to the Administrative Agent are being tendered concurrently with the making of the first Revolving Credit Loan hereunder.
(ii) The Obligors shall have authorized, executed and delivered evidence of the completion of all filings with respect to the Security Agreement and delivery of such other documents as may be necessary or desirable, to perfect the Liens created, or purported to be created, by the Security Agreement.
(l) Conditions Relating to Mortgaged Real Property and Real Property. On or prior to the Closing Date, each Obligor to enter into a Mortgage shall have caused to be delivered to Administrative Agent, on behalf of the Revolving Credit Lenders, the following documents and instruments:
(i) a Mortgage encumbering each Mortgaged Real Property in favor of the Administrative Agent, for the benefit of the Revolving Credit Lenders, in form for recording in the recording office of each jurisdiction where each such Mortgaged Real Property is situated, together with such other documentation as shall be required to create a lien under applicable law, all of which shall be in form and substance reasonably satisfactory to the Administrative Agent, which Mortgage and other instruments shall be effective to create a Lien on such Mortgaged Real Property subject to no Liens other than Prior Liens (or Permitted Liens) applicable to such Mortgaged Real Property;
(ii) with respect to each Mortgaged Real Property, Borrower shall use its best efforts to obtain such consents, approvals, estoppels, tenant subordination agreements or other instruments as reasonably necessary or as reasonably required by the Administrative Agent to consummate the transactions contemplated hereby or to grant the Lien contemplated by the Mortgage; and
(iii) the following documents and instruments:
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(1) with respect to each Mortgage, a policy (or commitment to issue a policy) of title insurance insuring (or committing to insure) the Lien of such Mortgage as a valid Lien on the real property and fixtures described therein in an amount not less than the fair market value thereof which policy (or commitment) shall (a) be issued by the Title Company, (b) include such reinsurance arrangements, if any (with provisions for direct access), as shall be reasonably acceptable to the Administrative Agent, (c) have been supplemented by such endorsements, to the extent available, as shall be reasonably requested by the Administrative Agent, (d) such affidavits and instruments of indemnification as shall be reasonably required to induce the Title Company to issue the policy or policies (or commitment) and endorsements contemplated in this subparagraph (iii) and (e) contain no exceptions to title other than exceptions for (x) Liens of the type described in clauses (a), (b), (c), (d), (f), and (m) of the definition of Permitted Liens, (y) any Lien of the type described in clause (p) of the definition of Permitted Liens to the extent the original Lien is permitted hereunder and (z) the Prior Liens applicable to such Mortgaged Real Property;
(2) with respect to each Mortgaged Real Property, to the extent requested by the Administrative Agent, a Survey;
(3) with respect to each Mortgaged Real Property, policies or certificates of insurance as required by the Mortgage relating thereto;
(4) with respect to each Mortgaged Real Property, UCC, judgment and tax lien searches in the county and state jurisdictions in which such Mortgaged Real Property is located naming the applicable Obligor as debtor;
(5) evidence acceptable to the Administrative Agent of payment by Borrower of all title insurance premiums, search and examination charges, survey costs, mortgage recording taxes and related charges required for the recording of the Mortgages and issuance of the title insurance policies referred to in subclause (iii)(1) of this Section 7.1(l);
(6) with respect to each Mortgaged Real Property, an Officer’s Certificate or other evidence satisfactory to the Administrative Agent that as of the date thereof (a) other than the Real Property associated with the warehouse currently under construction at 00000 Xxxxxx Xxxx in Xxxxxx’x Branch, Texas, there has been issued and is in effect, to the extent required, a valid and proper certificate of occupancy or local or foreign equivalent for the use then being made of such Mortgaged Real Property, (b) there has not occurred any material Destruction of any Mortgaged Real Property that has not been restored and there is not pending any Taking of any Mortgaged Real Property and (c) to the best knowledge of Borrower, except as may be disclosed in the Survey of such Mortgaged Real Property delivered pursuant to subclause (iii)(2) of this Section 7.1(l), there are no disputes regarding boundary lines, location, encroachment or possession of such Mortgaged Real Property and no state of facts existing which could give rise to any such claim.
(m) No Default or Event of Default under the Credit Agreement. Immediately prior to the Closing Date (and after giving effect to the first Loans made hereunder), no Default or Event of Default shall have occurred and be continuing.
(n) Repayment of Existing Indebtedness. The Administrative Agent shall have received a payoff letter from the Borrower’s existing lenders, as well as a tender of releases and discharges of all collateral security for the Borrower’s existing credit facilities, each in form and substance satisfactory to the Administrative Agent. Such Indebtedness shall be repaid contemporaneously with the making of the first Loan hereunder.
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(o) Material Contracts. Prior and after giving effect to this Agreement, the Borrower and its Subsidiaries shall not be in default of any material contract to which any of them is a party.
(p) Insurance. The Borrower shall have delivered to the Administrative Agent certificates and other evidence of insurance (including, without limitation, insurance covering the Property), naming the Administrative Agent as mortgagee or additional insured, as applicable and otherwise in conformance with the terms of this Agreement and the other Credit Documents.
7.2 Initial and Subsequent Extensions of Credit Under This Agreement. The obligation of the Revolving Credit Lenders to make any Loan or otherwise extend any credit to Borrower upon the occasion of each borrowing or other extension of credit (whether by making a Loan or issuing a Letter of Credit) hereunder (including the initial borrowing) is subject to the further conditions precedent that:
(a) No Default or Event of Default; Representations and Warranties True; Borrowing Base Not Exceeded. Both immediately prior to the making of such Loan or other extension of credit and also after giving pro forma effect thereto and to the intended use thereof:
(i) no Default or Event of Default shall have occurred and be continuing. Without limiting the generality of the foregoing, after giving effect to such Loan or extension of credit, the Borrower shall not be in violation of Section 1008 of the Senior Subordinated Note Documents or Section 9.11(c) of this Agreement;
(ii) the representations and warranties made by the Obligors in Section 8, and by each Obligor in each of the other Credit Documents to which it is a party, shall be true and complete in all material respects on and as of the date of the making of such Loan or other extension of credit with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and
(iii) for each Loan and each Letter of Credit issuance, both the Borrowing Base (as determined upon the most recent Borrowing Base Certificate delivered hereunder) and the aggregate Revolving Credit Commitments, after giving effect to the requested Loan or Letter of Credit, shall exceed the sum of all Revolving Credit Loans then outstanding, plus the aggregate principal amount of Swing Loans then outstanding, plus the aggregate amount of all Letter of Credit Liabilities then outstanding.
(b) No Legal Bar. The Loans and the use of proceeds thereof shall not contravene, violate or conflict with, nor involve any Revolving Credit Lender in a violation of, any law, rule, injunction, or regulation or determination of any court of law or other Governmental Authority.
Each notice of borrowing or request for the issuance of a Letter of Credit by Borrower hereunder shall constitute a certification by Borrower to the effect set forth in clause (a) above (both as of the date of such notice or request and, unless Borrower otherwise notifies the Administrative Agent prior to the date of such borrowing or issuance, as of the date of such borrowing or issuance).
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Each notice submitted by Borrower hereunder for an extension of credit hereunder shall constitute a representation and warranty by Borrower, as of the date of such notice and as of the relevant borrowing date or date of issuance of a Letter of Credit, as applicable, that the applicable conditions in Sections 7.1 and 7.2 have been satisfied in accordance with the terms hereof.
Section 8. Representations and Warranties. Each Obligor represents and warrants to the Creditors that on the Closing Date and at and as of each Funding Date (in each case immediately before and immediately after giving effect to the transactions to occur on such date (including the Transactions)) and at and as of the date of each other extension of credit hereunder:
8.1 Corporate Existence. Each Obligor and each Subsidiary: (a) is a corporation, partnership or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) has all requisite corporate or other power and authority, and has all material governmental licenses, authorizations, consents and approvals necessary to own its Property and carry on its business as now being conducted; and (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure to be so qualified and in good standing would reasonably be expected to (either individually or in the aggregate) have a Material Adverse Effect.
8.2 Financial Condition; Etc.
(a) Borrower has heretofore delivered to the Revolving Credit Lenders (i) the audited consolidated balance sheets of Borrower and the Subsidiaries as of December 31, 2001 and the related statements of earnings, changes in stockholders’ equity and cash flows for the fiscal years ended on those dates, together with reports thereon by Xxxxxx Xxxxxxxx LLP, certified public accountants, and (ii) the unaudited consolidated balance sheets of Borrower and the Subsidiaries as of June 30, 2002, and the related statements of earnings and cash flows for the fiscal periods ended on June 30, 2002. All of said financial statements, including in each case the related schedules and notes, are true, complete (in the case of year-end financial statements) and correct in all material respects, have been prepared in accordance with GAAP consistently applied and present fairly the financial position of Borrower and the Subsidiaries as of the respective dates of said balance sheets and the results of their operations for the respective periods covered thereby, subject (in the case of interim statements) to period-end audit adjustments and the absence of footnotes.
(b) Except as set forth in Schedule 8.2, as of the Closing Date, no Obligor or any Subsidiary has any material contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or anticipated losses from any unfavorable commitments.
(c) Except as set forth in the financial statements referred to in Section 8.2(a), since June 30, 2002, there has been no Material Adverse Change, or any event, change or circumstance which could reasonably be expected to cause or evidence, either individually or together with any other events, changes or circumstances, a Material Adverse Change.
8.3 Litigation. Except as disclosed in Schedule 8.3, there are no Proceedings or investigations now pending or, to the knowledge of the Obligors, threatened against or directly affecting any Obligor or any Subsidiary or any of their respective Property that, if adversely
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determined could (either individually or in the aggregate) be reasonably expected to have a Material Adverse Effect.
(a) None of the execution, delivery and performance by each Obligor of any Credit Document or any Transaction Document to which it is a party and the consummation of the transactions herein and therein contemplated will (i) conflict with or result in a breach of, or require any consent (which has not been obtained and is in full force and effect) under, the charter or by-laws of any Obligor, or any applicable law or regulation, or any order, writ, injunction or decree of any Governmental Authority binding on any Obligor, or any term or provision of any agreement or instrument to which any Obligor or any of its Subsidiaries is a party or by which any of them or any of their Property is bound or to which any of them is subject (other than consents which may be required pursuant to the terms of any Lease), or (ii) constitute (with due notice or lapse of time or both) a default under any such agreement or instrument, or (iii) result in the creation or imposition of any Lien (except for the Liens created pursuant to the Security Documents) upon any Property of any Obligor or any of its Subsidiaries pursuant to the terms of any such agreement or instrument, except with respect to each of the foregoing which would not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect.
(b) No Obligor or any Subsidiary is in default under or with respect to any contractual obligation or any order, award or decree of any Governmental Authority or arbitrator binding upon it or any of its Property in any respect which would reasonably be expected to have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
8.5 Action. Each Obligor has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under each Credit Document and each Transaction Document to which it is a party and to consummate the transactions herein and therein contemplated; the execution, delivery and performance by each Obligor of each Credit Document and each Transaction Document to which it is a party and the consummation of the transactions herein and therein contemplated have been duly authorized by all necessary corporate action on its part; and this Agreement has been duly and validly executed and delivered by each Obligor and constitutes, and each of the Notes, the other Credit Documents and the Transaction Documents to which it is a party when executed and delivered by such Obligor (in the case of the Notes, for value) will constitute, its legal, valid and binding obligation, enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws of general applicability from time to time in effect affecting the enforcement of creditors’ rights and remedies and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
8.6 Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by any Obligor of the Credit Documents or Transaction Documents to which it is a party or for the legality, validity or enforceability hereof or thereof or for the consummation of the transactions herein and therein contemplated, except for filings and recordings in respect of the Liens created pursuant to the Security Documents.
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8.7 ERISA. Each member of the ERISA Group (x) has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and (y) is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Benefit Arrangement. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which failure or amendment has resulted or could reasonably be expected to result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Code, (iii) incurred any accumulated funding deficiency (whether or not waived) with respect to any Plan, (iv) any direct or indirect withdrawal liability with respect to any Multiemployer Plan, or any direct or indirect potential withdrawal liability if it were to withdraw from a Multiemployer Plan as of the date of determination or (v) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA or contributions in the normal course. The sum of the amount of unfunded benefit liabilities (within the meaning of Section 4001(a)(18) of ERISA) under all Plans (excluding each Plan with an amount of unfunded benefit liabilities of zero or less) is not more than $1.0 million. There are no actions, liens, suits or claims pending or threatened (other than routine claims for benefits) with respect to any Benefit Arrangement that could reasonably be expected to have a Material Adverse Effect. Borrower and each Subsidiary and any Foreign Plans are in compliance in all material respects with all applicable laws and regulations with respect to the Foreign Plans and the terms of the Foreign Plans, and all required contributions have been made to the Foreign Plans. For purposes hereof, the term “Foreign Plans” shall mean any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, Borrower or any Subsidiary with respect to employees employed outside the United States.
8.8 Taxes. Except as set forth in Schedule 8.8, each Obligor and each Subsidiary has filed or caused to be filed all U.S. federal income tax returns and all other material tax returns, domestic or foreign, required to be filed by it and has paid all material taxes payable by it which have become due or any assessments made against it or any of its Property and all other material taxes, fees or other charges imposed on it or any of its Property (including the Mortgaged Real Property) by any Governmental Authority (other than those which, in the aggregate, are not substantial in amount or those the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of each Obligor or the Subsidiaries, as the case may be); and no tax lien has been filed and, to the knowledge of the Obligors, no action, suit, proceeding, investigation, audit or claim is being asserted or has been threatened by any authority with respect to any such tax, fee or other charge, except where the existence of such would not (individually or in the aggregate) have a Material Adverse Effect. No Obligor or any Subsidiary has entered into an agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of any Obligor or any Subsidiary, except where the existence of such would not (individually or in the aggregate) have a Material Adverse Effect.
8.9 Investment Company Act; Public Utility Holding Company Act; Other Restrictions. No Obligor or any Subsidiary is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the United States Investment Company Act of 1940, as amended. No Obligor or any Subsidiary is a “holding company”, or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company”, within the meaning of the United States Public Utility Holding Company Act of 1935, as amended. No Obligor is subject to regulation under any law or regulation of any Governmental Authority (other than Regulation X of the Board of Governors of the Federal Reserve System) which limits its ability to incur Indebtedness.
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8.10 Senior Subordinated Notes. The subordination provisions contained in the Senior Subordinated Note Documents are enforceable against Borrower, each Subsidiary party thereto, and the subordinating creditors thereunder, and all Obligations are within the definition of “Senior Indebtedness” or “Guarantor Senior Indebtedness”, as the case may be, included in such subordination provisions.
8.11 Environmental Matters. Except as disclosed in Schedule 8.11 and except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect: (i) each Obligor and the Subsidiaries are in compliance with and in the last five years have been in compliance with, and are not subject to liability under, any Environmental Laws applicable to them and there are no Environmental Laws, including such Laws which have been formally proposed for public comment, which would reasonably be expected to result in material expenditures by any Obligor or any Subsidiary, and no such Environmental Laws would reasonably be expected to interfere in any material way with current or projected operations of any Obligor or any Subsidiary; (ii) no Obligor or any Subsidiary has received notice that it or any of their respective predecessors interests has been identified as a potentially responsible party under the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), or any similar law of any Governmental Authority, nor has any Obligor or any Subsidiary received notice that any Hazardous Materials that it or any of their respective predecessors in interest has used, generated, stored, treated, handled, transported or disposed of, or arranged for disposal or treatment of, have been found at any site at which any Person is conducting or plans to conduct any action pursuant to any Environmental Law, and no Obligor or any Subsidiary, or to the knowledge of the Obligors, any of their respective predecessors in interest, has disposed of, arranged for the disposal or treatment of, or otherwise released Hazardous Materials at any site at which any Person is conducting or plans to conduct any action under Environmental Law; (iii) no properties now or formerly owned, leased or operated by any Obligor or any Subsidiary or, to the knowledge of the Obligors, any of their respective predecessors in interest, are (x) listed or, to the knowledge of any Obligor or Subsidiary, at any Property proposed for listing on the National Priorities List under CERCLA or (y) listed on the Comprehensive Environmental Response, Compensation and Liability Information System List promulgated pursuant to CERCLA or (z) included on any similar lists maintained by any Governmental Authority; (iv) there are no past or present events, conditions, activities, practices or actions, or any agreements, judgments, decrees or orders by which any Obligor or any Subsidiary is bound, which would reasonably be expected to prevent any Obligor’s or any Subsidiary’s compliance with any Environmental Law, or which would reasonably be expected to give rise to any liability of any Obligor or any Subsidiary under any Environmental Law, including, without limitation, liability under CERCLA or similar state or foreign laws; (v) no Lien has been asserted or recorded, or to the knowledge of the Obligors, threatened, under any Environmental Law with respect to any asset, facility, inventory or property currently owned, leased or operated by any Obligor or any Subsidiary; (vi) there are no underground storage tanks or related piping at any Property owned, operated or, to the knowledge of any Obligor or Subsidiary, at any Property leased by any Obligor or any Subsidiary; (vii) to the knowledge of any Obligor or any Subsidiary no such tanks or related piping has been removed from such properties; and (viii) no Obligor or any Subsidiary is subject to any Proceeding alleging the violation of, or liability under, any Environmental Law and, to the knowledge of the Obligors, no such Proceeding is threatened.
8.12 Environmental Investigations. All material environmental investigations, studies, audits or assessments which have been conducted and which are in the possession, custody or control of any Obligor or any Subsidiary relating (i) to the current or prior business, operations, facilities or Properties of any Obligor or any Subsidiary or any of their respective predecessors in interest or (ii) to any facility or Property of any Obligor now or previously owned, operated, leased or used by any Obligor or any Subsidiary or any of their respective predecessors in
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interest have been made available to the Administrative Agent and the Revolving Credit Lenders.
8.13 Use of Proceeds. Neither Borrower nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock and no part of the proceeds of any extension of credit hereunder will be used to purchase or carry any Margin Stock. Borrower will use the proceeds of all Revolving Credit Loans to refinance existing senior indebtedness or for working capital and other uses permitted under this Agreement. Borrower may also use the proceeds of Revolving Credit Loans to (i) effect repurchases, redemptions or other acquisitions of Borrower’s Equity Interests made pursuant to and in compliance with Section 9.10(c) and (ii) repay existing Senior Subordinated Notes in accordance with the terms of Section 9.15.
8.14 Subsidiaries. As of the Closing Date (after giving effect to the Transactions), Borrower does not have any Subsidiaries or interests in partnerships, joint ventures or business trusts other than the entities set forth in Schedule 8.14. Borrower owns, as of the Closing Date, the percentage of the issued and outstanding Equity Interests or other evidences of the ownership of each Subsidiary, partnership or joint venture listed on Schedule 8.14 as set forth on such Schedule. Such Schedule 8.14 identifies each Restricted Subsidiary and each Unrestricted Subsidiary of the Borrower as of the Closing Date. No such Subsidiary, partnership or joint venture has issued any securities convertible into shares of its Equity Interests (or other evidence of ownership) or any Equity Rights to acquire such shares or securities convertible into such shares (or other evidence of ownership), and the outstanding stock and securities (or other evidence of ownership) of such Subsidiaries, partnerships or joint ventures are owned by Borrower and the Subsidiaries free and clear of all Liens and Equity Rights of others of any kind whatsoever, except for Liens pursuant to the Security Documents.
8.15 Properties. Except for Permitted Liens or as otherwise contemplated or provided in the Mortgage, the other Security Documents or this Agreement, each of the Obligors has good and marketable title to and beneficial ownership of all Properties owned by it, including all Property reflected in the most recent financial statements delivered pursuant to this Agreement (except as sold or otherwise disposed of since the date of such financial statements in the ordinary course of business and in accordance with this Agreement). Title to each such Property that is not Collateral is held by the Obligors and each of their respective Subsidiaries free and clear of all Liens except for Permitted Liens. Title to such Property that constitutes Collateral is held by the Obligors free and clear of all Liens other than Prior Liens and other Liens expressly permitted by the applicable Security Document.
8.16 Security Interest; Absence of Financing Statements. The Security Documents, once executed and delivered, will create, in favor of the Administrative Agent for the benefit of the Revolving Credit Lenders, as security for the obligations purported to be secured thereby, a valid and enforceable, and upon filing or recording with the appropriate Governmental Authorities or the taking of other appropriate action, depending upon the type of Collateral, perfected first priority security interest in and Lien upon all of the Collateral, superior to and prior to the rights of all third persons other than the holders of Prior Liens and subject to no other Liens except Prior Liens and other liens specifically permitted by the terms of the applicable Security Document.
Except with respect to Permitted Liens which are subordinate to the Liens of the Security Documents, Prior Liens and the Liens created by the Security Documents, there is no financing statement, security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any filing records, registry, or other public office, that purports to cover, affect or
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give notice of any present or possible future Lien on, or security interest in, any assets or Property of Borrower or any Subsidiary or rights thereunder.
8.17 Compliance with Laws. Each Obligor is in material compliance with all applicable statutes, laws, ordinances, rules, orders and regulations of any Governmental Authority in all jurisdictions in which it is presently doing business, and each Obligor will comply and cause each of its Subsidiaries to comply with all such laws and regulations which may be imposed in the future in jurisdictions in which it or such Subsidiary may then be doing business, in each case other than those the non-compliance with which would not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect. Additionally, there does not exist any judgment, order or injunction prohibiting or imposing material adverse conditions upon the Transactions, or the performance by any Obligor of its obligations under the Credit Documents, the Transaction Documents and all applicable laws.
8.18 True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of any of the Obligors to any Creditor in connection with the negotiation, preparation or delivery of this Agreement and the other Credit Documents or included herein or therein or delivered pursuant hereto or thereto, including pursuant to any information memorandum distributed in connection with the syndication of the Revolving Credit Commitments, whether prior to or after the Closing Date, when taken as a whole, do not, as of the date such information was furnished, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements herein or therein, in light of the circumstances under which they were made, not materially misleading. The projections and pro forma financial information furnished at any time by any Obligor to any Creditor pursuant to this Agreement have been prepared in good faith based on assumptions believed by Borrower to be reasonable at the time made, it being recognized by the Revolving Credit Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount and no Obligor, however, makes any representation as to the ability of Borrower or any Subsidiary to achieve the results set forth in any such projections. Borrower understands that all such statements, representations and warranties shall be deemed to have been relied upon by the Revolving Credit Lenders as a material inducement to make each extension of credit hereunder.
8.19 Solvency. As of the Closing Date and each other date of an extension of credit hereunder immediately prior to and immediately following such extension of credit each Obligor is and will be Solvent.
Section 9. Covenants. Each Obligor covenants and agrees with the Creditors that, so long as any Commitment, Loan or Letter of Credit Liability is outstanding and until payment in full of all amounts payable by Borrower hereunder:
9.1 Financial Statements, Etc. Borrower (for itself and on behalf of the Guarantors) shall deliver to the Administrative Agent in sufficient quantities to distribute to each of the Revolving Credit Lenders:
(a) Quarterly Financials. As soon as available and in any event within 45 days after the end of each of the first three quarterly fiscal periods of each fiscal year, consolidated and consolidating statements of income and cash flow of Borrower and its Consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated and consolidating balance sheet of Borrower and its Consolidated Subsidiaries as at the end of such period, setting forth in each case in comparative form (i) the corresponding
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consolidated and consolidating statements of income for the corresponding period in the preceding fiscal year and (ii) the corresponding budget or plan for such period, accompanied by a certificate of the chief financial officer of Borrower, which certificate shall state that said consolidated and consolidating financial statements fairly present the consolidated and consolidating financial condition and results of operations of Borrower and its Consolidated Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments and absence of footnotes);
(b) Annual Financials. As soon as available and in any event within 90 days after the end of each fiscal year, consolidated and consolidating statements of income, retained earnings and cash flow of Borrower and its Consolidated Subsidiaries for such year and the related consolidated and consolidating balance sheet of Borrower and its Consolidated Subsidiaries as at the end of such year, setting forth in each case in comparative form (i) the corresponding consolidated and consolidating figures as of the end of and for the preceding fiscal year and (ii) the corresponding budget or plan for such period, and accompanied by an opinion, without material qualification, thereon of independent certified public accountants of recognized national standing, which opinion shall state that said consolidated and consolidating financial statements fairly present the consolidated and consolidating financial condition and results of operations of Borrower and its Consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge of any Default; Borrower shall supply such additional information and detail as to any item or items contained on any such statement that Revolving Credit Lenders may reasonably require; all such information will be prepared in accordance with GAAP;
(c) Other Financial Information. Promptly upon delivery thereof to the shareholders of any Obligor or any Subsidiary (other than Wholly Owned Subsidiaries) generally, copies of all financial statements and reports and proxy statements so delivered which Borrower sends to all holders of securities of the same class and within five (5) days after the same are filed, copies of all financial statements and reports which Borrower may make to or file with any securities regulatory commission or the Securities and Exchange Commission or any successor or analogous Governmental Authority;
(d) Interest Rate Certificates. Together with the financial statements delivered pursuant to clause (a) or (b) of this Section 9.1, an Interest Rate Certificate;
(e) Notice of Default. Within two (2) Business Days after a Responsible Officer of Borrower or any Subsidiary knows or should have known that any Default has occurred, a notice of such Default describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that Borrower has taken and proposes to take with respect thereto;
(f) Environmental Matters. Written notice of any Environmental Claim received by the Borrower or any of its Subsidiaries materially affecting any Obligor or any Subsidiary, any Mortgaged Real Property or the operations of Borrower or any Subsidiary, and of any notice received by the Borrower or any of its Subsidiaries of (i) the occurrence of any release, spill or discharge of any Hazardous Material that is reportable under any Environmental Law or the commencement of any clean-up pursuant to or in accordance with any Environmental Law of any Hazardous Material at, on, under or within the Mortgaged Real Property or any part thereof, or any other condition, circumstance, occurrence or event, any of which could reasonably be expected to result
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in a material liability of Borrower or any Subsidiary under any Environmental Law; or (ii) any matters relating to Hazardous Materials or Environmental Laws that may impair, or threaten to impair, Revolving Credit Lenders’ security interest in the Mortgaged Real Property or any Obligor’s ability to perform any of its material obligations under this Agreement when such performance is due;
(g) Auditors’ Reports. Promptly upon receipt thereof, copies of all material reports submitted to Borrower by independent certified public accountants in connection with each annual, interim or special audit of the books of Borrower made by such accountants, including any management letter commenting on Borrower’s internal controls submitted by such accountants to management in connection with their annual audit, if the matters stated in such report are reasonably likely to have a Material Adverse Effect;
(h) Annual Budgets. An annual budget in reasonable detail and financial projections made in good faith, within 60 days after the end of each fiscal year of Borrower, commencing with the fiscal year ending December 31, 2002;
(i) Borrowing Base Audits. Periodically at the request of the Administrative Agent or the Majority Revolving Credit Lenders, a report, the scope and cost of which shall be reasonably acceptable to the Revolving Credit Lenders and Borrower (the reasonable cost and expense of which shall be for the sole account of Borrower), of an independent collateral auditor (which may be, or be affiliated with, one of the Revolving Credit Lenders) with respect to the Inventory included in the Borrowing Base as at the end of a monthly accounting period, which report shall indicate that, based upon a review by such auditors of the Inventory (including verification as to the value, location and respective types), the information set forth in the Borrowing Base Certificate delivered by Borrower as at the end of such accounting period is accurate and complete in all material respects;
(j) Borrowing Base Certificate.
(i) As soon as available and in any event no later than 12:00 noon on the third Business Day after the end of each week during the Overadvance Period until the Borrower terminates the Overadvance Period in accordance with the provisions of Section 2.5(c) hereof, a Borrowing Base Certificate as of the last day of the immediately preceding week; if Borrower fails to deliver any such Borrowing Base Certificate within three (3) Business Days after the end of any such week, then the Borrowing Base shall be deemed to be $0 until such time as Borrower shall deliver such required Borrowing Base Certificate;
(ii) As soon as available and in any event within 5 Business Days after the end of each monthly accounting period (ending on the last day of each calendar month) commencing with the first monthly accounting period after the termination of the Overadvance Period in accordance with the provisions of Section 2.5(c) hereof, a Borrowing Base Certificate as of the last day of such monthly accounting period; if Borrower fails to deliver any such Borrowing Base Certificate within 5 Business Days after the end of any such month, then the Borrowing Base shall be deemed to be $0 until such time as Borrower shall deliver such required Borrowing Base Certificate;
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(iii) Each Borrowing Base Certificate shall have attached to it such additional schedules and/or other information as the Administrative Agent may reasonably request;
(iv) Borrower shall notify the Administrative Agent promptly upon becoming aware of any event or condition that could reasonably be expected to have a Material Adverse Effect on the Borrowing Base;
(k) Lien Matters. Written notice of (i) the incurrence of any material Lien (other than Prior Liens) on, or claim asserted against any material item of the Collateral known to the Borrower or any of its Subsidiaries, or (ii) the occurrence of any other event known to the Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect on the aggregate value of the Collateral;
(l) Notice of Material Adverse Change. Written notice of any occurrence of any event or condition which has had or resulted in or is reasonably likely to have or result in a Material Adverse Change or a Material Adverse Effect;
(m) Governmental Filings. Promptly after request by the Administrative Agent or any Revolving Credit Lender, copies of any other material reports or documents that were filed by any Obligor with any Governmental Agency;
(n) ERISA Information. If and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect to any Plan which could reasonably be expected to constitute grounds for a termination of such Plan under Title IV of ERISA or other action by the PBGC with respect to the Plan, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal (or deemed withdrawal under Section 4092(e) of ERISA) from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which failure or amendment has resulted or could reasonably be expected to result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Code, an Officer’s Certificate setting forth details as to such occurrence and action, if any, which Borrower or the applicable member of the ERISA Group is required or proposes to take;
(o) Notice of Warehouse Lease Termination. Within two (2) Business Days after a Responsible Officer of Borrower or any Subsidiary knows or should have known that the lessor for any of the Borrower’s or its Subsidiaries’ warehouses intends to terminate, or has terminated, the Borrower’s or its Subsidiaries’ lease, a notice thereof describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that Borrower has taken and proposes to take with respect thereto; and
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(p) Miscellaneous. Promptly, such financial and other information regarding Borrower and the Subsidiaries as any Creditor may from time to time reasonably request.
Borrower will furnish to the Administrative Agent and each of the Revolving Credit Lenders, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate of a senior financial officer of Borrower in the form of Exhibit L hereto (i) to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail and describing the action that Borrower has taken and proposes to take with respect thereto) and (ii) setting forth in reasonable detail the computations necessary to determine whether Borrower is in compliance with Sections 9.7, 9.8, 9.9, 9.10 and 9.11 as of the end of the respective quarterly fiscal period or fiscal year.
9.2 Litigation, Etc. Borrower shall promptly give to the Administrative Agent and each Revolving Credit Lender notice of all Proceedings and any material development in respect of such Proceedings, affecting Borrower or any Subsidiary, except Proceedings which could not reasonably be expected to have (individually or in the aggregate) a Material Adverse Effect.
9.3 Existence; Compliance with Law; Payment of Taxes; Inspection Rights; Performance of Obligations; Etc. Each Obligor and each Subsidiary shall, (i) preserve and maintain its legal existence and all of its material rights, privileges and franchises, the loss of which could reasonably be expected to have a Material Adverse Effect (provided, however, that nothing in this Section 9.3 shall prohibit any transaction expressly permitted under Section 9.6); (ii) comply with the requirements of all applicable laws (including ERISA and the rules and regulations thereunder), rules, regulations and orders of Governmental Authorities if failure to comply with such requirements would (individually or in the aggregate) have a Material Adverse Effect; (iii) timely file true, accurate and complete tax returns required by all Governmental Authorities and pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto (except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained in accordance with GAAP) if such failure to file or pay and discharge would (individually or in the aggregate) have a Material Adverse Effect; (iv) maintain all of its Properties used or useful in its business in good working order and condition, ordinary wear and tear excepted, except to the extent that the failure to do so with respect to any such Property would not individually or in the aggregate be reasonably likely to have a Material Adverse Effect; (v) permit representatives of the Administrative Agent, during normal business hours, to examine, copy and make extracts from its books and records, to inspect its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by the Administrative Agent; (vi) permit representatives of the Administrative Agent to appraise any or all of the Collateral, at such intervals and by such appraisers as the Administrative Agent may reasonably request; (vii) perform in all material respects all of its obligations under the terms of each mortgage, indenture, security agreement, other debt instrument and material contract by which it is bound or to which it is a party, except where such failure to so perform, singly or in the aggregate with all other such failures, would not have a Material Adverse Effect; and (viii) keep proper books of record and accounts, in which full and correct entries shall be made of all financial transactions and the Property and business of each Obligor and its Subsidiaries in all material respects in accordance with GAAP in effect from time to time or in all material respects as otherwise required by applicable rules and regulations of any Governmental Authority having jurisdiction over such Obligor or its Subsidiaries, as relevant.
9.4 Insurance. Borrower and each Subsidiary shall keep insured by financially sound and reputable insurers all Property of a character usually insured by corporations engaged in the
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same or similar business similarly situated against loss or damage of the kinds and in the amounts customarily insured against by such corporations and carry such other insurance as is usually carried by such corporations, including, in any event, business interruption insurance or insurance of inventory at retail consistent with past practice and, if real property subject to a Mortgage in favor of the Administrative Agent and such real property is located in an area designated by the Secretary of Housing and Urban Development as a special flood hazard area, flood insurance in an amount not to exceed that available for one hundred percent (100%) reinsurance by the Federal Emergency Management Agency.
All policies of insurance required to be maintained by Borrower or any Subsidiary must name the Administrative Agent on behalf of Revolving Credit Lenders as mortgagees (in the case of property insurance) or additional insured (in the case of liability insurance), as applicable, and must provide that no cancellation or modification of the policies will be made without thirty (30) days’ prior written notice to the Administrative Agent.
Each policy of insurance obtained or maintained by Borrower or any Subsidiary shall: (i) be written by financially responsible companies selected by Borrower and having an A.M. Best rating of “A” or better and being in a financial size category of XII or larger, or by other companies reasonably acceptable to the Administrative Agent; (ii) waive all rights of subrogation of the insurers against the Creditors; (iii) waive any right of the insurers to set-off or counterclaim or to make any other deduction, whether by way of attachment or otherwise, as against any Creditor; (iv) waive all claims for insurance premiums or commissions or additional premiums or assessments against the Creditors; and (v) provide that, except in the case of third-party liability insurance, the proceeds of any loss affecting real or personal property or interests shall be applied in accordance with the terms of the applicable Security Document.
Borrower will advise the Administrative Agent promptly of any material policy cancellation, reduction or amendment.
Borrower will not and will not permit any Subsidiary to materially modify any of the provisions of any policy with respect to casualty insurance without delivering the original copy of the endorsement reflecting such modification to the Administrative Agent.
9.5 Limitation on Lines of Business. No Obligor or Subsidiary shall directly or indirectly, engage to any material extent in any line or lines of business activity other than the business of the type conducted by Borrower and the Subsidiaries as of the Closing Date.
9.6 Limitation on Fundamental Changes; Limitation on Acquisitions; Limitation on Dispositions. No Obligor or Subsidiary shall, directly or indirectly, (i) enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), (ii) acquire any business or Property from, or Equity Interests of, or be a party to any acquisition of, any Person, or effect any Acquisition, or (iii) effect any Disposition or convey, sell, lease, assign, transfer or otherwise dispose of, in one transaction or a series of transactions, all or a substantial part of its business or Property, whether now owned or hereafter acquired, including receivables and leasehold interests. Notwithstanding the foregoing provisions of this Section 9.6, each of the following shall be permitted:
(a) purchases of inventory and other Property to be sold or used in the ordinary course of business (including Capital Expenditures);
(b) the pledge of the Collateral pursuant to the Security Documents;
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(c) any Subsidiary may be merged or consolidated or dissolved or liquidated with or into: (i) Borrower if Borrower shall be the continuing or surviving corporation, (ii) any Wholly Owned Subsidiary which is an Obligor; provided, however, that a Wholly Owned Subsidiary which is an Obligor shall be the continuing or surviving corporation or (iii) if such Subsidiary effecting such transaction is not an Obligor, another Subsidiary which is not an Obligor;
(d) any Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its Property (upon voluntary liquidation or otherwise) to Borrower or to any Wholly Owned Subsidiary which is an Obligor or, if such Subsidiary effecting such transaction is not an Obligor, to another Subsidiary which is not an Obligor;
(e) Dispositions of used, worn out, obsolete or surplus Property by Borrower or any Subsidiary, all in the ordinary course of business, including the termination, sale or abandonment of leases for retail sites not favorable to Borrower, if in the ordinary course of business and on ordinary business terms;
(f) Borrower or any Subsidiary may sell or discount, in each case without recourse, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof and may sell for less than face value notes or accounts receivables in connection with trade discounts in the ordinary course of business or consistent with past practice;
(g) Borrower or any Subsidiary may effect any Disposition for fair market value not to exceed (i) $500,000 in the aggregate in any fiscal year of Borrower and (ii) in addition to that permitted by subclause (i) of this Section 9.6(g) (which shall not count against this subclause (ii)), $2.0 million in the aggregate from and after the Closing Date;
(h) Investments permitted by Section 9.9;
(i) any Wholly Owned Subsidiary that is a Foreign Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to another Wholly Owned Subsidiary that is a Foreign Subsidiary;
(j) any Foreign Subsidiary may be merged or consolidated with or into any one or more Wholly Owned Subsidiaries that are Foreign Subsidiaries (provided that a Wholly Owned Subsidiary that is a Foreign Subsidiary shall be the continuing or surviving corporation);
(k) the sale by any Foreign Subsidiary of its accounts receivable; provided, however, that the terms of each such sale are satisfactory in form and substance to the Administrative Agent;
(l) any Acquisition; provided, however, that (i) no Default or Event of Default exists or will result therefrom, (ii) on a pro forma basis, after giving effect to such Acquisition(s), Borrower would have been in compliance with Section 9.11 on the last day of the most recently completed fiscal quarter (assuming, for purposes of Section 9.11, that such Acquisition had occurred on the first day of the Measurement Period ending on such last day) as evidenced in an Officer’s Certificate delivered to the Administrative Agent and each Revolving Credit Lender at least 10 days prior to the consummation thereof (which shall have attached thereto reasonably detailed backup data and calculations showing such compliance), (iii) the aggregate amount of the consideration (which for each Acquisition shall be measured at the date of consummation
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thereof and which shall include Indebtedness and other liabilities incurred or assumed, working capital deficits and deferred payments) paid for all Acquisitions consummated since the Closing Date shall not exceed $5.0 million, and (iv) such Acquisition shall be effected through Borrower or a Wholly Owned Subsidiary which is an Obligor and (unless the Acquisition relates to the acquisition of assets) the Person acquired shall be merged with or into a Wholly Owned Subsidiary which is an Obligor or shall be at the time of consummation thereof a Wholly Owned Subsidiary which is an Obligor (it being understood that proceeds of Loans shall not be used to finance hostile acquisitions);
(m) the sale by the Borrower of Real Property; provided, however, that (i) the aggregate of the Net Available Proceeds and other consideration received therefrom do not exceed $7,500,000 in the aggregate from and after the Closing Date, and (ii) reasonably contemporaneously with such sale, the Net Available Proceeds therefrom are used to purchase or lease additional Real Property (and to the extent purchased, a Mortgage shall be granted to the Administrative Agent thereon to secure the Obligations); and
(n) any Acquisition the consideration for which is paid with the Net Available Proceeds of any Disposition permitted by Section 9.6(g) or (m) and to the extent such Net Available Proceeds have not been used to effect Capital Expenditures, any Acquisition permitted by this Section 9.6 or otherwise expended by Borrower or any Subsidiary; provided, however, that (i) no Default or Event of Default exists or would result therefrom, (ii) on a pro forma basis, immediately after giving effect to any such Acquisition, Borrower would be in compliance with all financial covenants set forth in Section 9.11 on the last day of the most recently ended fiscal quarter (assuming, for purposes of Section 9.11, that such Acquisition had occurred on the first day of the Measurement Period ending on such last day) as evidenced in an Officer’s Certificate delivered to the Revolving Credit Lenders at least 10 days prior to the consummation of such Acquisition (which shall have attached thereto reasonably detailed backup data and calculations showing such compliance), and (iii) such Acquisition shall be effected through Borrower or a Wholly Owned Subsidiary of Borrower which is an Obligor and the Person acquired shall be merged with or into a Wholly Owned Subsidiary which is an Obligor or shall be at the time of consummation thereof a Wholly Owned Subsidiary which is an Obligor.
To the extent the Majority Revolving Credit Lenders waive the provisions of this Section 9.6 with respect to the sale or other disposition of any Collateral, or any Collateral is sold or otherwise disposed of as permitted by this Section 9.6, such Collateral in each case shall be sold or otherwise disposed of free and clear of the Liens created by the Security Documents and the Administrative Agent shall take such actions as are appropriate in connection therewith.
9.7 Limitation on Liens and Related Matters. No Obligor or Subsidiary shall, directly or indirectly, create, incur, assume or suffer to exist any Lien upon or with respect to any Collateral except for Prior Liens and other Liens expressly permitted by the applicable Security Document. No Obligor or Subsidiary shall, directly or indirectly, create, incur, assume or suffer to exist any Lien upon or with respect to any of their respective Property that does not constitute Collateral, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets or assign any right to receive income, or file or permit the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute, except the following, which are herein collectively referred to as “Permitted Liens”:
(a) Liens in existence on the Closing Date and identified in Schedule 9.7;
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(b) Liens imposed by any Governmental Authority for taxes, assessments or charges not yet due or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of Borrower or the affected Subsidiary, as the case may be, in accordance with GAAP;
(c) Liens in respect of Property of Borrower or any Subsidiary (i) imposed by law, (ii) to the extent such Liens exist as of the Closing Date, imposed by contract, or (iii) to the extent such Liens are imposed by contract after the Closing Date (in which case Borrower shall use its best efforts to provide that any such Lien is created in a commercially reasonable amount and manner), in each case which were incurred in the ordinary course of business, such as carriers’, warehousemen’s, landlords’ and mechanics’ Liens and other similar Liens arising in the ordinary course of business, in each case for sums the payment of which is not delinquent or, if delinquent, is not then required by Section 9.3;
(d) pledges or deposits under worker’s compensation, unemployment insurance and other social security legislation or the deposits securing the liability to insurance carriers;
(e) pledges or deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions or minor defects or irregularities in title incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, easements, licenses, restrictions on the use of Real Property or minor imperfections in title thereto which, in the aggregate, are not material in amount, and which do not in any case materially detract from the value of the Real Property subject thereto or interfere with the ordinary conduct of the business of Borrower or any Subsidiary; and precautionary UCC filings by lessors and bailees in the ordinary course of business;
(g) Liens upon tangible personal Property acquired after the Closing Date by Borrower or any Subsidiary, each of which Liens either (i) existed on such Property before the time of its acquisition and was not created in anticipation thereof, or (ii) was created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost of such Property or improvements thereon; provided, however, that (x) no such Lien shall extend to or cover any Property of any Obligor or any Subsidiary other than the Property so acquired and improvements thereon and (y) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 100% of the fair market value of such Property at the time such Lien was created;
(h) Liens existing on any Property of any Person at the time such Person becomes a Subsidiary or is merged or consolidated with or into a Subsidiary and, in each case, not created in contemplation of or in connection with such event; provided, however, that such Liens do not extend to any other Property of any Obligor or any Subsidiary;
(i) Liens (excluding Liens on Collateral) not otherwise permitted hereunder securing obligations not at any time exceeding in the aggregate $1.0 million;
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(j) Liens securing obligations under Swap Contracts with any Revolving Credit Lender or any Affiliate of a Revolving Credit Lender so long as the Obligations are secured by the same collateral on a pari passu basis;
(k) Liens consisting of judgment or judicial attachment Liens (including prejudgment attachment) the enforcement of which is effectively stayed or payment of which is covered in full (subject to a customary deductible) by insurance or which do not otherwise result in an Event of Default under Section 10(h);
(l) Liens securing obligations in respect of Capital Leases solely on Property subject to such Capital Leases;
(m) Liens arising from filing UCC financing statements for precautionary purposes relating solely to true leases of personal property permitted by this Agreement under which Borrower or any of its Subsidiaries is a lessee;
(n) Liens encumbering customary initial deposits and margin deposits, and other Liens incurred in the ordinary course of business that are within the general parameters customary in the industry;
(o) Liens arising out of consignment or similar arrangements for the sale of goods entered into by the Borrower or any Subsidiary in the ordinary course of business in accordance with past practices;
(p) any extension, renewal or replacement of the foregoing; provided, however, that the Liens permitted under this subsection (p) shall not cover any additional Indebtedness or Property (other than like Property substituted for Property covered by such Lien);
(q) interests of lessors under leases and restrictions and encumbrances on the interests of such lessors;
(r) Liens in favor of banks which arise under Article IV of the UCC on items in collection and the documents relating thereto and proceeds thereof;
(s) Liens in favor of customs and revenue authorities arising as a matter of law to secure customs duties in connection with the importation of goods; and
(t) interests of licensors of patents, trademarks and other intellectual property.
Except with respect to (i) specific Property encumbered pursuant to a Lien permitted to be incurred pursuant to this Section 9.7 or (ii) specific Property to be sold pursuant to an executed agreement with respect to a Disposition consummated in accordance with this Agreement, no Obligor will, nor will any of them permit any of their respective Subsidiaries to, directly or indirectly, enter into any agreement after the Closing Date (other than the Credit Documents) prohibiting or restricting in any manner (directly or indirectly and including by way of covenant, representation or warranty or event of default) the creation or assumption of any Lien upon its Property, whether now owned or hereafter acquired except for customary restrictions on the creation of Liens contained in leases and licenses affecting the Property leased or licensed thereunder.
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9.8 Limitation on Indebtedness. No Obligor or Subsidiary shall, directly or indirectly, create, incur or suffer to exist or be or become liable for any Indebtedness, except (each of which shall be given independent effect):
(a) Indebtedness under the Credit Documents;
(b) Indebtedness outstanding on the Closing Date and listed in Schedule 9.8 and specified on Schedule 9.8 as to remain outstanding after the Closing Date;
(c) Indebtedness of Borrower or any Wholly Owned Subsidiary owing to Borrower or any Wholly Owned Subsidiary which is an Obligor; provided, however, that (i) if requested by the Majority Revolving Credit Lenders, such Indebtedness shall be evidenced by an Intercompany Note which shall be pledged to the Administrative Agent on behalf of the Revolving Credit Lenders pursuant to the Security Agreement and (ii) such Indebtedness shall not be held by any Person other than Borrower or a Wholly Owned Subsidiary which is an Obligor and shall not be subordinate to any other Indebtedness or other obligation of the obligor other than the Loans and the Senior Subordinated Notes;
(d) Indebtedness of Borrower and the Subsidiaries secured by Liens permitted under Section 9.7(g) or (l) not exceeding in the aggregate $2.0 million at any one time outstanding;
(e) Indebtedness of Borrower represented by the Senior Subordinated Notes in an aggregate principal amount of $69 million less any prepayments or repayments thereof on and after the Closing Date and any senior subordinated guarantees thereof by Guarantors in accordance with the terms of the Senior Subordinated Note documents as in effect on the Closing Date;
(f) unsecured subordinated Indebtedness of Borrower in an amount not to exceed $10 million at any time outstanding; provided, however, that (i) the maturity of any principal payments thereunder shall be no earlier than one year after the Revolving Credit Commitment Termination Date and such Indebtedness shall not require by its terms any prepayments of any principal amount thereunder prior to one year after the Revolving Credit Commitment Termination Date, (ii) such Indebtedness is subordinated to the Obligations substantially on the terms set forth in Exhibit J, (iii) no Default or Event of Default shall exist at the time of issuance of such Indebtedness or would arise therefrom, (iv) such Indebtedness shall not provide for any payment of interest in cash so long as any Loans or Reimbursement Obligations are then outstanding, or any Commitment to make extensions of Credit is then in existence remain outstanding or any Revolving Credit Commitments remain in effect hereunder, and (v) the terms and provisions thereof (including covenants, interest rate, defaults, prepayment terms and maturities) shall be acceptable to the Administrative Agent in its sole discretion;
(g) unsecured Indebtedness incurred by any Foreign Subsidiary not to exceed $1.0 million in the aggregate at any time outstanding;
(h) Indebtedness arising from honoring a check, draft or similar instrument against insufficient funds; provided, however, that such Indebtedness is extinguished within two Business Days of its incurrence;
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(i) unsecured Indebtedness of Borrower or any Subsidiary which is an Obligor incurred in the ordinary course of business in an aggregate principal amount not to exceed $5.0 million at any time outstanding;
(j) Indebtedness represented by amounts declared, payable as, or set apart for, Dividend Payments permitted by Section 9.10;
(k) Swap Contracts entered into in the ordinary course of business and designed to protect the Obligors against fluctuations in interest rates, currency exchange rates, commodity prices or similar risks;
(l) any renewals, extensions, substitutions, refinancings or replacements (each, for purposes of this subsection (l), a “Refinancing”) of any Indebtedness permitted by clauses (b), (d), (e), (f), (g), (i), or (p) of this Section 9.8, including any successive Refinancings; provided, however, that (i) no Default or Event of Default shall have occurred and be continuing or would arise therefrom, (ii) any such Refinancing of Indebtedness shall (w) not be on financial and other terms, in the reasonable judgment of Administrative Agent, that are more onerous than the Indebtedness being refinanced, (x) not have a stated maturity or weighted average life that is shorter than the Indebtedness being refinanced, (y) be at least as subordinate to the Obligations as the Indebtedness being refinanced (and unsecured if the refinanced Indebtedness is unsecured), and (z) be in principal amount that does not exceed the principal amount so refinanced, plus the lesser of (1) the stated amount of any premium or other payment required to be paid in connection with such Refinancing pursuant to the terms of the Indebtedness being refinanced and (2) the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of reasonable expenses of Borrower or any Subsidiary incurred in connection with such Refinancing, (iii) the obligor on such Refinancing Indebtedness shall be Borrower or the original obligor on such Indebtedness being refinanced (with any guarantor on the Indebtedness being refinanced permitted to guarantee the Refinancing Indebtedness and Borrower likewise permitted to guarantee such Refinancing Indebtedness of Guarantors), and (iv) the incurrence of such Refinancing Indebtedness shall not increase the overall Indebtedness of Borrower and the Subsidiaries;
(m) the guarantee of the Obligations pursuant to Section 6 and guarantees by Guarantors of the Senior Subordinated Notes pursuant to the Senior Subordinated Note documents as in effect on the Closing Date;
(n) Contingent Obligations of Borrower or any Subsidiary in respect of Indebtedness or other liabilities of Borrower or any Wholly Owned Subsidiary which is an Obligor to the extent that the existence of such Indebtedness or other liabilities is not prohibited under this Agreement;
(o) Contingent Obligations in connection with Dispositions permitted under Section 9.6, arising in connection with indemnification and other agreements in respect of any contract relating to such Disposition, not to exceed the consideration received by Borrower or any Subsidiary in connection with such sale and excluding in all cases any Contingent Obligation with respect to any obligation of any third person incurred in connection with the acquisition of the Property which is the subject of such Disposition; and
(p) Acquired Indebtedness not to exceed $5.0 million in the aggregate.
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All intercompany debt shall be unsecured and subordinate in right of payment to the Obligations.
No Obligor shall directly or indirectly make any optional prepayment, redemption, retirement or defeasance, whether in cash, property, securities or a combination thereof, on account of the principal amount of any Indebtedness, other than (1) Refinancings permitted by Section 9.8(l), (2) the Loans, and (3) repurchases, redemptions or other acquisitions of the Senior Subordinated Notes permitted by Section 9.15.
9.9 Limitation on Investments; Limitation on Creation of Subsidiaries. No Obligor or Subsidiary shall, directly or indirectly, make or permit to remain outstanding any Investments, except:
(a) operating deposit accounts and certificates of deposit with banks in the ordinary course of business;
(b) Permitted Investments;
(c) Investments by Borrower or any Subsidiary in any Wholly Owned Subsidiary that is an Obligor and Investments by any Subsidiary in Borrower;
(d) Investments outstanding on the Closing Date and identified with particularity in Schedule 9.9 and any renewals, extensions, modifications and replacements thereof that do not increase the amount thereof;
(e) Investments that constitute Indebtedness permitted under Section 9.8;
(f) Investments by Borrower in Swap Contracts entered into as bona fide xxxxxx and not for speculative purposes;
(g) advances, loans or extensions of credit by Borrower or any Subsidiary to employees of Borrower or any Subsidiary; provided, however, that the aggregate amount of all such loans, advances and extensions of credit shall not at any time exceed in the aggregate $3.0 million (without giving effect to any write-down or write-off thereof) and, provided, further, that no Investment shall be made pursuant to this clause (g) if any Event of Default exists;
(h) extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business;
(i) pledges or deposits required in the ordinary course of business in connection with workmen’s compensation, unemployment insurance and other social security or similar legislation;
(j) pledges or deposits in connection with (i) the non-delinquent performance of bids, trade contracts (other than for borrowed money), leases or statutory obligations, (ii) contingent obligations on surety or appeal bonds, and (iii) other non-delinquent obligations of a like nature, in each case incurred in the ordinary course of business;
(k) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent
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obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;
(l) Borrower and the Subsidiaries may hold additional Investments in any non-Wholly Owned Subsidiary or Foreign Subsidiary to the extent that such Investments reflect an increase in the stockholders’ equity of such Subsidiary resulting from retained earnings of such Subsidiary;
(m) any Foreign Subsidiary may make Investments in or to any other Foreign Subsidiary;
(n) Capital Expenditures;
(o) Investments by Borrower or any Subsidiary in any non-Wholly Owned Subsidiary or any Subsidiary which is not an Obligor to the extent made in the ordinary course to fund or support the ordinary course operations of such Subsidiary so long as no Event of Default shall have occurred and be continuing; provided, however, that (i) the amount of such Investments made pursuant to this clause (o) shall not exceed $1.0 million in the aggregate outstanding at any time (without giving effect to any write-down or write-off thereof) and (ii) upon the request of the Majority Revolving Credit Lenders all such Investments evidenced by Intercompany Notes shall be pledged to the Administrative Agent pursuant to the Security Agreement and provided, further that no Investment shall be made pursuant to this clause (o) if any Event of Default exists immediately prior to or after the making of such Investment;
(p) Investments for the creation of any Wholly Owned Foreign Subsidiary which is a foreign sales corporation consisting of de minimis capitalization;
(q) Borrower or any Subsidiary may hold the Equity Interests, partnership interests or other ownership or equity interest therein of any Subsidiary existing on the Closing Date or created or acquired thereafter in accordance with the provisions hereof and any additional Equity Interests, partnership interests or ownership or equity interests issued in exchange therefor or as a dividend thereon;
(r) Investments consisting of non-cash consideration received in the form of securities, notes or similar obligations in connection with a Disposition permitted by Section 9.6(g); provided, however, that (i) the aggregate amount of such non-cash consideration received in connection with any such Disposition shall not exceed 15% of the total consideration received in connection with such Disposition and (ii) such non-cash consideration is pledged pursuant to the appropriate Security Document;
(s) Investments by or through Borrower or any Wholly Owned Subsidiary which is an Obligor made in order to consummate Acquisitions effected in accordance with Section 9.6(l), or (n); provided, however, that no Default or Event of Default exists or will result therefrom;
(t) Investments by Foreign Subsidiaries in high quality investments of the type similar to Permitted Investments made outside the United States;
(u) Investments made by or through Borrower or any Wholly Owned Subsidiary which is an Obligor with the Net Available Proceeds of any Disposition effected in accordance with Section 9.6(g) or (n), to the extent such Net Available Proceeds have not been used to effect Capital Expenditures, any Acquisition permitted by
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Section 9.6 or otherwise expended by Borrower or any Subsidiary; provided, however, that (i) no Default or Event of Default exists or would result therefrom, and (ii) such Investment shall be effected through Borrower or a Wholly Owned Subsidiary which is an Obligor and, if an Acquisition, shall comply with Section 9.6; and
(v) in addition to the foregoing, other Investments not exceeding $5.0 million in the aggregate outstanding at any time (without giving effect to any write-downs or write-offs thereof), net of any returns of capital, cash dividends and distributions received in respect thereof and net cash proceeds of sales thereof and; provided, however, that no Investment shall be made pursuant to this clause (w) if any Event of Default exists.
No Obligor shall, nor shall any of them permit any Subsidiary to, directly or indirectly, create or acquire any Subsidiary without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, provided, however, that the provisions of this Section 9.9 shall not require the Administrative Agent’s consent for the creation or acquisition of wholly-owned direct and indirect Subsidiaries of Borrower so long as, with respect to any such acquisition, it complies with the provisions of Section 9.6.
9.10 Limitation on Dividend Payments. No Obligor or Subsidiary shall, directly or indirectly, declare or make any Dividend Payment at any time, except that:
(a) any Subsidiary may declare and make Dividend Payments to the extent made pro rata to all holders of the Equity Interests thereof;
(b) so long as no Default or Event of Default then exists or would arise therefrom, Borrower may repurchase, redeem or otherwise acquire or retire for value shares of Equity Interests or Equity Rights of Borrower from employees who have died (or their estates or beneficiaries) or whose employment has terminated; provided, however, that such payment shall not exceed $1.5 million in any fiscal year; and
(c) so long as no Default or Event of Default then exists or would arise therefrom, Borrower may make repurchases, redemptions or other acquisitions of its Equity Interests; provided, however, that, after giving pro forma effect to each such repurchase, redemption or other acquisition:
(i) the amount of all such repurchases, redemptions or other acquisitions shall not exceed, in the aggregate, $25.0 million since the Closing Date;
(ii) Borrower shall be in compliance with all covenants and agreements set forth herein (including Section 9.11); and
(iii) within two Business Days of each such repurchase, redemption or other acquisition, Borrower shall deliver to the Administrative Agent an Officers’ Certificate stating compliance with this Section 9.10(c).
9.11 Financial Covenants.
(a) Maximum Leverage Ratio. Borrower shall not permit the Leverage Ratio at any date set forth in the table below to exceed the ratio set forth opposite such date in the table below:
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|
Date |
|
Ratio |
|
|
|
|
|
Closing Date
through |
|
2.50: 1.00 |
|
|
|
|
|
December 31, 2002 |
|
1.75: 1.00 |
|
|
|
|
|
March 31, 2003 |
|
1.75: 1.00 |
|
|
|
|
|
June 30, 2003 |
|
1.75: 1.00 |
|
|
|
|
|
September 30, 2003 |
|
2.00: 1.00 |
|
|
|
|
|
December 31, 2003 and each March 31, June 30, September 30 and December 31 thereafter |
|
1.50: 1.00 |
(b) Minimum Fixed Charge Coverage Ratio. Borrower shall not permit the ratio of (x) Consolidated EBITDA plus Consolidated Rental Expense less Capital Expenditures for any Measurement Period on or after the Closing Date to (y) Fixed Charges for such Measurement Period on or after the Closing Date at the end of any fiscal quarter to be less than 1.50:1.00.
(c) Minimum Interest Coverage Ratio. Borrower shall not permit the Consolidated Minimum Interest Coverage Ratio for the four full fiscal quarters taken as one period (and after giving pro forma effect to (A) the incurrence of any Indebtedness (including, without limitation, the Loans) and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred, and the application of such proceeds occurred, on the first day of such four quarter period, (B) the incurrence, repayment, or retirement of any other Indebtedness of the Borrower and its Restricted Subsidiaries since the first day of such four quarter period (except that in making such computation, the amount of Loans and Letter of Credit Liabilities shall be computed based upon the average daily balance of such Loans and Letter of Credit Liabilities during such four quarter period), and (C) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Borrower or its Restricted Subsidiaries, as the case may be, since the first day of such four quarter period, as if such acquisition or disposition occurred on the first day of such four quarter period) to be less than 2.00:1.00.
(d) Minimum Tangible Net Worth. Borrower shall not permit its Consolidated Tangible Net Worth to be less than the sum of (1) $27,000,000, plus (ii) fifty percent (50%) of the cumulative consolidated net income (but in no event less than zero) of the Borrower and its Consolidated Subsidiaries calculate on a consolidated basis in accordance with GAAP from and after July 1, 2002, plus (iii) seventy-five percent (75%) of the Net Available Proceeds of any Equity Issuance from and after July 1, 2002.
(e) Measuring Dates. The covenants in clauses (a), (b), (c) and (d) of this Section 9.11 shall be measured as of the Closing Date and the end of each fiscal quarter thereafter and will apply to Borrower and the Subsidiaries (or Restricted Subsidiaries, as applicable) on a consolidated basis; in addition, the covenant set forth in clause (c) of this Section 9.11 shall be measured as of each date that the Borrower requests a Loan or the issuance of a Letter of Credit.
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9.12 Pledge of Additional Collateral. Promptly, and in any event within 30 days, after the acquisition of any Property of the type that would have constituted Collateral at the Closing Date (including the Equity Interests of any Subsidiary hereafter created or acquired) other than Real Property (the “Additional Collateral”), each Obligor and each Wholly Owned Subsidiary (other than any Foreign Subsidiary) shall take all action reasonably necessary or desirable, including the execution and delivery of all such agreements, assignments, documents and instruments (including amendments to the Credit Documents) and the filing of appropriate financing statements under the provisions of the UCC or applicable governmental requirements in each of the offices where such filing is necessary or appropriate, to grant the Administrative Agent for the benefit of the Revolving Credit Lenders a duly perfected first priority Lien (subject to Prior Liens) on such Property pursuant to and to the full extent required by the Security Documents and this Agreement; provided, however, that not more than 65% of the Equity Interests of any “first tier” Foreign Subsidiary need be pledged and no Equity Interests of any Foreign Subsidiary which is not a “first-tier” Foreign Subsidiary need be pledged.
In the event that, after the Closing Date, Borrower or any Domestic Subsidiary acquires or holds a fee interest in any Real Property with a market or book value of $3.5 million or more, the Obligors and each Wholly Owned Subsidiary shall reasonably promptly (i) take such actions and execute such documents as the Administrative Agent shall reasonably require to confirm the Lien of an existing Mortgage, if applicable, or to create a new Mortgage on such additional Real Property and (ii) cause to be delivered to the Administrative Agent, on behalf of the Revolving Credit Lenders, the documents and instruments reasonably requested by the Administrative Agent, including, without limitation, the items set forth in Section 7.1 in respect of Mortgaged Real Property.
The costs of all actions taken by the parties in connection with the pledge of Additional Collateral or in connection with any Mortgage, including reasonable costs of counsel for the Administrative Agent, shall be paid by the Obligors promptly following written demand.
9.13 Security Interests.
(a) Each Obligor and each Subsidiary authorizes the Administrative Agent, at Borrower’s expense, to execute, acknowledge and deliver, or cause the execution, acknowledgment and delivery of, and thereafter register, file or record, or cause to be registered, filed or recorded, in an appropriate governmental office, financing statements and any other document or instrument supplemental to or confirmatory of the Security Documents or otherwise deemed by the Administrative Agent reasonably necessary or desirable for the continued validity, perfection and priority of the Liens on the Collateral covered thereby.
(b) Each Obligor and each Subsidiary shall deliver or cause to be delivered to the Administrative Agent from time to time such other documentation, consents, authorizations, approvals and orders in form and substance reasonably satisfactory to the Administrative Agent as the Administrative Agent shall reasonably deem necessary to perfect or maintain the Liens on the Collateral.
9.14 Compliance with Environmental Laws. (a) Each Obligor and each Subsidiary shall comply with all Environmental Laws, and will keep or cause all Real Property to be kept free of any Liens under Environmental Laws, unless failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (b) in the event of the presence of any Hazardous Material at, on, under or emanating from any Real Property which would reasonably be expected to result in liability under or a violation of any Environmental Law, in each case which would, either individually or in the aggregate,
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reasonably be expected to have a Material Adverse Effect, each Obligor and each Subsidiary shall undertake, and/or cause any of their respective tenants or occupants to undertake, at their sole expense, any action required pursuant to Environmental Laws to mitigate and eliminate any such adverse effect; provided, however, that no Obligor or Subsidiary shall be required to comply with any order or directive which is being contested in good faith and by proper proceedings so long as it has maintained adequate reserves with respect to such compliance to the extent required in accordance with GAAP; (c) each Obligor shall promptly notify the Administrative Agent of the occurrence of any event specified in clause (b) of this Section 9.14 and shall periodically thereafter keep the Administrative Agent informed of any material actions taken in response to such event and the results of such actions; and (d) at the written request of the Administrative Agent, each Obligor will provide, at such Obligor’s sole cost and expense, an environmental site assessment (including, without limitation, the results of any subsurface testing, conducted if the Administrative Agent directs that such testing be conducted) concerning any Real Property now or hereafter owned, leased or operated by such Obligor or any Subsidiary, conducted by an environmental consulting firm proposed by such Obligor and reasonably acceptable to the Administrative Agent indicating the presence or absence of Hazardous Materials and the potential cost of any required investigation or other response or any corrective action in connection with any Hazardous Materials on, at, under or emanating from such Real Property; provided, however, that such request may be made only if (i) there has occurred and is continuing an Event of Default, or (ii) the Administrative Agent reasonably believes that such Obligor or any Subsidiary or any such Real Property is not in material compliance with Environmental Law which could reasonably be expected to have a Material Adverse Effect, or (iii) circumstances exist that reasonably could be expected to form the basis of an Environmental Claim against such Obligor, any Subsidiary or any such Real Property which could reasonably be expected to have a Material Adverse Effect. If any Obligor fails to provide the same within 60 days after such request was made, the Administrative Agent may but is under no obligation to order the same, and each Obligor shall grant and hereby grants to the Administrative Agent and its agents access to such Real Property and specifically grants the Administrative Agent an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment, all at such Obligor’s sole cost and expense.
9.15 Limitation on Prepayments of Senior Subordinated Notes, Etc. Borrower shall not, and shall not cause or permit any Subsidiary to make (or give any notice in respect of) any voluntary or optional payment or prepayment or redemption or acquisition for value of the Senior Subordinated Notes (including, without limitation, by way of depositing with any trustee with respect thereto money or securities before such Indebtedness is due for the purpose of paying such Indebtedness when due); provided, that so long as no Default or Event of Default then exists or would arise therefrom, Borrower may make purchases, redemptions, or other acquisitions of its Senior Subordinated Notes at any time after January 1, 2003 (but not prior thereto); provided further, that, after giving pro forma effect to each such repurchase, redemption, or other acquisition:
(a) Excess Availability after giving effect to such payment and on a pro forma basis for the following twelve months shall be no less than $20,000,000 ;
(b) Borrower’s most recent annual audited financial statements demonstrate that the Borrower’s Leverage Ratio is at least 0.25 less than the then applicable Leverage Ratio set forth in Section 9.11(a) of this Agreement. For purposes of clarity, if the required Leverage Ratio under Section 9.11(a) was 2.0:1.0, in order to make payments hereunder, the Borrower’s then Leverage Ratio would be required to be 1.75:1.00 or less;
(c) Borrower shall be in compliance with all covenants and agreements set forth herein (including Section 9.11); and
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(d) within two Business Days of each such repurchase, redemption or other acquisition, Borrower shall deliver to the Administrative Agent an Officer’s Certificate stating compliance with this Section 9.15.
9.16 Limitation on Transactions with Affiliates. No Obligor or Subsidiary shall, directly or indirectly: enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any Property, the rendering of any service, or a merger or consolidation), with any Affiliate (an “Affiliate Transaction”) unless such Affiliate Transaction is otherwise not prohibited under this Agreement, is in the ordinary course of the Obligor’s business and is on fair and reasonable terms that are not less favorable to the Obligor than those that would be obtainable at the time in an arm’s-length transaction with a Person who is not such an Affiliate; provided, however, that so long as no Default or Event of Default shall have occurred and be continuing, the following shall be permitted: (a) Dividend Payments permitted by Section 9.10; (b) the payment of reasonable and customary regular fees to directors of Borrower or any Subsidiary who are not employees of Borrower or any Subsidiary; (c) any transaction with an officer or member of the board of directors of Borrower or any Subsidiary in the ordinary course of business involving compensation, indemnity or employee benefit arrangements; (d) loans or advances to employees permitted by Section 9.9; (e) transactions and agreements in existence on the Closing Date and listed and described with particularity in Schedule 9.16 (the “Existing Affiliate Agreements”) and the transactions contemplated by each of the Existing Affiliate Agreements; (f) payments made pursuant to management agreements with Madison Dearborn not to exceed $500,000 for each fiscal year of Borrower; (g) employment agreements and arrangements (including, without limitation, benefits) approved by the board of directors of Borrower; (h) any employee benefit plan available to employees of Borrower generally; (i) transactions with Obligors; and (j) transactions in the ordinary course of business with Subsidiaries and other transactions with Subsidiaries not prohibited hereunder.
9.17 Limitation on Accounting Changes; Limitation on Investment Company Status. No Obligor or Subsidiary shall make or permit, any change in (i) accounting policies or reporting practices, except immaterial changes and except as required by generally accepted accounting principles or (ii) its fiscal year end (December 31 of each year); provided, however, that the Obligors and Subsidiaries may change their fiscal year end to a retail calendar year end as long as the Administrative Agent and the Borrower have theretofore agreed upon a modification and adjustment of the financial performance covenants set forth in Section 9.11 hereof to reflect the change of such fiscal year. No Obligor shall be or become an investment company subject to the registration requirements under the United States Investment Company Act of 1940, as amended.
9.18 Limitation on Modifications of Certain Documents, Etc. No Obligor or Subsidiary shall, directly or indirectly, consent to any modification, supplement or waiver of, or amend or modify, any of the provisions of (i) any term or provision of the subordination provisions of any Indebtedness incurred pursuant to Section 9.8(f), (ii) any Senior Subordinated Note Document or (iii) in any manner which could reasonably be expected to be materially adverse to the Revolving Credit Lenders, its certificate of incorporation or its by-laws (or any other organizational document), or any agreement entered into with respect to its Equity Interests.
9.19 Limitation on Certain Restrictions Affecting Subsidiaries. No Obligor or Subsidiary shall, directly or indirectly, create or otherwise cause or suffer to exist or become effective any direct or indirect encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on such Subsidiary’s Equity Interests or any other interest or participation in its profits owned by Borrower or any Subsidiary, or pay any
82
Indebtedness or any other obligation owed to Borrower or any Subsidiary, (b) make Investments in or to Borrower or any Subsidiary, or (c) transfer any of its Property to Borrower or any Subsidiary, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) the Credit Documents, (iii) the Senior Subordinated Note Documents as in effect on the Closing Date, (iv) such restrictions with respect to the transfer of those assets subject to a Lien permitted under Section 9.7, (v) customary provisions restricting subletting or assignment of any lease governing a leasehold interest or license of Borrower or any Subsidiary, (vi) with respect to restrictions described in clause (c) only, restrictions in any agreement relating to any Disposition which is permitted under this Agreement, and (vii) Acquired Indebtedness; provided, however, that with regard to this clause (vii), (1) such restriction applies solely to the Person acquired or to a newly formed Wholly Owned Subsidiary with only de minimis assets formed expressly to make the acquisition in question and (if such Acquisition is of Equity Interests) the Person acquired does not merge at any time while such restriction is in effect with or into Borrower or any Subsidiary of Borrower other than any such newly formed Wholly Owned Subsidiary and (2) such Person acquired or such newly formed Subsidiary shall be a Guarantor.
9.20 Additional Obligors. Promptly, but in any event within 30 days of Borrower or any Subsidiary creating or acquiring a Wholly Owned Subsidiary (other than a Foreign Subsidiary) after the Closing Date (each such Subsidiary referred to herein as an “Additional Obligor” and collectively as the “Additional Obligors”), Borrower shall cause each such Subsidiary to execute and deliver all such agreements, guarantees, documents and certificates (including any amendments to the Credit Documents and a Joinder Agreement substantially in the form of Exhibit K) as the Administrative Agent may reasonably request and do such other acts and things as the Administrative Agent may reasonably request in order to have such Subsidiary guarantee the Obligations in accordance with the terms of the Credit Documents.
9.21 Limitation on Designated Senior Indebtedness. Borrower will not and will not permit any Subsidiary to, designate or permit the designation of any Indebtedness (other than the Obligations) as “Designated Senior Indebtedness” or “Designated Guarantor Senior Indebtedness” for purposes of, and as defined in, the Senior Subordinated Notes Documents.
9.22 Limitation on Change of Principal Place of Business or Corporate Name. Each Obligor shall not change its principal place of business or its corporate name unless it shall have (a) given the Administrative Agent at least thirty days’ advance written notice of such change, and (b) filed in all necessary jurisdictions such documents as may be necessary to continue without impairment or interruption the perfection and priority of the liens on the Collateral in favor of the Administrative Agent pursuant to the Security Documents.
9.23 Replacement Documentation. Upon receipt of an affidavit of an officer of the Administrative Agent as to the loss, theft, destruction or mutilation of any Note or any other Security Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of any such Note or other Security Document, Borrower will issue, in lieu thereof, a replacement Note or other Security Document in the same principal amount and otherwise of like tenor upon receipt by Borrower of a suitable indemnity.
Section 10. Events of Default. If one or more of the following events (herein called “Events of Default”) shall occur and be continuing:
(a) (i) Borrower shall default in the payment when due (whether at stated maturity upon prepayment or repayment or acceleration or otherwise) of any principal of any Loan, or (ii) Borrower shall default in the payment when due of interest on any Loan or any Reimbursement Obligation or any fee or any other amount payable by it hereunder
83
or under any other Credit Document when due and such default under this clause (ii) shall have continued unremedied for five (5) or more Business Days; or
(b) Any Obligor or any Subsidiary (the Obligors and such Subsidiaries herein collectively called the “Relevant Parties” and each, a “Relevant Party”) shall default in the payment when due of any principal of or interest on any of its Indebtedness (other than the Loans) aggregating $5.0 million or more, beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created, after giving effect to any consents or waivers relating thereto; or any event specified in any note, agreement, indenture or other document evidencing or relating to any Indebtedness aggregating $5.0 million or more if the effect of such event (after giving effect to any consents or waivers relating thereto) is to cause, or (with the giving of any notice or the lapse of time or both) to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity; or any Relevant Party shall default in the payment when due of any amount aggregating $1.0 million or more under any Swap Contract; or
(c) Any representation or warranty made or deemed made in any Credit Document (or in any modification or supplement thereto) by any Relevant Party or in any certificate furnished to any Creditor pursuant to the provisions thereof, shall prove to have been false or misleading as of the time made, deemed made or furnished in any material respect; or
(d) Any Obligor shall default in the performance of any of its obligations under any of Sections 9.1(e) or 9.5 through 9.12 and 9.14 through 9.23; or any Obligor shall default in the performance of any of its obligations under Section 5.2 of the Security Agreement; or Borrower shall default in the performance of its obligations under Section 9.1(d) or (j) and such default shall continue unremedied for five (5) Business Days; or any Obligor shall default in the performance of any of its other obligations in this Agreement, the Security Documents or the Letter of Credit Documents and such default shall continue unremedied for a period of thirty days after written notice thereof to such Obligor or Borrower by the Administrative Agent; or
(e) Any Relevant Party shall not, or shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or
(f) Any Relevant Party shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code (as now or hereafter in effect), (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fail to controvert within 60 days or in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or (vi) take any corporate action by its board of directors or analogous governing body for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application or consent of the affected Relevant Party, in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator
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or the like of such Relevant Party or of all or any substantial part of its assets, or (iii) similar relief in respect of such Relevant Party under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and either (1) such proceeding shall not be actively contested by such Relevant Party, or (2) such proceeding or case shall continue undismissed, undischarged or unbonded, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days; or an order for relief against any Relevant Party shall be entered in an involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in excess of $10.0 million in the aggregate (exclusive of judgment amounts to the extent covered by insurance) or a final judgment or judgments which is reasonably likely to have a Material Adverse Effect shall be rendered by one or more courts, administrative tribunals or other bodies having jurisdiction against any Relevant Party and the same shall not be discharged (or provision shall not be made for such discharge), vacated or bonded pending appeal, or a stay of execution thereof shall not be procured, within 45 days from the date of entry thereof and such Relevant Party shall not, within said period of 45 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or
(i) Any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $2.5 million which it shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could reasonably be expected to cause one or more members of the ERISA Group to incur a payment obligation in excess of $2.5 million; or
(j) Any Change of Control; or
(k) Any Security Document after delivery thereof at any time shall cease to be in full force and effect or shall for any reason fail to create or cease to maintain a valid and duly perfected first priority security interest in and Lien upon (subject to Prior Liens and Permitted Liens (but only to the extent that the law or regulation creating or authorizing such Permitted Lien provides that such Permitted Lien must be superior to the Lien and security interest created and evidenced by the Security Documents)) any portion of the Collateral, except for (A) released Collateral or (B) any Collateral in which a security interest may not be perfected by the filing of UCC financing statements or by possession of such Collateral and possession of such Collateral by the Administrative Agent is not required by the Security Documents or this Agreement; or
(l) Any Guarantee ceases to be in full force and effect or any of the Guarantors repudiates, or attempts to repudiate, any of its obligations under any of the Guarantees (except Guarantors released from their obligations under Section 6.2); or
85
(m) The subordination provisions relating to any Senior Subordinated Note Document (the “Subordination Provisions”) shall fail to be enforceable by the Revolving Credit Lenders (which have not effectively waived the benefits thereof) in accordance with the terms thereof, or any Obligation shall fail to constitute Senior Indebtedness or Guarantor Senior Indebtedness (as defined in the Senior Subordinated Note Documents), or Borrower or any Subsidiary shall, directly or indirectly, disavow or contest in any manner any of the Subordination Provisions; or
(n) The occurrence of any uninsured Casualty Event with respect to any material portion of the Collateral;
THEREUPON: (1) in the case of an Event of Default other than one referred to in clause (f) or (g) of this Section 10, the Administrative Agent may, and upon written direction of the Majority Revolving Credit Lenders shall, by notice to Borrower, terminate the Revolving Credit Commitments and/or declare the principal amount then outstanding of, and the accrued interest on, the Loans, the Reimbursement Obligations and all other amounts payable by Borrower hereunder and under the Notes (including any amounts payable under Section 5.5 or 5.6) to be forthwith due and payable, whereupon such amounts shall be immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by Borrower, reduce any claim to judgment, take any other action permitted by law and/or take any action permitted to be taken by the Security Documents during the existence of an Event of Default; and (2) in the case of the occurrence of an Event of Default referred to in clause (f) or (g) of this Section 10, the Revolving Credit Commitments shall automatically be terminated and the principal amount then outstanding of, and the accrued interest on, the Loans, the Reimbursement Obligations and all other amounts payable by Borrower hereunder and under the Notes (including any amounts payable under Section 5.5 or 5.6) shall automatically become immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by Borrower.
In addition, Borrower agrees, upon the occurrence and during the continuance of any Event of Default if the Administrative Agent has declared the principal amount then outstanding of, and accrued interest on, the Revolving Credit Loans, and all other amounts payable to the Revolving Credit Lenders hereunder and under the Notes evidencing such Loans to be due and payable, it may and shall, if requested by the Majority Revolving Credit Lenders through the Administrative Agent (and, in the case of any Event of Default referred to in clause (f) or (g) of this Section 10 with respect to any Relevant Party, forthwith, without any demand or the taking of any other action by the Administrative Agent or such Revolving Credit Lenders) provide cover for the Letter of Credit Liabilities by paying to the Administrative Agent immediately available funds in an amount equal to the then aggregate undrawn face amount of all Letters of Credit, which funds shall be held by the Administrative Agent in the Collateral Account as collateral security in the first instance for the Letter of Credit Liabilities and be subject to withdrawal only as provided in the Security Agreement.
Section 11. The Administrative Agent.
11.1 General Provisions. Each of the Revolving Credit Lenders and the Issuing Lender hereby irrevocably appoints the Administrative Agent as its agent 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, together with such actions and powers as are reasonably incidental thereto.
The Revolving Credit Lender or other financial institution serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Revolving Credit
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Lender as any other Revolving Credit Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing by the Majority Revolving Credit Lenders (or such other number or percentage of the Revolving Credit Lenders as shall be necessary under the circumstances as provided in Section 12.4), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Borrower or any Subsidiary that is communicated to or obtained by the financial institution serving as 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 with the consent or at the request of the Majority Revolving Credit Lenders (or such other number or percentage of the Revolving Credit Lenders as shall be necessary under the circumstances as provided in Section 12.4) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until written notice thereof is given to the Administrative Agent by Borrower or a Revolving Credit Lender, and 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 Credit Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Credit Document or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other Credit Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Section 7 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the 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 believed by it to be genuine and to have been signed or sent 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 be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for 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.