Exhibit 10.4
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$70,000,000
CREDIT AGREEMENT
dated as of October 21, 2003,
among
NORCRAFT COMPANIES, L.P.,
as Borrower,
NORCRAFT HOLDINGS, L.P.
and
THE OTHER GUARANTORS PARTY HERETO,
as Guarantors,
THE LENDERS PARTY HERETO
and
UBS SECURITIES LLC, as Bookmanager and Lead Arranger,
WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent,
WACHOVIA CAPITAL MARKETS, LLC, as Co-Arranger,
CIT LENDING SERVICES CORPORATION,
as Documentation Agent,
UBS LOAN FINANCE LLC, as Swingline Lender,
and
UBS AG, STAMFORD BRANCH,
as Issuing Bank, Administrative Agent and Collateral Agent
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms..................................................2
SECTION 1.02. Classification of Loans and Borrowings........................33
SECTION 1.03. Terms Generally...............................................33
SECTION 1.04. Accounting Terms; GAAP........................................33
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments...................................................33
SECTION 2.02. Loans.........................................................34
SECTION 2.03. Borrowing Procedure...........................................35
SECTION 2.04. Evidence of Debt; Repayment of Loans..........................35
SECTION 2.05. Fees..........................................................36
SECTION 2.06. Interest on Loans.............................................37
SECTION 2.07. Termination and Reduction of Commitments......................37
SECTION 2.08. Interest Elections............................................38
SECTION 2.09. Amortization of Term Borrowings...............................39
SECTION 2.10. Optional and Mandatory Prepayments of Loans...................39
SECTION 2.11. Alternate Rate of Interest....................................42
SECTION 2.12. Increased Costs...............................................43
SECTION 2.13. Breakage Payments.............................................44
SECTION 2.14. Payments Generally; Pro Rata Treatment; Sharing of Setoffs....44
SECTION 2.15. Taxes.........................................................45
SECTION 2.16. Mitigation Obligations; Replacement of Lenders................47
SECTION 2.17. Swingline Loans...............................................48
SECTION 2.18. Letters of Credit.............................................49
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers..........................................54
SECTION 3.02. Authorization; Enforceability.................................54
SECTION 3.03. Governmental Approvals; No Conflicts..........................54
SECTION 3.04. Financial Statements..........................................55
SECTION 3.05. No Claims.....................................................55
SECTION 3.06. Properties....................................................55
SECTION 3.07. Intellectual Property.........................................56
SECTION 3.08. Condition and Maintenance of Equipment........................57
SECTION 3.09. Equity Interests and Subsidiaries.............................57
SECTION 3.10. Litigation; Compliance with Laws..............................57
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Section Page
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SECTION 3.11. Agreements....................................................57
SECTION 3.12. Federal Reserve Regulations...................................58
SECTION 3.13. Investment Company Act; Public Utility Holding Company Act....58
SECTION 3.14. Use of Proceeds...............................................58
SECTION 3.15. Taxes.........................................................58
SECTION 3.16. No Material Misstatements.....................................58
SECTION 3.17. Labor Matters.................................................59
SECTION 3.18. Solvency......................................................59
SECTION 3.19. Employee Benefit Plans........................................59
SECTION 3.20. Environmental Matters.........................................60
SECTION 3.21. Insurance.....................................................61
SECTION 3.22. Security Documents............................................61
SECTION 3.23. Acquisition Documents; Representations and Warranties in
Agreement..................................................62
SECTION 3.24. Subordination of Senior Subordinated Notes....................62
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01. Conditions to Initial Credit Extension........................62
SECTION 4.02. Conditions to All Credit Extensions...........................67
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements, Reports, etc............................68
SECTION 5.02. Litigation and Other Notices..................................70
SECTION 5.03. Existence; Businesses and Properties..........................71
SECTION 5.04. Insurance.....................................................71
SECTION 5.05. Obligations and Taxes.........................................72
SECTION 5.06. Employee Benefits.............................................73
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.....73
SECTION 5.08. Use of Proceeds...............................................73
SECTION 5.09. Compliance with Environmental Laws; Environmental Reports.....73
SECTION 5.10. Additional Collateral; Additional Guarantors..................74
SECTION 5.11. Security Interests; Further Assurances........................75
SECTION 5.12. Information Regarding Collateral..............................75
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness..................................................76
SECTION 6.02. Liens.........................................................77
SECTION 6.03. Sale and Leaseback Transactions...............................80
SECTION 6.04. Investment, Loan and Advances.................................80
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.....81
SECTION 6.06. Dividends.....................................................82
SECTION 6.07. Transactions with Affiliates..................................83
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Section Page
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SECTION 6.08. Financial Covenants...........................................84
SECTION 6.09. Prepayments of Other Indebtedness; Modifications of
Organizational Documents and Other Documents, etc..........85
SECTION 6.10. Limitation on Certain Restrictions on Subsidiaries............86
SECTION 6.11. Limitation on Issuance of Capital Stock.......................86
SECTION 6.12. Limitation on Creation of Subsidiaries........................86
SECTION 6.13. Business......................................................87
SECTION 6.14. Limitation on Accounting Changes..............................87
SECTION 6.15. Fiscal Year...................................................87
SECTION 6.16. Lease Obligations.............................................87
SECTION 6.17. No Further Negative Pledge....................................87
SECTION 6.18. Limitation on Finance Subsidiary..............................87
ARTICLE VII
GUARANTEE
SECTION 7.01. The Guarantee.................................................88
SECTION 7.02. Obligations Unconditional.....................................88
SECTION 7.03. Reinstatement.................................................89
SECTION 7.04. Subrogation; Subordination....................................89
SECTION 7.05. Remedies......................................................89
SECTION 7.06. Instrument for the Payment of Money...........................90
SECTION 7.07. Continuing Guarantee..........................................90
SECTION 7.08. General Limitation on Guarantee Obligations...................90
SECTION 7.09. Release of Guarantors.........................................90
ARTICLE VIII
EVENTS OF DEFAULT
ARTICLE IX
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
SECTION 9.01. Collateral Account............................................93
SECTION 9.02. Proceeds of Destruction, Taking and Collateral Dispositions...94
SECTION 9.03. Application of Proceeds.......................................94
ARTICLE X
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 10.01. Appointment..................................................95
SECTION 10.02. Agent in Its Individual Capacity.............................95
SECTION 10.03. Exculpatory Provisions.......................................95
SECTION 10.04. Reliance by Agent............................................96
SECTION 10.05. Delegation of Duties.........................................96
SECTION 10.06. Successor Agent..............................................96
SECTION 10.07. Non-Reliance on Agent and Other Lenders......................96
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Section Page
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SECTION 10.08. No Other Administrative Agent................................97
SECTION 10.09. Indemnification..............................................97
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices......................................................97
SECTION 11.02. Waivers; Amendment...........................................98
SECTION 11.03. Expenses; Indemnity.........................................100
SECTION 11.04. Successors and Assigns......................................101
SECTION 11.05. Survival of Agreement.......................................103
SECTION 11.06. Counterparts; Integration; Effectiveness....................104
SECTION 11.07. Severability................................................104
SECTION 11.08. Right of Setoff.............................................104
SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process..104
SECTION 11.10. Waiver of Jury Trial........................................105
SECTION 11.11. Headings....................................................105
SECTION 11.12. Confidentiality.............................................105
SECTION 11.13. Interest Rate Limitation....................................106
SECTION 11.14. Lender Addendum.............................................106
SECTION 11.15. Obligations Absolute........................................106
ANNEXES
Annex I Applicable Margin
Annex II Amortization Table
SCHEDULES
Schedule 1.01(a) Mortgaged Property
Schedule 1.01(b) Refinancing Indebtedness To Be Repaid
Schedule 1.01(c) Subsidiary Guarantors
Schedule 3.03 Governmental Approvals; Compliance with Laws
Schedule 3.06(b) Real Property
Schedule 3.07(c) Violations or Proceedings
Schedule 3.09(a) Subsidiaries
Schedule 3.09(c) Corporate Organizational Chart
Schedule 3.11(c) Material Agreements
Schedule 3.20 Environmental Matters
Schedule 3.21 Insurance
Schedule 3.23 Acquisition Documents
Schedule 4.01(f) Local Counsel
Schedule 4.01(m)(vi) Landlord Access Agreements
Schedule 4.01(n)(iii) Title Insurance Amounts
Schedule 6.01(b) Existing Indebtedness
Schedule 6.02(c) Existing Liens
Schedule 6.04(b) Existing Investments
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EXHIBITS
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Interest Election Request
Exhibit E Form of Joinder Agreement
Exhibit F Form of Landlord Access Agreement
Exhibit G Form of Mortgage
Exhibit H-1 Form of Term Note
Exhibit H-2 Form of Revolving Note
Exhibit H-3 Form of Swingline Note
Exhibit I-1 Form of Perfection Certificate
Exhibit I-2 Form of Perfection Certificate Supplement
Exhibit J-1 Form of U.S. Security Agreement
Exhibit J-2 Form of Canadian Security Agreement
Exhibit J-3 Form of Canadian Pledge Agreement
Exhibit K-1 Form of Opinion of Company Counsel
Exhibit K-2 Form of Opinion of Local Counsel
Exhibit L Form of Intercompany Note
Exhibit M Form of Solvency Certificate
Exhibit N Form of Lender Addendum
Exhibit O Form of Compliance Certificate
Exhibit P Form of LC Request
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") dated as of October 21, 2003,
among NORCRAFT COMPANIES, L.P., a Delaware limited partnership ("Borrower"),
NORCRAFT HOLDINGS, L.P., a Delaware limited partnership ("Holdings"), the
Subsidiary Guarantors (such term and each other capitalized term used but not
defined herein having the meaning given to it in Article I), the Lenders, UBS
SECURITIES LLC, as bookmanager and lead arranger (in such capacity, the "Lead
Arranger"), WACHOVIA BANK, NATIONAL ASSOCIATION, as syndication agent (in such
capacity, the "Syndication Agent"), WACHOVIA CAPITAL MARKETS, LLC, as
co-arranger (the "Co-Arranger"), UBS LOAN FINANCE LLC, as swingline lender (in
such capacity, the "Swingline Lender"), UBS AG, STAMFORD BRANCH, as Issuing Bank
(as defined below), as administrative agent for the Lenders (in such capacity,
the "Administrative Agent") and as collateral agent for the Secured Parties and
the Issuing Bank (in such capacity, the "Collateral Agent"), and CIT LENDING
SERVICES CORPORATION, as documentation agent (in such capacity, the
"Documentation Agent").
WITNESSETH:
WHEREAS, Holdings and Borrower have entered into a unit purchase agreement,
dated as of August 29, 2003 and amended as of October 3, 2003 (as further
amended, supplemented or otherwise modified from time to time in accordance with
the provisions hereof and thereof, the "Acquisition Agreement"), with the
unitholders of Borrower (collectively, "Seller"), whereby Holdings will acquire
(the "Acquisition") all of the outstanding Equity Interests of Borrower, and
Borrower will thereby become a direct Wholly Owned Subsidiary of Holdings.
WHEREAS, the Equity Financing shall be consummated simultaneously herewith.
WHEREAS, Borrower has requested the Lenders to extend credit in the form of
(a) Term Loans on the Closing Date, in an aggregate principal amount not in
excess of $45,000,000 and (b) Revolving Loans at any time and from time to time
prior to the Revolving Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of $25,000,000, of which no more than $5.0
million may be drawn on the Closing Date.
WHEREAS, Borrower has requested the Swingline Lender to make Swingline
Loans, at any time and from time to time prior to the Revolving Maturity Date,
in an aggregate principal amount at any time outstanding not in excess of $5.0
million.
WHEREAS, Borrower has requested the Issuing Bank to issue letters of
credit, in an aggregate face amount at any time outstanding not in excess of
$10.0 million.
WHEREAS, the proceeds of the Loans are to be used in accordance with
Section 3.14.
NOW, THEREFORE, the Lenders are willing to extend such credit to Borrower
and the Issuing Bank is willing to issue letters of credit for the account of
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, is used when such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Borrowing" shall mean a Borrowing comprised of ABR Revolving
Loans.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Acquisition" shall have the meaning assigned to such term in the first
recital hereto.
"Acquisition Agreement" shall have the meaning assigned to such term in the
first recital hereto.
"Acquisition Consideration" shall mean the purchase consideration for any
Permitted Acquisition and all other payments by Holdings or any of its
Subsidiaries in exchange for, or as part of, or in connection with, any
Permitted Acquisition, whether paid in cash or by exchange of Equity Interests
or of assets or otherwise and whether payable at or prior to the consummation of
such Permitted Acquisition or deferred for payment at any future time, whether
or not any such future payment is subject to the occurrence of any contingency,
and includes any and all payments representing the purchase price and any
assumptions of Indebtedness, "earn-outs" and other agreements to make any
payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits
(or the like) of any person or business; provided that any such future payment
that is subject to a contingency shall only be considered Acquisition
Consideration to the extent of the reserve, if any, required under GAAP at the
time of such sale to be established in respect thereof by Holdings or any of its
Subsidiaries.
"Acquisition Documents" shall mean the collective reference to the
Acquisition Agreement, and the other documents listed on Schedule 3.23.
"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, (a) an interest rate per annum (rounded upward, if
necessary, to the next 1/100th of 1%) determined by the Administrative Agent to
be equal to the LIBOR Rate for such Eurodollar Borrowing in effect for such
Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period.
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"Administrative Agent" shall have the meaning assigned to such term in the
preamble hereto and includes each other person appointed as the successor
pursuant to Article X.
"Administrative Agent Fees" shall have the meaning assigned to such term in
Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A, or such other form as may be supplied from time to
time by the Administrative Agent.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; provided, however, that, for purposes of Section 6.07, the term
"Affiliate" shall also include (i) any person that directly or indirectly owns
more than 10% of any class of Equity Interests of the person specified or (ii)
any person that is an executive officer or director of the person specified.
"Agents" shall mean the Lead Arranger, Co-Arranger, Syndication Agent,
Administrative Agent, Collateral Agent and Documentation Agent.
"Agreement" shall have the meaning assigned to such term in the preamble
hereto.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upward, if necessary, to the next 1/100th of 1%) equal to the greater of (a) the
Base Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 0.50%. If the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including
the inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the preceding
sentence until the circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the Base Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Base Rate or the Federal Funds Effective Rate, respectively.
"Annualization Factor" shall mean (i) four, in the case of the Test Period
ending December 31, 2003, (ii) two, in the case of the Test Period ending March
31, 2004 and (iii) 4/3, in the case of the Test Period ending June 30, 2004.
"Applicable Fee" shall mean, for any day, with respect to any Term Loan or
Revolving Loan, as the case may be, the applicable percentage set forth in Annex
I under the caption "Applicable Fee".
"Applicable Margin" shall mean, for any day, for the Term Loans, the
Revolving Loans and the Swingline Loans, the applicable percentage set forth in
the immediately succeeding table:
Eurodollar Loans ABR Loans
---------------- ---------
Term Loans 3.25% 2.25%
Revolving Loans 2.75% 1.75%
; provided that after the date of delivery to the Administrative Agent of the
financial statements and certificates required by Section 5.01(a) or (b) and
Section 5.01(c) for the fiscal period ending March 31, 2004, the Applicable
Margin shall be determined in accordance with Annex I.
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"Arranger" shall have the meaning assigned to such term in the preamble
hereto.
"Asset Sale" shall mean (a) any conveyance, sale, lease, sublease,
assignment, transfer or other disposition (including by way of merger or
consolidation and including any Sale and Leaseback Transaction) of any property
(including stock of any Subsidiary of Holdings by the holder thereof but
excluding sales of inventory and dispositions of cash equivalents, in each case,
in the ordinary course of business) by Holdings or any of its Subsidiaries and
(b) any issuance or sale by any Subsidiary of Holdings of its Equity Interests,
in each case, to any person other than (i) Borrower, (ii) any Subsidiary
Guarantor or (iii) other than for purposes of Section 6.05, any other
Subsidiary.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent,
substantially in the form of Exhibit B, or such other form as shall be approved
by the Administrative Agent.
"Base Rate" shall mean, for any day, a rate per annum that is equal to the
corporate base rate of interest established by the Administrative Agent from
time to time; each change in the Base Rate shall be effective on the date such
change is effective. The corporate base rate is not necessarily the lowest rate
charged by the Administrative Agent to its customers.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Board of Directors" shall mean, with respect to any person, (i) in the
case of any corporation, the board of directors of such person, (ii) in the case
of any limited liability company, the board of managers of such person, (iii) in
the case of any partnership, the Board of Directors of the general partner of
such person and (iv) in any other case, the functional equivalent of the
foregoing.
"Borrower" shall have the meaning assigned to such term in the preamble
hereto.
"Borrowing" shall mean (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect or (b) a Swingline Loan.
"Borrowing Request" shall mean a request by Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C, or such other
form as shall be approved by the Administrative Agent.
"Xxxxxx Employment" shall mean the employment of Xx. Xxxx Xxxxxx as
president and chief executive officer of Holdings and Borrower.
"Xxxxxx Investment" shall mean the $15.5 million (which amount shall be
reduced by the value of the Winnipeg Contribution) in cash common equity
investments in Holdings made by Xx. Xxxx Xxxxxx and members of his family on the
terms and conditions set forth in the Acquisition Documents.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Canadian Pledge Agreement" shall mean the pledge agreement substantially
in the form of Exhibit J-3 between Borrower and the Collateral Agent for the
benefit of the Secured Parties.
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"Canadian Security Agreement" shall mean the collective reference to (i)
the security agreement substantially in the form of Exhibit J-2 between Norcraft
Canada Corporation and the Collateral Agent for the benefit of the Secured
Parties and (ii) the Canadian Pledge Agreement.
"Capital Expenditures" shall mean, with respect to any person, for any
period, without duplication, the increase during that period in the gross
property, plant or equipment account reflected in the consolidated balance sheet
of such person and its Consolidated Subsidiaries, in conformity with GAAP, but
excluding expenditures made in connection with the replacement, substitution or
restoration of property (a) to the extent financed from insurance proceeds paid
on account of the loss of or damage to the property being replaced or restored,
(b) with awards of compensation arising from the taking by eminent domain or
condemnation of the property being replaced or (c) with regard to equipment that
is purchased simultaneously with the trade-in of existing equipment, fixed
assets or improvements, the credit granted by the seller of such equipment for
the trade-in of such equipment, fixed assets or improvements; provided that
Capital Expenditures shall in any event exclude any portion of such increase
attributable solely to acquisitions of property, plant and equipment in
connection with Permitted Acquisitions.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalents" shall mean, as to any person: (a) securities issued, or
directly, unconditionally and fully guaranteed or insured, by the United States
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having maturities of
not more than one year from the date of acquisition by such person; (b) time
deposits and certificates of deposit of any Lender or any commercial bank
having, or which is the principal banking subsidiary of a bank holding company
organized under the laws of the United States, any state thereof or the District
of Columbia or any foreign country having capital and surplus aggregating in
excess of $500.0 million and a rating of "A" (or such other similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) with maturities
of not more than one year from the date of acquisition by such person; (c)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (a) above entered into with any bank
meeting the qualifications specified in clause (b) above, which repurchase
obligations are secured by a valid perfected security interest in the underlying
securities; (d) commercial paper issued by any person incorporated in the United
States rated at least A2 or the equivalent thereof by Standard & Poor's Rating
Service or at least P2 or the equivalent thereof by Xxxxx'x Investors Service,
Inc., and in each case maturing not more than one year after the date of
acquisition by such person; (e) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (a) through (d) above; and (f) demand deposit accounts maintained in the
ordinary course of business.
"Casualty Event" shall mean, with respect to any property (including Real
Property) of any person, any loss of title with respect to such property or any
loss of or damage to or destruction of, or any condemnation or other taking
(including by any Governmental Authority) 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 include but not
be limited to any taking of all or any part of any Real Property of any person
or any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any law, or by reason of the temporary requisition of the use or
occupancy of all or any part of any Real Property of any person or any part
thereof by any Governmental Authority, civil or military.
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"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seq.
A "Change in Control" shall be deemed to have occurred if: (a) Holdings at
any time ceases to own 100% of the Equity Interests of Borrower; (b) at any time
a change of control occurs under and as defined in any documentation relating to
any Material Indebtedness; (c) prior to an IPO, (i) the Permitted Holders cease
to own, or to have the power to vote or direct the voting of, Voting Stock of
Holdings representing a majority of the voting power of the total outstanding
Voting Stock of Holdings or (ii) the Permitted Holders cease to own Equity
Interests representing a majority of the total economic interests of the Equity
Interests of Holdings; (d) following an IPO, (i) the Permitted Holders shall
fail to own, or to have the power to vote or direct the voting of, Voting Stock
of Holdings representing more than 25% of the voting power of the total
outstanding Voting Stock of Holdings, (ii) the Permitted Holders cease to own
Equity Interests representing more than 25% of the total economic interests of
the Equity Interests of Holdings or (iii) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act, except that in no
event shall the parties to the LP Agreement be deemed a "group" solely by virtue
of being parties to the LP Agreement), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that for purposes of this clause such person or group
shall be deemed to have "beneficial ownership" of all securities that any such
person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
Voting Stock of Holdings representing more than 30% of the voting power of the
total outstanding Voting Stock of Holdings; or (e) following an IPO, during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of Holdings (together with any new directors
whose election to such Board of Directors or whose nomination for election was
approved by a majority of the voting power of the members of the Board of
Directors of Holdings, which members comprising such majority are then still in
office and 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 Holdings.
"Change in Law" shall mean (a) the adoption of any law, treaty, order, rule
or regulation after the date of this Agreement, (b) any change in any law,
treaty, order, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or Issuing Bank (or for purposes of Section 2.12(b), by
any lending office of such Lender or by such Lender's or Issuing Bank's holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"Charges" shall have the meaning assigned to such term in Section 11.13.
"Class", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term
Loans or Swingline Loans and, when used in reference to any Commitment, refers
to whether such Commitment is a Revolving Commitment, Term Loan Commitment or
Swingline Commitment.
"Closing Date" shall mean October 21, 2003, the date of the initial Credit
Extension hereunder.
"Co-Arranger" shall have the meaning assigned to such term in the preamble
hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
-6-
"Collateral" shall mean, collectively, all of the Security Agreement
Collateral, the Mortgaged Property and all other property of whatever kind and
nature pledged as collateral under any Security Document.
"Collateral Account" shall mean a collateral account or sub-account in the
form of a deposit account established and maintained by the Collateral Agent for
the benefit of the Secured Parties, in accordance with the provisions of Section
9.01.
"Collateral Agent" shall have the meaning assigned to such term in the
preamble hereto.
"Commercial Letter of Credit" shall mean any letter of credit or similar
instrument issued for the account of Borrower for the benefit of Borrower or any
of its Subsidiaries, for the purpose of providing credit support in connection
with the purchase of materials, goods or services by Borrower or any of its
Subsidiaries in the ordinary course of their businesses.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Commitment, Term Loan Commitment and Swingline Commitment.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Companies" shall mean Holdings and its Subsidiaries; and "Company" shall
mean any one of them.
"Compliance Certificate" shall mean a certificate of a Financial Officer
substantially in the form of Exhibit O.
"Confidential Information Memorandum" shall mean that certain confidential
information memorandum dated October 2003.
"Consolidated Amortization Expense" for any period means the amortization
expense of Borrower and its Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, including, to the
extent in accordance with GAAP, the amortization of capitalized store displays.
"Consolidated Companies" shall mean Holdings and its Consolidated
Subsidiaries.
"Consolidated Current Assets" shall mean, at any date of determination, the
total assets (other than cash or Cash Equivalents) of Borrower and its
Consolidated Subsidiaries which may properly be classified as current assets on
a consolidated balance sheet of Borrower and its Consolidated Subsidiaries in
accordance with GAAP.
"Consolidated Current Liabilities" shall mean, as at any date of
determination, the total liabilities of Borrower and its Consolidated
Subsidiaries which may properly be classified as current liabilities (other than
the current portion of any Indebtedness) on a consolidated balance sheet of
Borrower and its Consolidated Subsidiaries in accordance with GAAP.
"Consolidated Depreciation Expense" for any period means the depreciation
expense of Borrower and its Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
-7-
"Consolidated EBITDA" shall mean, for any period, Consolidated Net Income
for such period, adjusted by (x) adding thereto, in each case only to the extent
(and in the same proportion) deducted in determining such Consolidated Net
Income (and with respect to the portion of Consolidated Net Income attributable
to any Subsidiary of Borrower only if a corresponding amount would be permitted
at the date of determination to be distributed to Borrower by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its Organizational Documents and all agreements, instruments, judgments,
decrees, orders, statutes, rules and regulations applicable to such Subsidiary
or its equityholders):
(a) Consolidated Interest Expense,
(b) Consolidated Amortization Expense,
(c) Consolidated Depreciation Expense,
(d) dividends paid to Holdings pursuant to Section 6.06(d) plus,
without duplication, any other provision for taxes based on income for
Borrower and its Consolidated Subsidiaries,
(e) costs and expenses incurred in connection with the Transactions
(for the avoidance of doubt, including the payment by Borrower of bonus and
severance payments to Mr. Hank Key and all other success bonuses paid by
Borrower to employees of Borrower upon and in connection with the
consummation of the Acquisition) and the Exchange Offer pursuant to the
Registration Rights Agreement (including amortization of debt issuance
costs, debt discount or premium and other financing fees and expenses
directly relating thereto),
(f) the amount of any payments made in accordance with Section 6.07(d)
and any management fees paid in the ordinary course by Borrower to its
former financial sponsor during the period from and including October 1,
2003 to and excluding the Closing Date and
(g) all other non-cash items reducing Consolidated Net Income
(including non-cash write-offs of goodwill, intangibles and long-lived
assets and non-cash items resulting from purchase accounting, but excluding
any non-cash charge that results in an accrual of a reserve for cash
charges in any future period) for such period and
(y) subtracting therefrom the aggregate amount of all non-cash items, determined
on a consolidated basis, to the extent such items increased Consolidated Net
Income (other than the accrual of revenue, recording of receivables or the
reversal of reserves in the ordinary course of business) for such period.
Other than for purposes of calculating Excess Cash Flow, Consolidated
EBITDA shall be calculated on a Pro Forma Basis to give effect to the
Acquisition, any Permitted Acquisition and Asset Sales (other than any Asset
Sale pursuant to Section 6.05(b)(ii) or (d) and other dispositions in the
ordinary course of business) consummated during the fiscal period of Borrower
ended on the Test Period thereof as if each such Permitted Acquisition had been
effected on the first day of such period and as if each such Asset Sale had been
consummated on the day prior to the first day of such period. Notwithstanding
anything else contained in this definition, calculated on a Pro Forma Basis to
give effect to the Acquisition, Consolidated EBITDA for the first, second and
third quarters of 2003 shall be deemed to be $10,056,000, $12,003,000 and
$12,876,000, respectively.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any Test Period,
the ratio of (a) Consolidated EBITDA for such Test Period to (b) Consolidated
Fixed Charges for such Test Period.
-8-
"Consolidated Fixed Charges" shall mean, for any period, the sum, without
duplication, of
(a) Consolidated Interest Expense for such period, to the extent paid
or payable in cash,
(b) the amount of all Capital Expenditures made by Borrower and its
Subsidiaries during such period (other than to the extent financed by
Excluded Issuances),
(c) all dividends paid pursuant to Section 6.06(d) during such period
plus, without duplication, all cash payments in respect of income taxes in
respect of Borrower or any of its Subsidiaries, and
(d) the scheduled principal amount of all amortization payments on all
Indebtedness (including the principal component of all Capital Lease
Obligations) of Borrower and its Subsidiaries for such period (as
determined on the first day of the respective period), except that for any
Test Period in 2004 or 2003, the amount of the scheduled principal amount
of amortization payments on the Term Loans during such Test Period shall be
deemed to be the amount of all such amortization payments to be made in
2004;
provided that for any Test Period ending on or before June 30, 2004, the amount
of any items referred to in clause (a) or (c) of this definition shall be equal
to, subject to the succeeding proviso, (i) the amount of such items for the
period from and after October 1, 2003 times (ii) the Annualization Factor for
such Test Period; provided, further, that the amount of such items for the
fiscal quarter ending December 31, 2003 shall be equal to (x) the amount of such
items for the period from and after the Closing Date to and including December
31, 2003 times (y) the Full Quarter Factor.
"Consolidated Indebtedness" shall mean, as at any date of determination,
the aggregate amount of all Indebtedness (but including in any event the then
outstanding principal amount of all Loans, all Capital Lease Obligations and all
LC Exposure) of Borrower and its Consolidated Subsidiaries on a consolidated
basis as determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" shall mean, for any Test Period, the
ratio of (x) Consolidated EBITDA for such Test Period to (y) Consolidated
Interest Expense for such Test Period, to the extent paid or payable in cash;
provided that for any Test Period ending on or before June 30, 2004, such
Consolidated Interest Expense shall be equal to, subject to the succeeding
proviso, (i) Consolidated Interest Expense (to the extent paid or payable in
cash) for the period from and after October 1, 2003 times (ii) the Annualization
Factor for such Test Period; provided, further, that for the fiscal quarter
ending December 31, 2003, such Consolidated Interest Expense shall be equal to
(x) Consolidated Interest Expense (to the extent paid or payable in cash) for
the period from and after the Closing Date to and including December 31, 2003
times (y) the Full Quarter Factor.
"Consolidated Interest Expense" shall mean, for any period, to the total
consolidated interest expense of Borrower and its Consolidated Subsidiaries for
such period determined in accordance with GAAP plus, without duplication:
(a) imputed interest on Capital Lease Obligations of Borrower and its
Consolidated Subsidiaries for such period,
(b) commissions, discounts and other fees and charges owed by Borrower
or any of its Consolidated Subsidiaries with respect to letters of credit
securing financial obligations, bankers' acceptance financing and
receivables financings,
-9-
(c) amortization of debt issuance costs, debt discount or premium and
other financing fees and expenses incurred by Borrower or any of its
Consolidated Subsidiaries,
(d) cash contributions to any employee stock ownership plan or similar
trust made by Borrower or any of its Consolidated Subsidiaries to the
extent such contributions are used by such plan or trust to pay interest or
fees to any person (other than Borrower or a Wholly Owned Subsidiary) in
connection with Indebtedness incurred by such plan or trust,
(e) all interest paid or payable with respect to discontinued
operations of Borrower or any of its Consolidated Subsidiaries,
(f) the interest portion of any deferred payment obligations of
Borrower or any of its Consolidated Subsidiaries,
(g) all interest on any Indebtedness of Borrower or any of its
Subsidiaries of the type described in clause (f) or (j) of the definition
of "Indebtedness," and
(h) any other non-cash interest expense of Borrower and its
Consolidated Subsidiaries for such period;
provided that (a) to the extent directly related to the Transactions or the
Exchange Offer pursuant to the Registration Rights Agreement, debt issuance
costs, debt discount or premium and other financing fees and expenses shall be
excluded from the calculation of Consolidated Interest Expense and (b)
Consolidated Interest Expense of Borrower and its Subsidiaries shall be
calculated after giving effect to Interest Rate Agreements (including associated
costs), but excluding unrealized gains and losses with respect to Interest Rate
Agreements.
Consolidated Interest Expense shall be calculated on a Pro Forma Basis to
give effect to any Indebtedness incurred, assumed or permanently repaid or
extinguished during the relevant Test Period in connection with any Permitted
Acquisitions and Asset Sales (other than any Asset Sale pursuant to Section
6.05(b)(ii) or (d) and other dispositions in the ordinary course of business) as
if such incurrence, assumption, repayment or extinguishing had been effected on
the first day of such period.
"Consolidated Net Income" shall mean, for any period, the consolidated net
income (or loss) of Borrower and its Consolidated Subsidiaries determined in
accordance with GAAP; provided that there shall be excluded from such net income
(to the extent otherwise included therein), without duplication:
(a) the net income (or loss) of any person (other than a Consolidated
Subsidiary of Borrower) in which any person other than Borrower and its
Consolidated Subsidiaries has an ownership interest, except to the extent
that cash in an amount equal to any such income has actually been received
by Borrower or (subject to clause (c) below) any of its Consolidated
Subsidiaries during such period,
(b) except to the extent includible in the Consolidated Net Income of
Borrower pursuant to the foregoing clause (a), the net income (or loss) of
any person that accrued prior to the date that (1) such person becomes a
Consolidated Subsidiary of Borrower or is merged into or consolidated with
Borrower or any of its Consolidated Subsidiaries or (2) the assets of such
person are acquired by Borrower or any of its Consolidated Subsidiaries,
(c) the net income of any Consolidated Subsidiary of Borrower during
such period to the extent that the declaration or payment of dividends or
similar distributions by such Xxxxxxx-
-10-
dated Subsidiary of that income is not permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Consolidated
Subsidiary during such period, except that Borrower's equity in a net loss
of any such Consolidated Subsidiary for such period shall be included in
determining Consolidated Net Income,
(d) any gain (or loss), together with any related provisions for taxes
on any such gain (or the tax effect of any such loss), realized during such
period by Borrower or any of its Consolidated Subsidiaries upon (x) the
acquisition of any securities, or the extinguishment of any Indebtedness,
of Borrower or any Consolidated Subsidiary of Borrower or (y) any Asset
Sale (other than any Asset Sale pursuant to Section 6.05(b)(i) or (d), and
other dispositions in the ordinary course of business) by Borrower or any
Consolidated Subsidiary of Borrower,
(e) gains and losses due solely to fluctuations in currency values and
the related tax effects according to GAAP,
(f) earnings resulting from any reappraisal, revaluation or write-up
of assets,
(g) unrealized gains and losses with respect to Hedging Obligations
and
(h) any extraordinary or nonrecurring gain (or extraordinary or
nonrecurring loss), together with any related provision for taxes on any
such gain (or the tax effect of any such loss), recorded or recognized by
Borrower or any of its Consolidated Subsidiaries during such period.
For purposes of this definition of "Consolidated Net Income," (1) "nonrecurring"
means any gain or loss as of any date that is not reasonably likely to recur
within the two years following such date; provided that if there was a gain or
loss similar to such gain or loss within the two years preceding such date, such
gain or loss shall not be deemed nonrecurring and (2) Consolidated Net Income
shall be reduced (to the extent not already reduced thereby) by the amount of
any payments to or on behalf of Holdings made pursuant to Sections 6.06(c) and
(d).
"Consolidated Subsidiary" shall mean, as to any person, all Subsidiaries of
such person which are consolidated with such person for financial reporting
purposes in accordance with GAAP.
"Contested Collateral Lien Conditions" shall mean, with respect to any
Permitted Lien of the type described in clauses (a), (b), (e) and (f) of Section
6.02, the following conditions:
(a) Borrower shall cause any proceeding instituted contesting such
Lien to stay the sale or forfeiture of any portion of the Collateral on
account of such Lien; and
(b) such Lien shall in all respects be subject and subordinate in
priority to the Lien and security interest created and evidenced by the
Security Documents, except if and to the extent that the law or regulation
creating, permitting or authorizing such Lien provides that such Lien is or
must be superior to the Lien and security interest created and evidenced by
the Security Documents.
"Contingent Obligation" shall mean, as to any person, any obligation,
agreement, understanding or arrangement of such person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect se-
-11-
curity therefor; (b) to advance or supply funds (i) for the purchase or payment
of any such primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor; (c) 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; (d) with respect to bankers' acceptances, letters of credit and
similar credit arrangements, until a reimbursement obligation arises (which
reimbursement obligation shall constitute Indebtedness); or (e) otherwise to
assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term "Contingent Obligation" shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business or any product warranties. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such person may be liable, whether severally or jointly,
pursuant to the terms of the instrument evidencing such Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such person is required to perform thereunder) as
determined by such person in good faith.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "Controlled" and "Controlling" shall have a meaning correlative
thereto.
"Control Agreement" shall have the meaning assigned to such term in the
U.S. Security Agreement.
"Control Investment Affiliate" means, as to any person, any other person
(a) which directly or indirectly, is in Control of, is Controlled by, or is
under common Control with, such person and is organized by such person (or any
person Controlling such person) primarily for making equity or debt investments
in Holdings, Borrower or other portfolio companies or (b) as to which such
person has the right to exercise the rights in all of the Voting Stock held by
such other person, directly or indirectly, in Borrower.
"Credit Extension" shall mean, as the context may require, (i) the making
of a Loan by a Lender or (ii) the issuance of any Letter of Credit, or the
amendment, extension or renewal of any existing Letter of Credit, by the Issuing
Bank.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement or other similar agreement.
"Debt Issuance" shall mean the incurrence by Holdings or any of its
Subsidiaries of any Indebtedness after the Closing Date (other than as permitted
by Section 6.01).
"Default" shall mean any event, occurrence or condition which is, or upon
notice, lapse of time or both would constitute, an Event of Default.
"Disqualified Capital Stock" shall mean any Equity Interest which, 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, (a) 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 option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Term Loan Maturity Date, (b) is
convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) debt securities or (ii) any Equity Interests referred to in (a)
above, in each case at any time on or prior to the
-12-
first anniversary of the Term Loan Maturity Date, or (c) contains any repurchase
obligation which may come into effect prior to payment in full of all
Obligations.
"Dividend" with respect to any person shall mean that such person has (i)
declared or paid a dividend or returned any equity capital to the holders of its
Equity Interests or authorized or made any other distribution, payment or
delivery of property (other than Qualified Capital Stock of such person) or cash
to the holders of its Equity Interests as such, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its Equity Interests outstanding (or any options or warrants issued
by such person with respect to its Equity Interests), or set aside any funds for
any of the foregoing purposes, or shall have permitted any of its Subsidiaries
to purchase or otherwise acquire for a consideration any shares of any class of
Equity Interests of such person outstanding (or any options or warrants issued
by such person with respect to its Equity Interests) or (ii) made any payment on
or in respect of any Holdings Employee Note. Without limiting the foregoing,
"Dividends" with respect to any person shall also include all payments made or
required to be made by such person with respect to any stock appreciation
rights, plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes.
"dollars" or "$" shall mean lawful money of the United States.
"Domestic Subsidiary" shall mean any Subsidiary that is organized or
existing under the laws of the United States, any state thereof or the District
of Columbia.
"Environment" shall mean ambient air, surface water and groundwater
(including, without limitation, potable water, navigable water and wetlands),
the land surface or subsurface strata, natural resources, the workplace or as
otherwise defined in any Environmental Law.
"Environmental Claim" shall mean any claim, notice, demand, order, action,
suit, proceeding or other communication alleging liability for investigation,
remediation, removal, cleanup, response, corrective action, damages to natural
resources, personal injury, property damage, fines, penalties or other costs
resulting from, related to or arising out of (i) the presence, Release or
threatened Release in or into the Environment of Hazardous Material at any
location or (ii) any violation of Environmental Law, and shall include, without
limitation, any claim seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from, related to or
arising out of the presence, Release or threatened Release of Hazardous Material
or alleged injury or threat of injury to health, safety or the Environment.
"Environmental Law" shall mean any and all applicable present and future
treaties, laws, statutes, ordinances, regulations, rules, decrees, orders,
judgments, consent orders, consent decrees or other binding requirements, and
the common law, relating to protection of public health or the Environment, the
Release or threatened Release of Hazardous Material, natural resources or
natural resource damages, or occupational safety or health.
"Environmental Permit" shall mean any permit, license, approval, consent or
other authorization required by or from a Governmental Authority under
Environmental Law.
"Equity Financing" shall mean common equity investments in Holdings of not
less than $133.0 million, consisting of the aggregate of the cash invested by
the Equity Investors on the terms and conditions set forth in the Acquisition
Documents, the Rollover Equity, equity issued to management as consideration for
cash, the Winnipeg Contribution and the Xxxxxx Investment.
-13-
"Equity Interest" 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 equity 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 date
hereof or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.
"Equity Investors" shall mean the Sponsors, their Controlled Investment
Affiliates and one or more investors reasonably satisfactory to the
Administrative Agent and the Arranger.
"Equity Issuance" shall mean, without duplication, any issuance or sale by
Holdings after the Closing Date of (a) any Equity Interests in Holdings
(including any Equity Interests issued upon exercise of any warrant or option)
or any warrants or options to purchase Equity Interests in Holdings or (b) any
other security or instrument representing an Equity Interest (or the right to
obtain any Equity Interest) in Holdings; provided, however, that an Equity
Issuance shall not include (i) any Preferred Stock Issuance or Debt Issuance,
(ii) any such sale or issuance by Holdings to directors, officers or employees
of any Company and (iii) any Excluded Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan
(other than an event for which the 30-day notice period is waived by
regulation); (b) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived, the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any Plan or the
failure to make any required contribution to a Multiemployer Plan; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by any Company or any of its ERISA Affiliates from the PBGC or a
plan administrator of any notice relating to the intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan, or the occurrence of
any event or condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (f) the incurrence by any Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by any Company or its ERISA Affiliates of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the making of any
amendment to any Plan which could result in the imposition of a lien or the
posting of a bond or other security; and (i) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could reasonably be expected to result in liability
to any Company.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
-14-
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or Eurodollar
Term Loan.
"Eurodollar Revolving Borrowing" shall mean a Borrowing comprised of
Eurodollar Revolving Loans.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Adjusted LIBOR Rate in accordance with
the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised of Eurodollar
Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VIII.
"Excess Amount" shall have the meaning assigned to such term in Section
2.10(h)(ii).
"Excess Cash Flow" shall mean, for any fiscal year of Borrower, the sum,
without duplication, of
(a) Consolidated EBITDA for such fiscal year, plus
(b) cash gains excluded from Consolidated Net Income for such fiscal
year, plus
(c) reductions to non-cash working capital of Borrower and its
Consolidated Subsidiaries for such fiscal year (i.e., the decrease, if any,
in Consolidated Current Assets minus Consolidated Current Liabilities from
the beginning to the end of such fiscal year), minus
(d) the amount of any cash income taxes paid or payable by Borrower
and its Consolidated Subsidiaries with respect to such fiscal year, net of
any cash tax refunds received or receivable by Borrower or any of its
Consolidated Subsidiaries in such fiscal year, plus, without duplication,
Dividends paid pursuant to Section 6.06(d) in such fiscal year, minus
(e) Consolidated Interest Expense, to the extent paid or payable in
cash paid during such fiscal year, minus
(f) Capital Expenditures made in cash in accordance with Section
6.08(d) during such fiscal year, to the extent funded from internally
generated funds (for the avoidance of doubt, Capital Expenditures, to the
extent financed with one or more Excluded Issuances, shall not be deemed
funded from internally generated funds), minus
(g) permanent repayments and prepayments of Indebtedness made by
Borrower and its Consolidated Subsidiaries during such fiscal year, to the
extent funded with internally generated funds, minus
(h) amounts referred to in clauses (e) and (f) of the definition of
Consolidated EBITDA, to the extent paid in cash in such fiscal year, minus
(i) cash losses excluded from the calculation of Consolidated Net
Income for such fiscal year, minus
-15-
(j) additions to noncash working capital for such fiscal year (i.e.,
the increase, if any, in Consolidated Current Assets minus Consolidated
Current Liabilities from the beginning to the end of such fiscal year),
minus
(k) the amount of Acquisition Consideration (exclusive of any amounts
financed by Excluded Issuances) expended in cash during such fiscal year;
provided that, to the extent otherwise included therein, the Net Cash Proceeds
of Asset Sales and Casualty Events shall be deducted in calculating Excess Cash
Flow.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Offer" shall have the meaning assigned to such term in the
Registration Rights Agreement.
"Excluded Issuance" shall mean an issuance and sale of Qualified Capital
Stock of Holdings, to the extent such Qualified Capital Stock is used, or the
Net Cash Proceeds thereof shall be, within 45 days of the consummation of such
issuance and sale, used, without duplication, to finance Capital Expenditures or
one or more Permitted Acquisitions.
"Excluded Taxes" shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States or any
political subdivision thereof or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located (other
than franchise taxes imposed in lieu of income taxes, whether or not such
franchise taxes are actually measured by income), and (b) in the case of a
Foreign Lender (other than an assignee pursuant to a request by Borrower under
Section 2.16), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.15(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from Borrower
with respect to such withholding tax pursuant to Section 2.15(a) (it being
understood and agreed, for the avoidance of doubt, that any withholding tax
imposed on a Foreign Lender as a result of a Change in Law or regulation or
interpretation thereof occurring after the time such Foreign Lender became a
party to this Agreement shall not be an Excluded Tax, so long such lender
complies (if such Lender is legally able to comply) with Section 2.15(e)).
"Existing Lien" shall have the meaning assigned to such term in Section
6.02(c).
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.
"Fee Letter" shall mean the confidential Fee Letter, dated August 29, 2003,
among Norcraft Holdings, L.L.C., UBS AG, Cayman Islands Branch and UBS
Securities LLC.
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"Fees" shall mean the Commitment Fees, the Administrative Agent Fees, the
LC Participation Fees and the Fronting Fees.
"Finance Subsidiary" shall mean Norcraft Finance Corp., a Delaware
corporation.
"Financial Officer" of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.
"FIRREA" shall mean the Federal Institutions Reform, Recovery and
Enforcement Act of 1989.
"Foreign Lender" shall mean any Lender that is not, for United States
federal income tax purposes, (i) a citizen or resident of, or otherwise subject
to taxation by, the United States, (ii) a corporation or entity treated as a
corporation created or organized in or under the laws of the United States, or
any political subdivision thereof, (iii) an estate the income of which is
subject to U.S. federal income taxation regardless of its source or (iv) a trust
if a court within the United States is able to exercise primary supervision over
the administration of such trust and one or more United States persons have the
authority to control all substantial decisions of such trust.
"Foreign Plan" shall mean any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by any Company with
respect to employees employed outside the United States.
"Foreign Subsidiary" shall mean a Subsidiary that is organized under the
laws of a jurisdiction other than the United States or any state thereof or the
District of Columbia.
"Fronting Fees" shall have the meaning assigned to such term in Section
2.05(c).
"Full Quarter Factor" means the quotient obtained by dividing (a) the
number of days in the fourth quarter of 2003 (i.e., 92) by (b) the number of
days in the period from and including the Closing Date to and including the last
day of the fourth fiscal quarter of 2003 (i.e., 72).
"GAAP" shall mean generally accepted accounting principles in the United
States applied on a consistent basis.
"General Partner" means Norcraft GP, L.L.C., a Delaware limited liability
company, or any successor sole general partner or managing general partner of
Borrower or Holdings.
"Governmental Authority" shall mean any federal, state, local or foreign
court, central bank or governmental agency, authority, instrumentality or
regulatory body.
"Governmental Real Property Disclosure Requirements" shall mean any
Requirement of Law of any Governmental Authority requiring notification of the
buyer, lessee, mortgagee, assignee or other transferee of any Real Property,
facility, establishment or business, or notification, registration or filing to
or with any Governmental Authority, in connection with the sale, lease,
mortgage, assignment or other transfer (including, without limitation, any
transfer of control) of any Real Property, facility, establishment or business,
of the actual or threatened presence or Release in or into the Environment, or
the use, disposal or handling of Hazardous Material on, at, under or near the
Real Property, facility, establishment or business to be sold, leased,
mortgaged, assigned or transferred.
"Guaranteed Obligations" shall have the meaning assigned to such term in
Section 7.01.
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"Guarantees" shall mean the guarantees issued pursuant to Article VII by
Holdings and the Subsidiary Guarantors.
"Guarantors" shall mean Holdings and the Subsidiary Guarantors.
"Hazardous Materials" shall mean the following: hazardous substances;
hazardous wastes; polychlorinated biphenyls ("PCBs") or any substance or
compound containing PCBs; asbestos or any asbestos-containing materials in any
form or condition; radon or any other radioactive materials including any
source, special nuclear or by-product material; petroleum, crude oil or any
fraction thereof; and any other pollutant or contaminant or chemicals, wastes,
materials, compounds, constituents or substances, subject to regulation or which
can give rise to liability under any Environmental Laws.
"Hedging Obligations" of any person means the obligations of such person
under swap, cap, collar, forward purchase or similar agreements or arrangements
dealing with interest rates, currency exchange rates or commodity prices, either
generally or under specific contingencies.
"Holdings" shall have the meaning assigned to such term in the preamble
hereto.
"Holdings Employee Notes" means promissory notes issued by Holdings to
officers, directors or employees of any Company or former officers, directors or
employees (or their transferees, estates or beneficiaries under their estates)
of any Company as consideration for the repurchase or redemption of Qualified
Capital Stock of Holdings held by such persons upon their death, disability,
retirement, severance or termination of employment or service; provided that the
Indebtedness evidenced by such promissory notes shall (i) be subordinated to the
Obligations pursuant to subordination provisions similar to those set forth in
the form of Intercompany Note attached hereto as Exhibit L and (ii) be
unsecured.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or advances; (b) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments; (c)
all obligations of such person upon which interest charges are customarily paid
or accrued; (d) all obligations of such person under conditional sale or other
title retention agreements relating to property purchased by such person; (e)
all obligations of such person issued or assumed as the deferred purchase price
of property or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business on normal trade terms);
(f) all Indebtedness of others secured by any Lien on property owned or acquired
by such person, whether or not the obligations secured thereby have been
assumed, but limited to the fair market value of such property; (g) all Capital
Lease Obligations and Purchase Money Obligations of such person; (h) all net
Hedging Obligations to the extent required to be reflected on a balance sheet of
such person; (i) all obligations of such person for the reimbursement of any
obligor in respect of letters of credit, letters of guaranty, bankers'
acceptances and similar credit transactions; 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. The Indebtedness of any person
shall include the Indebtedness of any other entity (including any partnership in
which such person is a general partner) to the extent such person is liable
therefor as a result of such person's ownership interest in or other
relationship with such entity, except to the extent that terms of such
Indebtedness provide that such person is not liable therefor.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitee" shall have the meaning assigned to such term in Section
11.03(b).
"Independent Director" means, with respect to any transaction, a member of
the Board of Directors of Holdings who is independent with respect to such
transaction.
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"Information" shall have the meaning assigned to such term in Section
11.12.
"Insurance Policies" means the insurance policies and coverages required to
be maintained by each Loan Party which is an owner of Mortgaged Property with
respect to the applicable Mortgaged Property pursuant to Section 5.04 and all
renewals and extensions thereof.
"Insurance Requirements" means, collectively, all provisions of the
Insurance Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Loan Party which is an owner of Mortgaged Property
and applicable to the Mortgaged Property or any use or condition thereof.
"Intellectual Property" shall have the meaning assigned to such term in
Section 3.07(c).
"Intercompany Note" shall mean a promissory note substantially in the form
of Exhibit L.
"Interest Election Request" shall mean a request by Borrower to convert or
continue a Revolving Borrowing or Term Borrowing in accordance with Section
2.08(b), substantially in the form of Exhibit D.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan
(including Swingline Loans), the last Business Day of each March, June,
September and December to occur during any period in which such Loan is
outstanding, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Loan with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
(c) with respect to any Revolving Loan or Swingline Loan, the Revolving Maturity
Date and (d) with respect to any Term Loan, the Term Loan Maturity Date.
"Interest Period" shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, if each affected Lender so agrees, nine months) thereafter, as Borrower may
elect; provided that (a) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing; provided, however, that an
Interest Period shall be limited to the extent required under Section 2.03(e).
"Interest Rate Agreement" shall mean any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar agreement
or arrangement.
"internally generated funds" shall mean funds not constituting the proceeds
of any Loan, Debt Issuance (without regard to the parenthetical phrase in the
definition thereof), Preferred Stock Issuance (without regard to the
parenthetical phrase in the definition thereof), Equity Issuance (without regard
to the proviso in the definition thereof), Asset Sale, insurance, eminent
domain, condemnation or other similar recovery or Indebtedness.
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"Investments" shall have the meaning assigned to such term in Section 6.04.
"IPO" shall mean the first underwritten public offering by Holdings of its
Equity Interests after the Closing Date pursuant to a registration statement
filed with the Securities and Exchange Commission in accordance with the
Securities Act.
"Issuing Bank" shall mean, as the context may require, (a) UBS AG, Stamford
Branch, with respect to Letters of Credit issued by it; (b) any other Lender
that may become an Issuing Bank pursuant to Section 2.18(i), with respect to
Letters of Credit issued by such Lender; or (c) collectively, all of the
foregoing.
"Joinder Agreement" shall mean that certain joinder agreement substantially
in the form of Exhibit E.
"Landlord Access Agreement" shall mean each Landlord Access Agreement,
substantially in the form of Exhibit F or such other form as may reasonably
acceptable to the Administrative Agent.
"LC Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.18.
"LC Disbursement" shall mean a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.
"LC Exposure" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all Reimbursement Obligations outstanding at such time. The
LC Exposure of any Revolving Lender at any time shall mean its Pro Rata
Percentage of the aggregate LC Exposure at such time.
"LC Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
"LC Request" shall mean a request by Borrower in accordance with the terms
of Section 2.18(b) and substantially in the form of Exhibit P, or such other
form as shall be approved by the Administrative Agent.
"LC Sub-Account" shall have the meaning assigned to such term in Section
9.01(d).
"Lead Arranger" has the meaning assigned in the preamble.
"Leases" shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.
"Lender Addendum" shall mean with respect to any Lender on the Closing
Date, a lender addendum in the form of Exhibit N to be executed and delivered by
such Lender on the Closing Date as provided in Section 11.14.
"Lender Affiliate" shall mean with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such advisor.
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"Lenders" shall mean (a) the financial institutions that have become a
party hereto pursuant to a Lender Addendum (other than any such financial
institution that has ceased to be a party hereto pursuant to an Assignment and
Acceptance) and (b) any financial institution that has become a party hereto
pursuant to an Assignment and Acceptance. Unless the context clearly indicates
otherwise, the term "Lenders" shall include the Swingline Lender.
"Letter of Credit" shall mean any (i) Standby Letter of Credit and (ii)
Commercial Letter of Credit, in each case, issued or to be issued by an Issuing
Bank for the account of Borrower pursuant to Section 2.18.
"Letter of Credit Expiration Date" shall mean the date which is fifteen
days prior to the Revolving Maturity Date.
"Leverage Ratio" shall mean, at any date of determination, the ratio of
Consolidated Indebtedness on such date to Consolidated EBITDA for the Test
Period then most recently ended.
"LIBOR Rate" shall mean, with respect to any Eurodollar Borrowing 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 (i) if no comparable term for an Interest Period is
available, the LIBOR Rate shall be determined using the weighted average of the
offered rates for the two terms most nearly corresponding to such Interest
Period and (ii) 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 Eurodollar
Borrowings 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 Eurodollar
Borrowing 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).
"Lien" shall mean, with respect to any property, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, claim, charge, assignment, hypothecation,
security interest or encumbrance of any kind or any filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
notice or recording statute of any Governmental Authority, including any
easement, right-of-way or other encumbrance on title to Real Property, in each
of the foregoing cases whether voluntary or imposed by law, and any agreement to
give any of the foregoing; (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such property; and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Notes (if any), the Security Documents, each Hedging Obligation relating to the
Loans entered into with any counterparty that was a Lender or an Affiliate of a
Lender at the time such Hedging Obligation was entered into and, solely for the
purposes of paragraph (e) of Article VIII, the Fee Letter.
-21-
"Loan Parties" shall mean Holdings, Borrower and the Subsidiary Guarantors.
"Loans" shall mean, as the context may require, a Revolving Loan, a Term
Loan or a Swingline Loan.
"LP Agreement" means the amended and restated agreement of limited
partnership of Holdings dated as of October 21, 2003, as such agreement may be
amended from time to time in accordance with the provisions hereof and thereof.
"Management and Monitoring Agreement" means the management and monitoring
agreement dated as of the Closing Date among Xxxxxxxx Xxxx & Xxxxxx, LLC,
Trimaran Fund Management, L.L.C. and Borrower, as such agreement may be amended
from time to time in accordance with the provisions hereof and thereof.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean (a) a material adverse effect on the
business, property, results of operations, prospects or condition, financial or
otherwise of Borrower and its Subsidiaries, taken as a whole; (b) material
impairment of the ability of the Loan Parties to legally perform fully and on a
timely basis any of their obligations under any Loan Document; or (c) material
impairment of the rights of or benefits or remedies available to the Lenders or
the Collateral Agent under any Loan Document.
"Material Indebtedness" shall mean (a) the Senior Subordinated Notes and
the Senior Subordinated Guarantees and (b) any other Indebtedness (other than
the Loans and Letters of Credit), or one or more Hedging Obligations, of any
Loan Party evidencing an aggregate outstanding principal amount exceeding $5.0
million. For purposes of determining Material Indebtedness, the "principal
amount" in respect of any Hedging Obligations of any Loan Party at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that such Loan Party would be required to pay if such Hedging Obligations were
terminated at such time.
"Maximum Rate" shall have the meaning assigned to such term in Section
11.13.
"Mortgage" shall mean an agreement, including, but not limited to, a
mortgage, deed of trust or any other document, creating and evidencing a Lien on
a Mortgaged Property, which (i) in the case of Real Property owned in fee, shall
be in substantially in the form of Exhibit G and (ii) in the case of leased Real
Property, shall be in a form reasonably satisfactory to the Collateral Agent, in
each case, with such schedules and including such provisions as shall be
necessary to conform such document to applicable local or foreign law or as
shall be customary under applicable local or foreign law.
"Mortgaged Property" shall mean (a) each Real Property identified on
Schedule 1.01(a) hereto and (b) each Real Property, if any, which shall be
subject to a Mortgage delivered after the Closing Date pursuant to Section
5.10(c).
"Multiemployer Plan" shall mean a multiemployer plan within the meaning of
Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Company or any
ERISA Affiliate is then making or accruing an obligation to make contributions;
(b) to which any Company or any ERISA Affiliate has within the preceding five
plan years made contributions; or (c) with respect to which any Company could
incur liability.
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"Net Cash Proceeds" shall mean:
(a) with respect to any Asset Sale (other than any Asset Sale
described in clause (b) of the definition thereof), the cash proceeds
received by any Loan Party (including cash proceeds subsequently received
(as and when received by any Loan Party) in respect of noncash
consideration initially received) net of (i) selling expenses (including
reasonable brokers' fees or commissions, legal, accounting and other
professional and transactional fees, transfer and similar taxes and
Borrower's good faith estimate of income taxes paid or payable in
connection with such sale); (ii) amounts provided as a reserve, in
accordance with GAAP, against (x) any liabilities under any indemnification
obligations associated with such Asset Sale or (y) any other liabilities
retained by any Loan Party associated with the assets sold in such Asset
Sale (provided that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash
Proceeds); (iii) Borrower's good faith estimate of payments required to be
made with respect to unassumed liabilities relating to the assets sold
within 360 days of such Asset Sale (provided that, to the extent such cash
proceeds are not used to make payments in respect of such unassumed
liabilities within 360 days of such Asset Sale, such cash proceeds shall
constitute Net Cash Proceeds); and (iv) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for
borrowed money which is secured by a Lien on the asset sold in such Asset
Sale (so long as such Lien was permitted to encumber such asset under the
Loan Documents at the time of such sale) and which is repaid with such
proceeds (other than any such Indebtedness assumed by the purchaser of such
asset);
(b) with respect to any Debt Issuance or any issuance or sale of
Equity Interests, the cash proceeds thereof, net of customary fees,
commissions, costs and other expenses incurred in connection therewith; and
(c) with respect to any Casualty Event, the cash insurance proceeds,
condemnation awards and other compensation received in respect thereof, net
of all reasonable costs and expenses incurred in connection with the
collection of such proceeds, awards or other compensation in respect of
such Casualty Event.
"Notes" shall mean any notes evidencing the Term Loans, Revolving Loans or
Swingline Loans issued pursuant to this Agreement, if any, substantially in the
form of Exhibit X-0, X-0 xx X-0.
"Obligations" shall mean (a) obligations of Borrower and any and all of the
other Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by Borrower and any and all of
the other Loan Parties under this Agreement in respect of any Letter of Credit,
when and as due, including payments in respect of Reimbursement Obligations,
interest thereon and obligations to provide cash collateral and (iii) all other
monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Borrower and any and all of the other Loan
Parties under this Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of Borrower and each Loan Party under or pursuant to this Agreement and the
other Loan Documents, (c) the due and punctual payment and performance of all
obligations of Borrower and any and all of the other Loan Parties under each
Hedging Obligation relating to the Loans and up to $50 million of Senior
Subordinated Notes entered into with any counterparty that was
-23-
a Lender or an Affiliate of a Lender at the time such Hedging Obligation was
entered into and (d) the due and punctual payment and performance of all
obligations in respect of overdrafts and related liabilities owed to any Lender,
any Affiliate of a Lender, the Administrative Agent or the Collateral Agent
arising from treasury, depositary and cash management services or in connection
with any automated clearinghouse transfer of funds.
"Offering Memorandum" means the offering memorandum dated October 10, 2003
pursuant to which the Senior Subordinated Notes are being offered.
"Officers' Certificate" shall mean a certificate executed by the chairman
of the Board of Directors of Borrower (if an officer of Borrower), the chief
executive officer or the president of Borrower and one of the Financial
Officers, each in his or her official (and not individual) capacity.
"Organizational Documents" shall mean, with respect to any person, (i) in
the case of any corporation, the certificate of incorporation and by-laws (or
similar documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.
"Other Taxes" shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
(including interest, fines, penalties and additions to tax) arising from any
payment made or required to be made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Participant" shall have the meaning assigned to such term in Section
11.04(e).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Perfection Certificate" shall mean a certificate in the form of Exhibit
I-1 or any other form approved by the Collateral Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.
"Perfection Certificate Supplement" shall mean a certificate supplement in
the form of Exhibit I-2 or any other form approved by the Collateral Agent.
"Permitted Acquisition" shall mean, with respect to Borrower or any
Subsidiary Guarantor, 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, if each
of the following conditions are met:
(i) no Default then exists or would result therefrom;
(ii) after giving effect to such acquisition on a Pro Forma Basis, (A)
Borrower shall be in compliance with all covenants set forth in Section
6.08 as of the most recent Test Period (assuming, for purposes of Section
6.08, that such acquisition, and all other Permitted Acquisitions
consummated since the first day of the relevant Test Period for each of the
financial covenants set forth in Section 6.08 ending on or prior to the
date of such acquisition, had occurred on
-24-
the first day of such relevant Test Period), and (B) unless expressly
approved by the Administrative Agent, Borrower shall have generated
positive cash flow for the Test Period most recently ended prior to the
date of consummation of such acquisition;
(iii) no Company shall, in connection with any such acquisition,
assume or remain liable with respect to any Indebtedness of the related
seller or the business, person or assets acquired, except to the extent
permitted under Section 6.01;
(iv) the acquired person shall be engaged in a business of the type
that Borrower and the Subsidiaries are permitted to be engaged in under
Section 6.13 and the property acquired in connection with any such
acquisition shall be made subject to the Lien of the Security Documents and
shall be free and clear of any Liens, other than Permitted Liens;
(v) the Board of Directors of the person to be acquired shall not have
indicated publicly its opposition to the consummation of such acquisition;
(vi) all transactions in connection therewith shall be consummated in
accordance with all applicable laws of all applicable Governmental
Authorities;
(vii) with respect to any acquisition involving Acquisition
Consideration of more than $10.0 million, unless the Administrative Agent
shall otherwise agree, Borrower shall have provided the Administrative
Agent and the Lenders with (A) historical financial statements for the last
three fiscal years of the person or business to be acquired (audited if
available without undue cost or delay) and unaudited financial statements
thereof for the most recent interim period which are available, (B)
reasonably detailed projections for the succeeding five years pertaining to
the person or business to be acquired and updated projections for Borrower
after giving effect to such acquisition, (C) a reasonably detailed
description of all material information relating thereto and copies of all
material documentation pertaining to such acquisition, and (D) all such
other information and data relating to such acquisition or the person or
business to be acquired as may be reasonably requested by the
Administrative Agent or the Required Lenders;
(viii) at least 10 Business Days prior to the proposed date of
consummation of the acquisition, Borrower shall have delivered to the
Agents and the Lenders an Officers' Certificate certifying that (A) such
acquisition complies with this definition (which shall have attached
thereto reasonably detailed backup data and calculations showing such
compliance), and (B) such acquisition could not reasonably be expected to
result in a Material Adverse Effect; and
(ix) the Acquisition Consideration (exclusive of any amount financed
by an Excluded Issuance) for such acquisition shall not exceed $15.0
million, and the aggregate amount of the Acquisition Consideration
(exclusive of any amounts financed by Excluded Issuances) for all Permitted
Acquisitions since the Closing Date shall not exceed $40.0 million;
provided that any Equity Interests constituting all or a portion of such
Acquisition Consideration shall not have a cash dividend requirement on or
prior to Term Loan Maturity Date.
"Permitted Collateral Liens" means (i) Contested Liens (as defined in the
Security Agreements) and (ii) Permitted Liens (other than any Lien pursuant to
Section 6.02(l)).
"Permitted Holders" shall mean (a) SKM Equity Fund III, L.P. and its
Control Investment Affiliates, (b) Trimaran Fund II, L.L.C. and its Control
Investment Affiliates, (c) Xx. Xxxx Xxxxxx and his Related Parties and (d) for
so long as Borrower or Holdings shall be a limited partnership, the General
Partner.
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"Permitted Liens" shall have the meaning assigned to such term in Section
6.02.
"Permitted Tax Distributions" means
(1) in the event that Borrower is treated as a corporation for federal
income tax purposes, payments, dividends or distributions to Holdings in
order to pay consolidated or combined federal, state or local taxes to the
extent that such taxes are attributable to the income of Borrower and its
Subsidiaries; or
(2) in the event that Borrower is not treated as a corporation for
federal income tax purposes, payments, dividends or distributions to the
then current or former equity holders of Borrower in an amount equal to,
with respect to any taxable year of Borrower, the product of (x) the
highest combined federal, state (or provincial) and local statutory tax
rate (after taking into account the deductibility of state (or provincial)
and local income tax for federal income tax purposes) applicable to any
direct (or, where the direct equity holder is a pass-through entity,
indirect) equity holder of Borrower multiplied by (y) the taxable income of
Borrower and its Subsidiaries determined on the basis that Borrower is a
partnership for federal income tax purposes for such year; provided,
however, that the combined tax rate in clause (x) of this paragraph shall
not exceed the highest combined tax rate that shall be applicable to a
direct (or, where the direct equity holder is a pass-through entity,
indirect) equity holder of Borrower residing only in the United States for
tax purposes;
minus, in the case of clauses (1) and (2) of this definition, any federal, state
and local income taxes paid or payable by Borrower and its Subsidiaries directly
to taxing authorities on behalf of their direct or indirect equity holders in
respect of the income tax liability of such equity holders, if any.
"person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof, in any case, whether
acting in a personal, fiduciary or other capacity.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA which is maintained or contributed to by
any Company or its ERISA Affiliate.
"Preferred Stock" shall mean, with respect to any person, any and all
preferred or preference Equity Interests (however designated) of such person
whether now outstanding or issued after the Closing Date.
"Preferred Stock Issuance" shall mean the issuance or sale by Holdings or
any of its Subsidiaries of any Preferred Stock after the Closing Date (other
than (x) as permitted by Section 6.11 or (y) any Excluded Issuance).
"Premises" shall have the meaning assigned thereto in the applicable
Mortgage.
"Pro Forma Basis" shall mean on a basis in accordance with GAAP and
Regulation S-X and otherwise reasonably satisfactory to the Administrative
Agent.
"Pro Rata Percentage" of any Revolving Lender at any time shall mean the
percentage of the total Revolving Commitments of all Revolving Lenders
represented by such Lender's Revolving Commitment.
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"property" shall mean any right, title 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 and whether now in existence or owned or hereafter
entered into or acquired, including, without limitation, all Real Property.
"Purchase Money Obligation" shall mean, for any person, the obligations of
such person in respect of Indebtedness (including capital leases) incurred for
the purpose of financing all or any part of the purchase price of any property
(including Equity Interests of any person) or the cost of installation,
construction or improvement of any property or assets and any refinancing
thereof; provided, however, that such Indebtedness is incurred within 180 days
after such acquisition of such property by such person.
"Qualified Capital Stock" of any person shall mean any Equity Interests of
such person that are not Disqualified Capital Stock.
"Real Property" shall mean, collectively, all right, title and interest
(including any leasehold estate) in and to any and all parcels of or interests
in real property owned, leased or operated by any person, whether by lease,
license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.
"Refinancing" shall mean the repayment in full and the termination of any
commitment to make extensions of credit under all of the outstanding
indebtedness of Holdings and its Subsidiaries listed on Schedule 1.01(b).
"Register" shall have the meaning assigned to such term in Section
11.04(c).
"Registration Rights Agreement" means the registration rights agreement
dated as of the Closing Date among Borrower, Finance Subsidiary, UBS Securities
LLC and Wachovia Capital Markets, LLC.
"Regulation D" shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation S-X" shall mean Regulation S-X promulgated under the Securities
Act.
"Regulation T" shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Reimbursement Obligations" shall mean Borrower's obligations under Section
2.18(e) to reimburse LC Disbursements.
"Related Party" means any family member of Xx. Xxxx Xxxxxx or any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners or owners of which are Xx. Xxxx Xxxxxx and/or any members of his
family.
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"Release" shall mean any spilling, leaking, seepage, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the Environment.
"Required Lenders" shall mean, at any time, Lenders having Loans, LC
Exposure and unused Revolving and Term Loan Commitments representing more than
50% of the sum of all Loans outstanding, LC Exposure and unused Revolving and
Term Loan Commitments at such time.
"Requirements of Law" shall mean, collectively, any and all requirements of
any Governmental Authority including any and all laws, ordinances, rules,
regulations or similar statutes or case law.
"Response" shall mean (a) "response" as such term is defined in CERCLA, 42
U.S.C. (S) 9601(24), and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to: (i) clean up, remove, treat, xxxxx or in
any other way address any Hazardous Material in the environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection
with, or as a precondition to, clause (i) or (ii) above.
"Responsible Officer" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof with responsibility for the administration of the obligations of such
person in respect of this Agreement.
"Revolving Availability Period" shall mean the period from and including
the Closing Date to but excluding the earlier of the Business Day preceding the
Revolving Maturity Date and the date of termination of the Revolving
Commitments.
"Revolving Borrowing" shall mean a Borrowing comprised of Revolving Loans.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans hereunder up to the
amount set forth on Schedule I to the Lender Addendum executed and delivered by
such Lender, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.07 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
11.04. The aggregate amount of the Lenders' Revolving Commitments on the Closing
Date is $25,000,000.
"Revolving Exposure" shall mean, with respect to any Lender at any time,
the aggregate principal amount at such time of all outstanding Revolving Loans
of such Lender, plus the aggregate amount at such time of such Lender's LC
Exposure, plus the aggregate amount at such of such Lender's Swingline Exposure.
"Revolving Lender" shall mean a Lender with a Revolving Commitment.
"Revolving Loans" shall mean a Loan made by the Lenders to Borrower
pursuant to Section 2.01(b). Each Revolving Loan shall either be an ABR
Revolving Loan or a Eurodollar Revolving Loan.
"Revolving Maturity Date" shall mean the fifth anniversary of the Closing
Date, or if such day is not a Business Day, the immediately preceding Business
Day.
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"Rollover Equity" shall mean the common equity interests to be exchanged by
members of management of Borrower for common equity interests in Holdings in an
amount not less than $3.0 million on the terms and conditions set forth in the
Acquisition Documents.
"Sale and Leaseback Transaction" has the meaning assigned to such term in
Section 6.03.
"Secured Parties" shall mean, collectively, the Administrative Agent, the
Collateral Agent, each other Agent, the Lenders and each party to a Hedging
Obligation relating to the Loans if at the date of entering into such Hedging
Obligation such person was a Lender or an Affiliate of a Lender and such person
executes and delivers to the Administrative Agent a letter agreement in form and
substance acceptable to the Administrative Agent pursuant to which such person
(i) appoints the Collateral Agent as its agent under the applicable Loan
Documents and (ii) agrees to be bound by the provisions of Sections 10.03 and
10.09.
"Securities Act" shall mean the Securities Act of 1933.
"Securities Collateral" has the meaning assigned to such term in the
Security Agreements.
"Security Agreement Collateral" shall mean all property pledged or granted
as collateral pursuant to the Security Agreements delivered on the Closing Date
or thereafter pursuant to Section 5.10.
"Security Agreements" means the collective reference to the U.S. Security
Agreement and the Canadian Security Agreement.
"Security Documents" shall mean the Security Agreements, the Mortgages and
each other security document or pledge agreement delivered in accordance with
applicable local or foreign law to grant a valid, perfected security interest in
any property as Collateral for the Obligations, and all UCC or other financing
statements or instruments of perfection required by this Agreement, the Security
Agreements, any Mortgage or any such other security document or pledge agreement
to be filed with respect to the security interests in property and fixtures
created pursuant to the Security Agreements or any Mortgage and any other
document or instrument utilized to pledge as collateral for the Obligations any
property of whatever kind or nature.
"Seller" shall have the meaning assigned to such term in the first recital
hereto.
"Senior Subordinated Note Agreement" shall mean any indenture, note
purchase agreement or other agreement pursuant to which the Senior Subordinated
Notes are issued, as in effect on the Closing Date and thereafter amended from
time to time in accordance with the requirements of this Agreement.
"Senior Subordinated Note Documents" shall mean the Senior Subordinated
Notes, the Senior Subordinated Note Agreement, the Senior Subordinated Note
Guarantees and all other documents executed and delivered with respect to the
Senior Subordinated Notes or the Senior Subordinated Note Agreement.
"Senior Subordinated Note Guarantees" shall mean the guarantees of Holdings
and the Subsidiary Guarantors (other than Finance Subsidiary) pursuant to the
Senior Subordinated Note Agreement.
"Senior Subordinated Notes" shall mean (i) the $150 million in aggregate
principal amount of 9% senior subordinated notes due 2011 issued by Borrower and
Finance Subsidiary pursuant to the Senior Subordinated Note Agreement and (ii)
any registered notes issued by Borrower and Finance Subsidiary in exchange for
the notes referred to in clause (i) of this definition.
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"Sponsors" shall mean, collectively, SKM Equity Fund III, L.P. and Trimaran
Fund II, L.L.C.
"Standby Letter of Credit" shall mean any standby letter of credit or
similar instrument issued for the purpose of supporting (a) workers'
compensation liabilities of Borrower or any of its Subsidiaries (or, in the case
of the Standby Letter of Credit to be issued on the Closing Date (as such Letter
of Credit may be renewed, extended or replaced in accordance with the provisions
of the Loan Documents), to the extent Borrower is jointly and severally liable
therefor, workers' compensation liabilities of Barjan Products, L.L.C. in
respect of occurrences on or prior to June 30, 2003), (b) the obligations of
third-party insurers of Borrower or any of its Subsidiaries arising by virtue of
the laws of any jurisdiction requiring third-party insurers to obtain such
letters of credit, (c) performance, payment, deposit or surety obligations of
Borrower or any of its Subsidiaries if required by law or governmental rule or
regulation or in accordance with custom and practice in the industry or (d)
Indebtedness of Borrower or any of its Subsidiaries permitted to be incurred
under Section 6.01.
"Statutory Reserves" shall mean, for any Interest Period for any Eurodollar
Borrowing, 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 "Eurodollar liabilities" (as such term is used in Regulation D).
Eurodollar Borrowings shall be deemed to constitute Eurodollar 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
Lender under Regulation D.
"Subordinated Indebtedness" means Indebtedness of Borrower or any Guarantor
that is by its terms subordinated in right of payment to the Obligations of
Borrower and such Guarantor, as applicable, including the Senior Subordinated
Notes.
"Subsidiary" shall mean, with respect to any person (the "parent") at any
date, (i) any person the accounts of which would be consolidated with those of
the parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, (ii) any other
corporation, limited liability company, association or other business entity of
which securities or other ownership interests representing more than 50% of the
voting power of all Equity Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the Board of Directors thereof
are, as of such date, owned, controlled or held by the parent and/or one or more
subsidiaries of the parent, (iii) any partnership (a) the sole general partner
or the managing general partner of which is the parent or a subsidiary of the
parent or (b) the only general partners of which are the parent and/or one or
more subsidiaries of the parent and (iv) any other person that is otherwise
Controlled by the parent and/or one or more subsidiaries of the parent. Unless
the context requires otherwise, "Subsidiary" refers to a Subsidiary of Borrower.
"Subsidiary Guarantor" shall mean each Subsidiary listed on Schedule
1.01(c), and each other Subsidiary that is or becomes a party to this Agreement
pursuant to Section 5.10.
"Successful Syndication" shall have the meaning given to such term in the
Fee Letter.
"Survey" shall mean a survey of any Mortgaged Property (and all
improvements thereon) which is (a)(i) prepared by a surveyor or engineer
licensed to perform surveys in the state where such Mortgaged 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 six months prior to
such date of delivery any exterior construction on the site of such Mortgaged
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
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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, the Collateral Agent and the
Title Company, (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 and (v) sufficient for the
Title Company to remove all standard survey exceptions from the title insurance
policy (or commitment) relating to such Mortgaged Property and issue the
endorsements of the type required by Section 4.01(n)(iii) or (b) otherwise
acceptable to the Collateral Agent.
"Swingline Commitment" shall mean the commitment of the Swingline Lender to
make loans pursuant to Section 2.17, as the same may be reduced from time to
time pursuant to Section 2.07 or Section 2.17.
"Swingline Exposure" shall mean at any time the aggregate principal amount
at such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.
"Swingline Lender" shall have the meaning assigned to such term in the
preamble hereto.
"Swingline Loan" shall mean any loan made by the Swingline Lender pursuant
to Section 2.17.
"Syndication Agent" shall have the meaning assigned to such term in the
preamble hereto.
"Tax Return" shall mean all returns, statements, filings, attachments and
other documents or certifications required to be filed in respect of Taxes.
"Taxes" shall mean (i) any and all present or future taxes, duties, levies,
imposts, assessments, deductions, withholdings or other similar charges, whether
computed on a separate, consolidated, unitary, combined or other basis and any
and all liabilities (including interest, fines, penalties or additions to tax)
with respect to the foregoing, and (ii) any transferee, successor, joint and
several, contractual or other liability (including, without limitation,
liability pursuant to Treasury Regulation (S)1.1502-6 (or any similar provision
of state, local or non-U.S. law)) in respect of any item described in clause
(i).
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the Closing
Date in the amount set forth on Schedule I to the Lender Addendum executed and
delivered by such Lender. The initial aggregate amount of the Lenders' Term Loan
Commitments is $45,000,000.
"Term Loan Lender" shall mean a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"Term Loan Maturity Date" shall mean the sixth anniversary of the Closing
Date, or if such day is not a Business Day, the immediately preceding Business
Day.
"Term Loan Repayment Date" shall have the meaning assigned to such term in
Section 2.09(a).
"Term Loans" shall mean the term loans made to Borrower pursuant to Section
2.01(a). Each Term Loan shall be either an ABR Term Loan or a Eurodollar Term
Loan.
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"Test Period" shall mean, at any time, the four consecutive fiscal quarters
of Borrower then last ended (in each case taken as one accounting period) for
which financial statements have been or are required to be delivered pursuant to
Section 5.01(a) or (b).
"Title Company" shall mean any title insurance company as shall be retained
by Borrower and reasonably acceptable to the Administrative Agent.
"Title Policy" shall have the meaning assigned to such term in Section
4.01(o).
"Transaction Documents" shall mean the Acquisition Documents, the Senior
Subordinated Note Documents and the Loan Documents.
"Transactions" shall mean, collectively, the transactions to occur on or
prior to the Closing Date pursuant to the Transaction Documents, including (a)
the consummation of the Acquisition; (b) the execution, delivery and performance
of the Loan Documents and the initial borrowings hereunder; (c) the Refinancing;
(d) the Equity Financing; (e) the exchange of the Rollover Equity; (f) the
effectiveness of the Xxxxxx Employment; (g) the making of the Xxxxxx Investment;
(h) the consummation of the Winnipeg Contribution; and (i) the payment of all
fees and expenses to be paid on or prior to the Closing Date and owing in
connection with the foregoing.
"Transferred Guarantor" shall have the meaning assigned to such term in
Section 7.09.
"Type," when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR Rate or the Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code as in effect from time to time
in any applicable state or jurisdiction.
"United States" shall mean the United States of America.
"U.S. Security Agreement" shall mean a security agreement substantially in
the form of Exhibit J-1 among each Loan Party that is incorporated or organized
in a jurisdiction that is the United States, any State thereof or the District
of Columbia and Collateral Agent for the benefit of the Secured Parties.
"Voting Stock" shall mean, with respect to any person, any class or classes
of Equity Interests pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect a majority of the Board of
Directors of such person.
"Wholly Owned Subsidiary" shall mean, as to any person, (a) any corporation
100% of whose capital stock (other than directors' qualifying shares) is at the
time owned by such person and/or one or more Wholly Owned Subsidiaries of such
person and (b) any partnership, association, joint venture, limited liability
company or other entity in which such person and/or one or more Wholly Owned
Subsidiaries of such person have a 100% equity interest at such time.
"Winnipeg Contribution" the contribution by Xx. Xxxx Xxxxxx and his family
(or entities controlled by them) to Borrower of all of the Equity Interests of
Norcraft Canada Corporation, the owner of the manufacturing facility being built
by such persons that is under construction in Winnipeg, Canada in exchange for
common Equity Interests in Holdings.
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"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a
"Eurodollar Revolving Loan"). Borrowings also may be classified and referred to
by Class (e.g., a "Revolving Borrowing", "Term Loan Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The term "manifest
error" shall be deemed to include any clearly demonstrable error whether or not
obvious on the face of document containing such error. The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any Loan
Document, agreement, instrument or other document herein shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all financial statements to be delivered pursuant to this
Agreement shall be prepared in accordance with GAAP as in effect from time to
time and all terms of an accounting or financial nature shall be construed and
interpreted in accordance with GAAP, as in effect on the date hereof unless
otherwise agreed to by Borrower and the Required Lenders.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly:
(a) to make a Term Loan to Borrower on the Closing Date in a principal
amount not to exceed its Term Loan Commitment; and
(b) to make Revolving Loans to Borrower, at any time and from time to
time after the Closing Date until the earlier of the Revolving Maturity
Date and the termination of the Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in such Lender's Revolving Exposure
exceeding such Lender's Revolving Commitment.
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Amounts paid or prepaid in respect of Term Loans may not be reborrowed.
Within the limits set forth in clause (b) above and subject to the terms,
conditions and limitations set forth herein, Borrower may borrow, pay or prepay
and reborrow Revolving Loans.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall be
made as part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their applicable Commitments; provided that the failure of any
Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). Except for Loans deemed made pursuant to Section
2.18(e), Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $500,000 and not less than $1,000,000
or (ii) equal to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.11 and 2.12, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as Borrower may request pursuant to
Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
Borrower to repay such Loan in accordance with the terms of this Agreement.
Borrowings of more than one Type may be outstanding at the same time; provided
that Borrower shall not be entitled to request any Borrowing that, if made,
would result in more than ten Eurodollar Borrowings outstanding hereunder at any
one time. For purposes of the foregoing, Borrowings having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.18(e), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account as directed by Borrower in the applicable
Borrowing Request maintained with the Administrative Agent or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, each of such Lender and Borrower
severally agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to Borrower until the date such amount is repaid
to the Administrative Agent at (i) in the case of Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount shall constitute such Lender's Loan
as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Revolving
Maturity Date or the Term Loan Maturity Date, as applicable.
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SECTION 2.03. Borrowing Procedure. To request a Revolving Borrowing or Term
Borrowing, Borrower shall deliver, by hand delivery or telecopy, a duly
completed and executed Borrowing Request to the Administrative Agent (i) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing or (ii) in the
case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the
date of the proposed Borrowing. Each Borrowing Request shall be irrevocable and
shall specify the following information in compliance with Section 2.02:
(a) whether the requested Borrowing is to be a Revolving Borrowing or
Term Loan Borrowing;
(b) the aggregate amount of such Borrowing;
(c) the date of such Borrowing, which shall be a Business Day;
(d) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(e) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; provided that at any time on or
before the earlier of (x) the date on which the Lead Arranger shall have
notified Borrower that a Successful Syndication has been achieved and (y)
the thirtieth day following the Closing Date, the Interest Period shall be
seven days;
(f) the location and number of Borrower's account to which funds are
to be disbursed, which shall comply with the requirements of Section 2.02;
and
(g) that the conditions set forth in Sections 4.02(b)-(e) are
satisfied as of the date of the notice.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then Borrower shall be
deemed to have selected an Interest Period of one month's duration (subject to
the proviso in clause (e) above). Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender's Loan to be
made as part of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Term Loan Lender, the principal amount of each Term Loan of such Term
Loan Lender as provided in Section 2.09, (ii) to the Administrative Agent for
the account of each Revolving Lender, the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date and (iii) to the
Swingline Lender the then unpaid principal amount of each Swingline Loan on the
earlier of the Revolving Maturity Date and the first date after such Swingline
Loan is made that is the 15th or last day of a calendar month and is at least
two Business Days after such Swingline Loan is made; provided that on each date
that a Revolving Borrowing is made, Borrower shall repay all Swingline Loans
that were outstanding on the date such Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
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(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type and Class thereof
and the Interest Period applicable thereto; (ii) the amount of any principal or
interest due and payable or to become due and payable from Borrower to each
Lender hereunder; and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall, in the absence of manifest error, be prima facie evidence
of the existence and amounts of the obligations therein recorded; provided that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligations of Borrower
to repay the Loans in accordance with their terms.
(e) Any Lender may request that Loans of any Class made by it be evidenced
by a promissory note. In such event, Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) in the form
of Exhibit X-0, X-0 xx X-0, as the case may be. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 11.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.05. Fees.
(a) Commitment Fee. Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee (a "Commitment Fee"), equal to the
Applicable Fee per annum on the average daily unused amount of each Commitment
of such Lender during the period from and including the Closing Date to but
excluding the date on which such Commitment terminates. Accrued Commitment Fees
shall be payable in arrears (i) on the last day of March, June, September and
December of each year (or if such last day is not a Business Day, the Business
Day immediately preceding such last day), commencing on the first such date to
occur after the date hereof, and (ii) on the date on which the Revolving
Commitments terminate. All Commitment Fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
Commitment Fees, a Revolving Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose).
(b) Administrative Agent Fees. Borrower agrees to pay to the Administrative
Agent, for its own account, the administrative fees set forth in the Fee Letter
or such other fees payable in the amounts and at the times separately agreed
upon between Borrower and the Administrative Agent (the "Administrative Agent
Fees").
(c) LC and Fronting Fees. Borrower agrees to pay (i) to the Administrative
Agent for the account of each Revolving Lender a participation fee ("LC
Participation Fee") with respect to its participations in Letters of Credit,
which shall accrue at a rate equal to the Applicable Margin from time to time
used to determine the interest rate on Eurodollar Revolving Loans pursuant to
Section 2.06 on the average daily amount of such Lender's LC Exposure (excluding
any portion thereof attributable to Reimbursement Obligations) during the period
from and including the Closing Date to but excluding the later of the date on
which such Lender's Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee ("Fronting Fee"), which shall accrue at the rate of 0.25% per annum on the
average daily amount of the LC Exposure (excluding any portion thereof
attributable to Reimbursement Obligations) during the period from and including
the Closing Date to but excluding the later of the date of termination of the
Revolving Commitments and the
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date on which there ceases to be any LC Exposure, as well as the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. LC Participation Fees
and Fronting Fees shall be payable in arrears (i) on the last day of March,
June, September and December of each year (or if such last day is not a Business
Day, the Business Day immediately preceding such last day), commencing on the
first such date to occur after the date hereof, and (ii) on the date on which
the Revolving Commitments terminate and any such fees accruing after the date on
which the Revolving Commitments terminate shall be payable on demand. Any other
fees payable to the Issuing Bank pursuant to this paragraph shall be payable
within 10 days after demand. All LC Participation Fees and Fronting Fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that Borrower shall pay the Fronting Fees directly to
the Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
2.06(c), the Loans comprising each ABR Borrowing, including each Swingline Loan,
shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Margin in effect from time to time.
(b) Subject to the provisions of Section 2.06(c), the Loans comprising each
Eurodollar Borrowing shall bear interest at a rate per annum equal to the
Adjusted LIBOR Rate for the Interest Period in effect for such Borrowing plus
the Applicable Margin in effect from time to time.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall, to the extent permitted by applicable law, bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section or (ii) in the case of any
other amount, 2% plus the rate applicable to ABR Revolving Loans as provided in
paragraph (a) of this Section 2.06.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to Section 2.06(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan or a Swingline Loan, in each case, prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBOR Rate shall be determined by the Administrative Agent
in accordance with the provisions of this Agreement and such determination shall
be conclusive absent manifest error.
SECTION 2.07. Termination and Reduction of Commitments. (a) The Term Loan
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
the Closing Date. The Re-
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volving Commitments, the Swingline Commitment, and the LC Commitment shall
automatically terminate on the Revolving Maturity Date.
(b) Borrower may at any time terminate, or from time to time reduce, the
Commitments of any Class; provided that (i) each reduction of the Commitments of
any Class shall be in an amount that is an integral multiple of $500,000 and not
less than $1,000,000 and (ii) the Revolving Commitments shall not be terminated
or reduced if, after giving effect to any concurrent prepayment of the Revolving
Loans in accordance with Section 2.10, the sum of the Revolving Exposures would
exceed the aggregate amount of Revolving Commitments.
(c) Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section 2.07(c)
at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by Borrower pursuant to
this Section 2.07(c) shall be irrevocable. Any termination or reduction of the
Commitments of any Class shall be permanent. Each reduction of the Commitments
of any Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.
SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing and Term
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. Borrower may elect different options
with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. Notwithstanding anything to the contrary,
Borrower shall not be entitled to request any conversion or continuation that,
if made, would result in more than ten Eurodollar Borrowings outstanding
hereunder at any one time. This Section 2.08 shall not apply to Swingline
Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if Borrower were requesting a
Revolving Borrowing or Term Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request substantially in the form of Exhibit D.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, or if outstanding Borrowings are being combined, allocation to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
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(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period"; provided that at any time on or before the earlier
of (x) the date on which the Lead Arranger shall have notified Borrower
that a Successful Syndication has been achieved and (y) the thirtieth day
following the Closing Date, the Interest Period shall be seven days.
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then Borrower shall be deemed to have selected
an Interest Period of one month's duration (subject to the proviso in clause
(iv) above).
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If an Interest Election Request with respect to a Eurodollar Borrowing
is not timely delivered prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies Borrower, then, after the occurrence and during
the continuance of such Event of Default (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.09. Amortization of Term Borrowings. (a) Borrower shall pay to
the Administrative Agent, for the account of the Lenders, on the dates set forth
on Annex II, or if any such date is not a Business Day, on the immediately
preceding Business Day (each such date being a "Term Loan Repayment Date"), a
principal amount of the Term Loans (as adjusted from time to time pursuant to
Section 2.10(h)) equal to the amount set forth on Annex II for such date,
together in each case with accrued and unpaid interest on the principal amount
to be paid to but excluding the date of such payment.
(b) To the extent not previously paid, all Term Loans shall be due and
payable on the Term Loan Maturity Date.
SECTION 2.10. Optional and Mandatory Prepayments of Loans.
(a) Optional Prepayments. Borrower shall have the right at any time and
from time to time to prepay any Borrowing, in whole or in part, subject to the
requirements of this Section 2.10; provided that each partial prepayment shall
be in an amount that is an integral multiple of $500,000 and not less than
$1,000,000.
(b) Revolving Loan Prepayments. (i) In the event of the termination of all
the Revolving Commitments, Borrower shall, on the date of such termination,
repay or prepay all its outstanding Revolving Borrowings and all outstanding
Swingline Loans and replace all outstanding Letters of Credit and/or deposit an
amount equal to the LC Exposure in the LC Sub-Account.
(ii) In the event of any partial reduction of the Revolving Commitments,
then (x) at or prior to the effective date of such reduction, the Administrative
Agent shall notify Borrower and the Revolving Lenders of the sum of the
Revolving Exposures after giving effect thereto and (y) if the sum of the Re-
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volving Exposures would exceed the aggregate amount of Revolving Commitments
after giving effect to such reduction, then Borrower shall, on the date of such
reduction, first, repay or prepay Swingline Loans, second, repay or prepay
Revolving Borrowings and third, replace or cash collateralize outstanding
Letters of Credit in accordance with the procedures set forth in Section
2.18(i), in an amount sufficient to eliminate such excess.
(iii) In the event that the sum of all Lenders' Revolving Exposures exceeds
the Revolving Commitments then in effect, Borrower shall, without notice or
demand, immediately first, repay or prepay Swingline Loans, second, repay or
prepay Revolving Borrowings, and third, replace or cash collateralize
outstanding Letters of Credit in accordance with the procedures set forth in
Section 2.18(i).
(iv) In the event that the aggregate LC Exposure exceeds the LC Commitment
then in effect, Borrower shall, without notice or demand, immediately replace or
cash collateralize outstanding Letters of Credit in accordance with the
procedures set forth in Section 2.18(i).
(c) Asset Sales. Not later than five Business Days following the receipt of
any Net Cash Proceeds of any Asset Sale, Borrower shall apply 100% of the Net
Cash Proceeds received with respect thereto to make prepayments in accordance
with Sections 2.10(h) and (i); provided that:
(i) no such prepayment shall be required under this Section 2.10(c)(i)
with respect to (A) the disposition of assets which constitutes a Casualty
Event or (B) Asset Sales for fair market value resulting in no more than
$100,000 in Net Cash Proceeds per Asset Sale (or series of related Asset
Sales) and less than $1.0 million in Net Cash Proceeds in any fiscal year;
provided that clause (B) shall not apply in the case of any Asset Sale
described in clause (b) of the definition thereof; and
(ii) so long as no Default shall then exist or would arise therefrom
and the aggregate of such Net Cash Proceeds of Asset Sales shall not exceed
$10.0 million in any fiscal year of Borrower, such proceeds shall not be
required to be so applied on such date to the extent that (A) Borrower
shall have delivered an Officers' Certificate to the Administrative Agent
on or prior to such date stating that such Net Cash Proceeds shall be used
to, to the extent permitted by Section 6.13(b), purchase assets or acquire
100% of the Equity Interests of any person that owns such assets no later
than 360 days following the date of such Asset Sale (which Officers'
Certificate shall set forth the estimates of the proceeds to be so
expended); and (B) all such Net Cash Proceeds in excess of $2.5 million in
the aggregate at any time shall be held in the Collateral Account and
released therefrom only in accordance with the provisions of Article IX;
provided that if any portion of such Net Cash Proceeds not required to be
applied to make prepayments shall not be utilized to purchase replacement
assets or acquire such Equity Interests within such 360-day period, such
unused portion shall be applied on the last day of such period as a
mandatory prepayment as provided in this Section 2.10(c); and provided,
further, that if the property subject to such Asset Sale constituted
Collateral, then all property purchased with the Net Cash Proceeds thereof
pursuant to this subsection shall be made subject to the Lien of the
applicable Security Documents in favor of the Collateral Agent, for its
benefit and for the benefit of the other Secured Parties in accordance with
Sections 5.10 and 5.11.
(d) Debt Issuance or Preferred Stock Issuance. Upon any Debt Issuance or
Preferred Stock Issuance after the Closing Date, Borrower shall make prepayments
in accordance with Sections 2.10(h) and (i) in an aggregate principal amount
equal to 100% of the Net Cash Proceeds of such Debt Issuance or Preferred Stock
Issuance, as the case may be.
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(e) Equity Issuance. Upon any Equity Issuance after the Closing Date,
Borrower shall make prepayments in accordance with Sections 2.10(h) and (i) in
an aggregate principal amount equal to 50% of the Net Cash Proceeds of such
Equity Issuance.
(f) Casualty Events. Not later than five Business Days following the
receipt of any Net Cash Proceeds from a Casualty Event with respect to any
property of Holdings or any of its Subsidiaries, Borrower shall apply an amount
equal to 100% of such Net Cash Proceeds to make prepayments in accordance with
Sections 2.10(h) and (i); provided that:
(i) so long as no Default shall then exist or arise therefrom, such
proceeds shall not be required to be so applied on such date to the extent
that (A) in the event such Net Cash Proceeds shall not exceed $10.0
million, Borrower shall have delivered an Officers' Certificate to the
Administrative Agent on or prior to such date stating that such proceeds
shall be used; or (B) in the event that such Net Cash Proceeds exceed $10.0
million, the Administrative Agent has elected by notice to Borrower on or
prior to such date to require such proceeds to be used, in each case, to
repair, replace or restore any property in respect of which such Net Cash
Proceeds were paid no later than 360 days following the date of receipt of
such proceeds (which Officers' Certificate shall set forth the estimates of
the proceeds to be so expended); provided that if the property subject to
such Casualty Event constituted Collateral under the Security Documents,
then all property purchased with the Net Cash Proceeds thereof pursuant to
this subsection shall be made subject to the Lien of the applicable
Security Documents in favor of the Collateral Agent, for its benefit and
for the benefit of the other Secured Parties in accordance with Sections
5.10 and 5.11;
(ii) all such Net Cash Proceeds in excess of $2.5 million in the
aggregate shall be held in the Collateral Account and released therefrom
only in accordance with the provisions of Article IX; and
(iii) if any portion of such Net Cash Proceeds shall not be so applied
within such 360-day period, such unused portion shall be applied on the
last day of such period as a mandatory prepayment as provided in this
Section 2.10(f).
(g) Excess Cash Flow. No later than the earlier of (i) 100 days after the
end of each fiscal year of Borrower, commencing with the fiscal year ending on
December 31, 2004, and (ii) the date on which the financial statements with
respect to such period are delivered pursuant to Section 5.01(a), Borrower shall
make prepayments in accordance with Sections 2.10(h) and (i) in an aggregate
principal amount equal to 50% of Excess Cash Flow for the fiscal year then
ended.
(h) Application of Prepayments. (i) Prior to any optional or mandatory
prepayment of Borrowings hereunder, Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (i) of this Section 2.10, subject to the
provisions of this Section 2.10(h). Any prepayments of Term Loans pursuant to
Section 2.10(c), (d), (e), (f) or (g) shall be applied to reduce scheduled
payments required under Section 2.09(a) on a pro rata basis among the payments
due on each Term Loan Repayment Date based on the payments then remaining to be
made on each such Term Loan Repayment Date and prepayments of Term Loans
pursuant to Section 2.10(a) shall be applied to reduce scheduled prepayments
required under Section 2.09(a), first, to such scheduled payments due with the
12 months following such prepayment and, second, on a pro rata basis among the
payments remaining to be made on each Term Loan Repayment Date. After
application of mandatory prepayments described above in this paragraph (h) and
to the extent there are mandatory prepayment amounts remaining after such
application, the Revolving Commitments shall be permanently reduced ratably
among the Revolving Lenders in accordance with their applicable Revolving
Commitments in an aggregate amount equal to such excess, and Borrower shall
comply with Section 2.10(b).
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(ii) Amounts to be applied pursuant to this Section 2.10 to the prepayment
of Term Loans and Revolving Loans shall be applied, as applicable, first to
reduce outstanding ABR Term Loans and ABR Revolving Loans, respectively. Any
amounts remaining after each such application shall be applied to prepay
Eurodollar Term Loans or Eurodollar Revolving Loans, as applicable.
Notwithstanding the foregoing, if the amount of any prepayment of Loans required
under this Section 2.10 shall be in excess of the amount of the ABR Loans at the
time outstanding (an "Excess Amount"), only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
immediately prepaid and, at the election of Borrower, the balance of such
required prepayment shall be either (A) deposited in the Collateral Account and
applied to the prepayment of Eurodollar Loans on the last day of the then
next-expiring Interest Period for Eurodollar Loans (with all interest accruing
thereon for the account of Borrower) or (B) prepaid immediately, together with
any amounts owing to the Lenders under Section 2.13; provided that (i) interest
in respect of such Excess Amount shall continue to accrue thereon at the rate
provided hereunder for the Loans which such Excess Amount is intended to repay
until such Excess Amount shall have been used in full to repay such Loans and
(ii) at any time while a Default has occurred and is continuing, the
Administrative Agent may, and upon written direction from the Required Lenders
shall, apply any or all proceeds then on deposit in the Collateral Account to
the payment of such Loans in an amount equal to such Excess Amount.
(i) Notice of Prepayment. Borrower shall notify the Administrative Agent
(and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 11:00 a.m., New York City time,
on the date of prepayment. Each such notice shall be irrevocable. Each such
notice shall specify the prepayment date, the principal amount of each Borrowing
or portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment. Promptly
following receipt of any such notice (other than a notice relating solely to
Swingline Loans), the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of an advance of a Borrowing of the same
Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.06.
SECTION 2.11. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBOR Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBOR Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Bor-
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rowing shall be ineffective and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.12. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBOR Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender, such
Lender's holding company or the Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Bank hereunder (whether of principal,
interest or otherwise), then Borrower will pay to such Lender or the Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered, it being understood that, to the extent
duplicative of the provisions of Section 2.15, this Section 2.12 shall not apply
to Taxes.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have reasonably achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.12 shall be delivered to Borrower and shall be conclusive absent
manifest error. Borrower shall pay such Lender or the Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 20 days after
receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section 2.12 shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation;
provided that Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section 2.12 for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided, further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall not begin earlier than the date of
effectiveness of the Change in Law.
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SECTION 2.13. Breakage Payments. In the event of (a) the payment or
prepayment, whether optional or mandatory, of any principal of any Eurodollar
Loan earlier than the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan or Term Loan on the date specified in any notice delivered pursuant hereto
or (d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by Borrower pursuant
to Section 2.16, then, in any such event, Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBOR Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section 2.13 shall be
delivered to Borrower and shall be conclusive absent manifest error. Borrower
shall pay such Lender the amount shown as due on any such certificate within 20
days after receipt thereof.
SECTION 2.14. Payments Generally; Pro Rata Treatment; Sharing of Setoffs.
(a) Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.12,
2.13 or 2.15, or otherwise) on or before the time expressly required hereunder
or under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without setoff or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.12, 2.13, 2.15 and 11.03 shall be made directly
to the persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Loan Document shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments under each Loan Document shall be
made in dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, Reimbursement
Obligations, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and Reimbursement Obligations then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and Reimbursement
Obligations then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise (including by exercise of its rights under Section 9.1(a)(viii) of
the U.S. Security Agreement), obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations
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in LC Disbursements or Swingline Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans,
Term Loans and participations in LC Disbursements and Swingline Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans, Term Loans and participations in
LC Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of Borrower in the amount of such
participation.
(d) Unless the Administrative Agent shall have received notice from
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that Borrower
will not make such payment, the Administrative Agent may assume that Borrower
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the case
may be, the amount due. In such event, if Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.02(c), 2.14(d), 2.17(d), 2.18(d), 2.18(e) or 11.03(d),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.15. Taxes. (a) Any and all payments by or on account of any
obligation of Borrower hereunder or under any other Loan Document shall be made
without set-off, counterclaim or other defense and free and clear of and without
deduction or withholding for any and all Indemnified Taxes; provided that if
Borrower shall be required by law to deduct any Indemnified Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions or withholdings applicable
to additional sums payable under this Section 2.15) the Administrative Agent,
Lender or Issuing Bank (as the case may be) receives an amount equal to the sum
it would have received had no such deductions or withholdings been made, (ii)
Borrower shall make such deductions or withholdings and (iii) Borrower shall pay
the full amount deducted or withheld to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
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(c) Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within 10 Business Days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, on or with respect
to any payment by or on account of any obligation of Borrower hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.15) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority; provided,
however, that the provisions of this sentence shall not require Borrower to
indemnify against any interest or penalties that result from the failure by the
Administrative Agent, any Lender or the Issuing Bank to timely file any tax
return relating to Indemnified Taxes or to pay when due the taxes shown on such
tax return; provided, further, however, that nothing in this sentence shall be
construed as preventing Borrower from contesting any tax which it believes was
wrongfully imposed so long as Borrower shall have first complied with the
provisions of this sentence. A certificate as to the amount of such payment or
liability delivered to Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by Borrower to a Governmental Authority, Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by Borrower as will permit such payments to be made without
withholding or at a reduced rate. In the case of a U.S. Borrower, each Foreign
Lender either (1) (i) agrees to furnish either U.S. Internal Revenue Service
Form W-8ECI or U.S. Internal Revenue Service Form W-8BEN (or successor form) and
(ii) agrees (for the benefit of Borrower and the Administrative Agent), to the
extent it may lawfully do so at such times, upon reasonable request by Borrower
or the Administrative Agent, to provide a new Form W-8ECI or Form W-8BEN (or
successor form) upon the expiration or obsolescence of any previously delivered
form to reconfirm any complete exemption from, or any entitlement to a reduction
in, U.S. federal withholding tax with respect to any interest payment hereunder
or (2) in the case of any such Foreign Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (i) agrees to furnish either (a) a
"Non-Bank Certificate" in a form acceptable to the Administrative Agent and
Borrower and two accurate and complete original signed copies of U.S. Internal
Revenue Service Form W-8BEN (or successor form) or (b) a U.S. Internal Revenue
Service Form W-8ECI (or successor form), certifying (in each case) to such
Foreign Lender's legal entitlement to an exemption or reduction from U.S.
federal withholding tax with respect to all interest payments hereunder and (ii)
agrees (for the benefit of Borrower and the Administrative Agent) to the extent
it may lawfully do so at such times, upon reasonable request by Borrower or the
Administrative Agent, to provide a new Form W-8BEN or W-8ECI (or successor form)
upon the expiration or obsolescence of any previously delivered form to
reconfirm any complete exemption from, or any entitlement to a reduction in,
U.S. federal withholding tax with respect to any interest payment hereunder.
(f) If the Administrative Agent or a Lender (or an assignee) determines in
its reasonable discretion that it has received a refund or credit in respect
thereof of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by Borrower or with respect to which Borrower has paid additional
amounts pursuant to this Section 2.15, it shall pay over such refund to Borrower
(but only to the extent of
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indemnity payments made, or additional amounts paid, by Borrower under this
Section 2.15 with respect to the Indemnified Taxes or the Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender (or assignee) and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided, however, that Borrower, upon the request of the Administrative Agent
or such Lender (or assignee), agrees to repay the amount paid over to Borrower
to the Administrative Agent or such Lender (or assignee) within a reasonable
time (not to exceed 20 days) after receipt of written notice that the
Administrative Agent or such Lender (or assignee) is required to repay such
refund to such Governmental Authority. Nothing contained in this Section 2.15(f)
shall require the Administrative Agent or any Lender (or assignee) to make
available its tax returns or any other information which it deems confidential
to Borrower or any other person. Notwithstanding anything to the contrary, in no
event will any Lender be required to pay any amount to Borrower the payment of
which would place such Lender in a less favorable net after-tax position than
such Lender would have been in had the additional amounts giving rise to such
refund of any Indemnified Taxes or Other Taxes never been paid in the first
place.
SECTION 2.16. Mitigation Obligations; Replacement of Lenders.
(a) Mitigation of Obligations. If any Lender requests compensation under
Section 2.12, or if Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.15, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.12 or 2.15, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.12, or if Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.15, or if any Lender defaults in its obligation to fund Loans
hereunder, then Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 11.04), all of its interests, rights and obligations under
this Agreement to an assignee selected by Borrower that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) Borrower shall have received the prior written
consent of the Administrative Agent (and, if a Revolving Commitment is being
assigned, the Issuing Bank and Swingline Lender), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder (assuming for this purpose that the
Loans of such Lender were being prepaid), from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.12 or payments required
to be made pursuant to Section 2.15, such assignment will result in a material
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling Borrower to
require such assignment and delegation cease to apply.
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SECTION 2.17. Swingline Loans.
(a) Swingline Commitment. Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans to Borrower from
time to time during the Revolving Availability Period, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of outstanding Swingline Loans exceeding $5.0 million or (ii)
the sum of the total Revolving Exposures exceeding the total Revolving
Commitments; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, Borrower may
borrow, repay and reborrow Swingline Loans.
(b) Swingline Loans. To request a Swingline Loan, Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 2:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. Each
Swingline Loan shall be an ABR Loan. The Administrative Agent will promptly
advise the Swingline Lender of any such notice received from Borrower. The
Swingline Lender shall make each Swingline Loan available to Borrower by means
of a credit to the general deposit account of Borrower with the Swingline Lender
(or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.18(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
Borrower shall not request a Swingline Loan if at the time of and immediately
after giving effect to such request a Default has occurred and is continuing.
Swingline Loans shall be made in minimum amounts of $100,000 and integral
multiples of $50,000 above such amount.
(c) Prepayment. Borrower shall have the right at any time and from time to
time to repay any Swingline Loan, in whole or in part, upon giving written or
telecopy notice (or telephone notice promptly confirmed by written, or telecopy
notice) to the Swingline Lender and to the Administrative Agent before 12:00
(noon), New York City time on the date of repayment at the Swingline Lender's
address for notices specified in the Swingline Lender's Administrative
Questionnaire. All principal payments of Swingline Loans shall be accompanied by
accrued interest on the principal amount being repaid to the date of payment.
(d) Participations. The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Pro Rata Percentage of such Swingline Loan or Loans. Each
Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the Swingline Lender, such Lender's Pro Rata Percentage of such Swingline Loan
or Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever (provided that such
payment shall not cause such Lender's Revolving Exposure to exceed such Lender's
Revolving Commitment). Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.02(c) with respect to Loans made by such
Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline
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Lender the amounts so received by it from the Revolving Lenders. The
Administrative Agent shall notify Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from
Borrower (or other party on behalf of Borrower) in respect of a Swingline Loan
after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve Borrower of any default in the
payment thereof.
SECTION 2.18. Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, Borrower
may request the Issuing Bank, and the Issuing Bank agrees, to issue Letters of
Credit for its own account or the account of a Subsidiary in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Revolving Availability Period (provided that
Borrower shall be a co-applicant, and be jointly and severally liable, with
respect to each Letter of Credit issued for the account of or in favor of a
Subsidiary). The Issuing Bank shall have no obligation to issue, and Borrower
shall not request the issuance of, any Letter of Credit at any time if after
giving effect to such issuance, the LC Exposure would exceed the LC Commitment
or the total Revolving Exposure would exceed the total Revolving Commitments. In
the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by Borrower to, or entered into by
Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.
(b) Request for Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit or the amendment,
renewal or extension of an outstanding Letter of Credit, Borrower shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank) an LC Request to the
Issuing Bank and the Administrative Agent not later than 11:00 a.m. on the third
Business Day preceding the requested date of issuance, amendment, renewal or
extension (or such later date and time as is acceptable to the Issuing Bank).
A request for an initial issuance of a Letter of Credit shall specify in
form and detail satisfactory to the Issuing Bank:
(i) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day);
(ii) the amount thereof;
(iii) the expiry date thereof (which shall not be later than the close
of business 15 days prior to the Revolving Maturity Date);
(iv) the name and address of the beneficiary thereof;
(v) whether the Letter of Credit is to be issued for its own account
or for the account of one if its Subsidiaries (provided that Borrower shall
be a co-applicant, and therefore jointly and severally liable, with respect
to each Letter of Credit issued for the account of a Subsidiary);
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(vi) the documents to be presented by such beneficiary in connection
with any drawing thereunder;
(vii) the full text of any certificate to be presented by such
beneficiary in connection with any drawing thereunder; and
(viii) such other matters as the Issuing Bank may require.
A request for an amendment, renewal or extension of any outstanding Letter
of Credit shall specify in form and detail satisfactory to the Issuing Bank:
(i) the Letter of Credit to be amended, renewed or extended;
(ii) the proposed date of amendment, renewal or extension thereof
(which shall be a Business Day);
(iii) the nature of the proposed amendment, renewal or extension; and
(iv) such other matters as the Issuing Bank may require.
If requested by the Issuing Bank, Borrower also shall submit a letter of
credit application on the Issuing Bank's standard form in connection with any
request for a Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i)
the LC Exposure shall not exceed $10.0 million and (ii) the total Revolving
Exposures shall not exceed the total Revolving Commitments. Unless the Issuing
Bank shall agree otherwise, no Letter of Credit shall be in an initial amount
less than $100,000, in the case of a Commercial Letter of Credit, or $500,000,
in the case of a Standby Letter of Credit.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) in the case of a Standby Letter of
Credit, (x) the date which is one year after the date of the issuance of such
Standby Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (y) the Letter of Credit
Expiration Date and (ii) in the case of a Commercial Letter of Credit, (x) the
date that is 180 days after the date of issuance of such Commercial Letter of
Credit (or, in the case of any renewal or extension thereof, 180 days after such
renewal or extension) and (y) the Letter of Credit Expiration Date.
(d) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
irrevocably grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Revolving Lender's Pro Rata Percentage of the aggregate amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Revolving Lender's Pro Rata Percentage of each LC Disbursement made by the
Issuing Bank and not reimbursed by Borrower on the date due as provided in
paragraph (e) of this Section 2.18, or of any reimbursement payment required to
be refunded to Borrower for any reason. Each Revolving Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance
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of a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement by
paying to the Issuing Bank an amount equal to such LC Disbursement not later
than 2:00 p.m., New York City time, on the date that such LC Disbursement is
made, if Borrower shall have received notice of such LC Disbursement prior to
11:00 a.m., New York City time, on such date, or, if such notice has not been
received by Borrower prior to such time, on such date, then not later than 2:00
p.m., New York City time on (i) the Business Day that Borrower receives such
notice, if such notice is received prior to 11:00 a.m., New York City time, on
the day of receipt, or (ii) the Business Day immediately following the day that
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; provided that Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 that such
payment be financed with an ABR Revolving Borrowing in an equivalent amount and,
to the extent so financed, Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing.
If Borrower fails to make such payment when due, the Issuing Bank shall
notify the Administrative Agent and the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
Borrower in respect thereof and such Revolving Lender's Pro Rata Percentage
thereof. Each Revolving Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent on such date (or, if such Revolving
Lender shall have received such notice later than 12:00 noon on any day, not
later than 11:00 a.m. on the immediately following Business Day), an amount
equal to such Revolving Lender's Pro Rata Percentage of the unreimbursed LC
Disbursement in the same manner as provided in Section 2.02(c) with respect to
Revolving Loans made by such Revolving Lender, and the Administrative Agent will
promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. The Administrative Agent will promptly pay to the Issuing
Bank any amounts received by it from Borrower pursuant to the above paragraph
prior to the time that any Revolving Lender makes any payment pursuant to the
preceding sentence; any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the
Revolving Lenders that shall have made such payments and to the Issuing Bank, as
appropriate.
If any Revolving Lender shall not have made its Pro Rata Percentage of such
LC Disbursement available to the Administrative Agent as provided above, each of
such Revolving Lender and Borrower severally agrees to pay interest on such
amount, for each day from and including the date such amount is required to be
paid in accordance with the foregoing to but excluding the date such amount is
paid, to the Administrative Agent for the account of the Issuing Bank at (i) in
the case of Borrower, the rate per annum set forth in Section 2.18(h) and (ii)
in the case of such Lender, at a rate determined by the Administrative Agent in
accordance with banking industry rules or practices on interbank compensation.
(f) Obligations Absolute. The Reimbursement Obligation of Borrower as
provided in Section 2.18(e) shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of (i) any lack of
validity or enforceability of any Letter of Credit or this Agreement, or any
term or provision therein; (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Bank under a Letter of Credit against presentation
of a draft or other document that fails to comply with the terms of such Letter
of Credit; (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.18, constitute a legal or equitable discharge of, or provide a right
of setoff against, the obligations of Borrower hereunder; (v) the fact that a
Default or Event of Default shall have occurred and be continu-
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ing; and (vi) any adverse change in the business, assets, property, results of
operations, prospects or condition, financial or otherwise, of Borrower and its
Subsidiaries. None of the Agents, the Lenders, the Issuing Bank or any of their
Affiliates, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by Borrower to the extent permitted by applicable law) suffered by Borrower that
are caused by the Issuing Bank's failure to exercise due care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and Borrower by telephone (confirmed by telecopy) of such
demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve Borrower of its Reimbursement Obligation to the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement
(other than with respect to the timing of such Reimbursement Obligation set
forth in Section 2.18(e)).
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest
payable on demand, for each day from and including the date such LC Disbursement
is made to but excluding the date that Borrower reimburses such LC Disbursement,
at the rate per annum as determined pursuant to Section 2.06(c). Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Revolving
Lender pursuant to paragraph (e) of this Section 2.18 to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.
(i) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, Borrower shall deposit in the LC Sub-Account, in the
name of the Collateral Agent and for the benefit of the Revolving Lenders, an
amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to Borrower described in
paragraph (g) or (h) of Article VIII. Each such deposit shall be held by the
Collateral Agent
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as collateral for the payment and performance of the obligations of Borrower
under this Agreement. The Collateral Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Collateral Agent and at
the risk and expense of Borrower, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Collateral Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of Borrower for the LC Exposure at such time
or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than
two-thirds of the total LC Exposure), be applied to satisfy other Obligations of
Borrower under this Agreement. If Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount plus any accrued interest or realized profits of such amounts (to
the extent not applied as aforesaid) shall be returned to Borrower within three
Business Days after all Events of Default have been cured or waived.
(j) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign
as Issuing Bank hereunder at any time upon at least 30 days' prior notice to the
Lenders, the Administrative Agent and Borrower. The Issuing Bank may be replaced
at any time by written agreement among Borrower, each Agent, the replaced
Issuing Bank and the successor Issuing Bank. The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Bank or any such
additional Issuing Bank. At the time any such resignation or replacement shall
become effective, Borrower shall pay all unpaid fees accrued for the account of
the replaced Issuing Bank pursuant to Section 2.05(c). From and after the
effective date of any such resignation or replacement or addition, as
applicable, (i) the successor or additional Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued by it thereafter and (ii) references herein to
the term "Issuing Bank" shall be deemed to refer to such successor or such
addition or to any previous Issuing Bank, or to such successor or such addition
and all previous Issuing Banks, as the context shall require. After the
resignation or replacement of an Issuing Bank hereunder, the replaced Issuing
Bank shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such resignation or replacement, but shall not be
required to issue additional Letters of Credit. If at any time there is more
than one Issuing Bank hereunder, Borrower may, in its discretion, select which
Issuing Bank is to issue any particular Letter of Credit.
(k) Additional Issuing Banks. Borrower may, at any time and from time to
time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld) and such Revolving Lender, designate one or more
additional Revolving Lenders to act as an issuing bank under the terms of this
Agreement, with the consent of the Administrative Agent (which consent shall not
be unreasonable withheld), the Issuing Bank and such Revolving Lender. Any
Lender designated as an issuing bank pursuant to this paragraph (k) shall be
deemed (in addition to being a Revolving Lender) to be the Issuing Bank with
respect to Letters of Credit issued or to be issued by such Revolving Lender,
and all references herein and in the other Loan Documents to the term "Issuing
Bank" shall, with respect to such Letters of Credit, be deemed to refer to such
Revolving Lender in its capacity as Issuing Bank, as the context shall require.
The Issuing Bank shall be under no obligation to issue any Letter of Credit
if:
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit, or any law applicable to the
Issuing Bank or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over the Issuing
Bank shall prohibit, or request that the Issuing Bank refrain from, the
issuance of letters of credit generally or
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such Letter of Credit in particular or shall impose upon the Issuing Bank
with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Bank is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the
Issuing Bank any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the Issuing Bank in good xxxxx
xxxxx material to it; or
(ii) the issuance of such Letter of Credit would violate one or more
policies of the Issuing Bank.
The Issuing Bank shall be under no obligation to amend any Letter of Credit
if (A) the Issuing Bank would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders (with references to
the Companies being references thereto after giving effect to the Transactions
unless otherwise expressly stated) that:
SECTION 3.01. Organization; Powers. Each Company (a) is duly organized and
validly existing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to carry on its business as now conducted and
to own and lease its property and (c) is qualified and in good standing (to the
extent such concept is applicable in the applicable jurisdiction) to do business
in every jurisdiction where such qualification is required, except in such
jurisdictions where the failure to so qualify or be in good standing,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.02. Authorization; Enforceability. The Transactions to be entered
into by each Loan Party are within such Loan Party's powers and have been duly
authorized by all necessary action. This Agreement has been duly executed and
delivered by each Loan Party and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. Except as set forth on
Schedule 3.03, the Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except (i) such as have been obtained or made and are in full force and effect,
(ii) filings necessary to perfect Liens created by the Loan Documents and (iii)
consents, approvals, registrations, filings or actions the failure of which to
obtain or perform could not reasonably be expected to result in a Material
Adverse Effect, (b) will not violate the Organizational Documents of any Company
or any order of any Governmental Authority, (c) will not violate, result in a
default or require any consent or approval under any applicable law or
regulation, indenture, agreement or other instrument binding upon any Company or
its assets, or give rise to a right thereunder to require any payment to be made
by any Company, except for violations, defaults or the creation of such rights
that
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could not reasonably be expected to result in a Material Adverse Effect, and (d)
will not result in the creation or imposition of any Lien on any property of any
Company, except Liens created by the Loan Documents and Permitted Liens.
SECTION 3.04. Financial Statements. (a) Borrower has heretofore furnished
to the Lenders the consolidated balance sheets and related statements of income,
members' equity and cash flows of Borrower (i) as of and for the fiscal years
ended December 31, 2001 and 2002, audited by and accompanied by the unqualified
opinion of PricewaterhouseCoopers LLP, independent public accountants and (ii)
(a) as of and for the six-month periods ended June 30, 2003 and 2002 and (b) as
of August 31, 2003 and for the two and eight months ended August 31, 2002 and
2003, certified by the chief financial officer of Borrower. Such financial
statements have been prepared, in the case of clauses (i) and (ii)(a), in
accordance with GAAP consistently applied and, in the case of clauses (i),
(ii)(a) and (ii)(b), present fairly in all material respects the financial
condition, results of operations and cash flows of Borrower as of such dates and
for such periods, subject, in the case of the financial statements referred to
in clause (ii) of this Section 3.04, to normal year-end audit adjustments and
the absence of footnotes. Except as set forth in such financial statements,
there are no liabilities of any Company of any kind, whether accrued,
contingent, absolute, determined, determinable or otherwise, which could
reasonably be expected to result in a Material Adverse Effect, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than liabilities under the Loan
Documents and the Senior Subordinated Note Documents.
(b) Borrower has heretofore delivered to the Lenders Borrower's unaudited
pro forma consolidated balance sheets and statements of income and pro forma
EBITDA as of June 30, 2003 and September 30, 2003, and for the fiscal year ended
December 31, 2002 and the six months and twelve months ended June 30, 2003 and
twelve months ended September 30, 2003, in each case, prepared on a basis
consistent with the one described in the Offering Memorandum under "Unaudited
pro forma financial information." Such pro forma financial statements have been
prepared in good faith by the Loan Parties, based on the assumptions stated
therein (which assumptions are believed by the Loan Parties to be reasonable),
are based on the best information available to the Loan Parties as of the date
of delivery thereof, accurately reflect all adjustments required to be made to
give effect to the transactions described in the Offering Memorandum under
"Unaudited pro forma financial information", and, other than pro forma EBITDA,
in accordance with Regulation S-X, and present fairly in all material respects
on a pro forma basis the consolidated financial position and results of
operations of Borrower as of and for such dates, assuming that the Transactions
had actually occurred at such dates.
Since December 31, 2002, there has been no event, change or occurrence
that, individually or in the aggregate, has had or could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.05. No Claims. Each Company owns or has rights to use all of the
Collateral and all rights with respect to any of the foregoing used in,
necessary for or material to each Company's business as currently conducted. The
use by each Company of such Collateral and all such rights with respect to the
foregoing do not infringe on the rights of any person other than such
infringement which would not, individually or in the aggregate, result in a
Material Adverse Effect. No claim has been made and remains outstanding that any
Company's use of any Collateral does or may violate the rights of any third
person that would individually, or in the aggregate, have a Material Adverse
Effect.
SECTION 3.06. Properties. (a) Each Company has good title to, or valid
leasehold interests in, all its property material to its business, free and
clear of all Liens except for (x) Permitted Collateral Liens and (y) minor
irregularities or deficiencies in title that, individually or in the aggregate,
do not interfere with its ability to conduct its business as currently conducted
or to utilize such property for its in-
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tended purpose. The property of the Companies, taken as a whole, (i) is in good
operating order, condition and repair (ordinary wear and tear excepted) (except
to the extent that the failure to be in such condition could not reasonably be
expected to result in a Material Adverse Effect) and (ii) constitutes all the
property which is required for the business and operations of the Companies as
presently conducted.
(b) Schedule 3.06(b) contains a true and complete list of each interest in
Real Property owned by any Company as of the date hereof and describes the type
of interest therein held by such Company. Schedule 3.06(b) contains a true and
complete list of each Real Property leased, subleased or otherwise occupied or
utilized by any Company, as lessee, sublessee, franchisee or licensee, as of the
date hereof and describes the type of interest therein held by such Company and
whether such lease, sublease or other instrument requires the consent of the
landlord thereunder or other parties thereto to the Transactions.
(c) (i) No Company has received any notice of, nor has any knowledge of,
the occurrence or pendency or contemplation of any Casualty Event affecting all
or any material portion of its property and (ii) unless flood insurance shall
have been obtained in accordance with Section 5.04, no Mortgage encumbers
improved Real Property that is located in an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards and with respect to which flood insurance has been made available under
the National Flood Insurance Act of 1968.
SECTION 3.07. Intellectual Property.
(a) Ownership/No Claims. Each Loan Party owns, or is licensed to use, all
patents, patent applications, trademarks, trade names, servicemarks, copyrights,
technology, trade secrets, proprietary information, domain names, know-how and
processes necessary for the conduct of its business as currently conducted (the
"Intellectual Property"), except for those the failure to own or license which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No claim has been asserted and is pending by any
person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does any
Loan Party know of any valid basis for any such claim. The use of such
Intellectual Property by each Loan Party does not infringe the rights of any
person, except for such claims and infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Registrations. Except pursuant to licenses and other user agreements
entered into by each Loan Party in the ordinary course of business that are
listed in Schedules 15(a) and 15(b) annexed to the Perfection Certificate, on
and as of the date hereof (i) each Loan Party owns and possesses the right to
use, and has done nothing to authorize or enable any other person to use, any
Copyright, Patent or Trademark (as such terms are defined in the U.S. Security
Agreement) listed in Schedules 15(a) and 15(b) annexed to the Perfection
Certificate and (ii) all registrations listed in Schedules 15(a) and 15(b)
annexed to the Perfection Certificate are valid and in full force and effect.
(c) No Violations or Proceedings. Except as set forth on Schedule 3.07(c),
to each Loan Party's knowledge, on and as of the date hereof, (i) there is no
material violation by others of any right of such Loan Party with respect to any
Copyright, Patent or Trademark listed in Schedules 15(a) and 15(b) annexed to
the Perfection Certificate, respectively, pledged by it under the name of such
Loan Party, (ii) such Loan Party is not infringing upon any Copyright, Patent or
Trademark of any other person other than such infringement that, individually or
in the aggregate, would not (or would not reasonably be expected to) result in a
Material Adverse Effect on the value or utility of the Intellectual Property or
any portion thereof material to the use and operation of the Collateral and
(iii) no proceedings have been instituted or are pending against such Loan Party
or threatened, and no claim against such Loan Party has been received by such
Loan Party, alleging any such violation.
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SECTION 3.08. Condition and Maintenance of Equipment. The Equipment of each
Company is in good repair, working order and condition, reasonable wear and tear
excepted. Each Company shall cause the Equipment to be maintained and preserved
in good repair, working order and condition, reasonable wear and tear excepted,
and shall as quickly as commercially practicable make or cause to be made all
repairs, replacements and other improvements which are necessary in the conduct
of each Company's business.
SECTION 3.09. Equity Interests and Subsidiaries. (a) Schedule 3.09(a) sets
forth a list of (i) all the Subsidiaries of Borrower and their jurisdiction of
organization as of the Closing Date and (ii) the number of shares of each class
of its Equity Interests authorized, and the number outstanding, on the Closing
Date and the number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the Closing Date. All
Equity Interests of each Company (other than Holdings) are duly and validly
issued and are fully paid and non-assessable and are owned by Holdings or
Borrower, directly or indirectly through Wholly Owned Subsidiaries, and all
Equity Interests of Borrower are owned directly by Holdings. Each Loan Party is
the record and beneficial owner of, and has good and marketable title to, the
Equity Interests pledged by it under any Security Agreement, free of any and all
Liens, rights or claims of other persons, except the security interest created
by the Security Agreements, and there are no outstanding warrants, options or
other rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any such Equity Interests.
(b) No consent of any person including any other general or limited
partner, any other member of a limited liability company, any other shareholder
or any other trust beneficiary is necessary in connection with the creation,
perfection or first priority status of the security interest of the Collateral
Agent in any Equity Interests pledged to the Collateral Agent for the benefit of
the Secured Parties under the Security Agreements or the exercise by the
Collateral Agent of the voting or other rights provided for in the Security
Agreements or the exercise of remedies in respect thereof.
(c) An accurate organization chart, showing the ownership structure of
Holdings, Borrower and each Subsidiary on the Closing Date, and after giving
effect to the Transactions, is set forth on Schedule 3.09(c).
SECTION 3.10. Litigation; Compliance with Laws. (a) There are no actions,
suits or proceedings at law or in equity by or before any Governmental Authority
now pending or, to the knowledge of any Company, threatened against or affecting
any Company or any business, property or rights of any such person (i) that
involve any Loan Document or any of the Transactions or (ii) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) Except for matters covered by Section 3.20, no Company or any of its
property is in violation of, nor will the continued operation of its property as
currently conducted violate, any Requirements of Law (including any zoning or
building ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Real Property or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.11. Agreements. (a) No Company is a party to any agreement or
instrument or subject to any corporate or other constitutional restriction that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
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(b) No Company is in default in any manner under any provision of any
indenture or other agreement or instrument evidencing Indebtedness, or any other
agreement or instrument to which it is a party or by which it or any of its
property are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
(c) Schedule 3.11(c) accurately and completely lists all material
agreements (other than leases of Real Property set forth on Schedule 3.06(b)) to
which any Company is a party which are in effect on the date hereof in
connection with the operation of the business conducted thereby and Borrower has
delivered to the Administrative Agent complete and correct copies of all such
material agreements, including any amendments, supplements or modifications with
respect thereto.
SECTION 3.12. Federal Reserve Regulations. (a) No Company is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the regulations of the Board, including Regulation T, U
or X. The pledge of the Securities Collateral pursuant to the Security
Agreements does not violate such regulations.
SECTION 3.13. Investment Company Act; Public Utility Holding Company Act.
No Company is (a) an "investment company" or a company "controlled" by an
"investment company," as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended, or (b) a "holding company," an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.
SECTION 3.14. Use of Proceeds. Borrower will used the proceeds of (a) the
Revolving Loans in an aggregate amount not to exceed $5.0 million and all of the
Term Loans to finance the Transactions (including the working capital purchase
price adjustment pursuant to the Acquisition Agreement) and pay related fees and
expenses and (b) the Revolving Loans after the Closing Date for general
corporate purposes (including to effect Permitted Acquisitions).
SECTION 3.15. Taxes. Each Company has (a) timely filed or caused to be
timely filed all federal Tax Returns and all material, state, local and foreign
Tax Returns or materials required to have been filed by it and all such Tax
Returns are true and correct in all material respects and has (b) duly and
timely paid or caused to be duly and timely paid all Taxes (whether or not shown
on any Tax Return) due and payable by it and all assessments received by it,
except Taxes (i) that are being contested in good faith by appropriate
proceedings and for which such Company shall have set aside on its books
adequate reserves in accordance with GAAP or (ii) which could not, individually
or in the aggregate, have a Material Adverse Effect; provided that any such
contest of Taxes with respect to Collateral shall also satisfy the Contested
Collateral Lien Conditions. Each Company has made adequate provision in
accordance with GAAP for all Taxes not yet due and payable. Each Company is
unaware of any proposed or pending tax assessments, deficiencies or audits that
could be reasonably expected to, individually or in the aggregate, result in a
Material Adverse Effect.
SECTION 3.16. No Material Misstatements. No information, report, financial
statement, exhibit or schedule furnished by or on behalf of any Company to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto (including the
Confidential Information Memorandum), taken as a whole, contained or contains
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any material misstatement of fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading as of the date such
information is dated or certified; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each Company represents only that it acted
in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or
schedule.
SECTION 3.17. Labor Matters. As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against any Company pending or, to
the knowledge of any Company, threatened. The hours worked by and payments made
to employees of any Company have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state, local or foreign law
dealing with such matters in any manner which could reasonably be expected to
result in a Material Adverse Effect. All payments due from any Company, or for
which any claim may be made against any Company, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such Company except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Company is bound.
SECTION 3.18. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of each Loan Party (individually and on a
consolidated basis with its Subsidiaries) will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party (individually and on a consolidated basis with
its Subsidiaries) will be greater than the amount that will be required to pay
the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) each Loan Party (individually and on a consolidated basis with its
Subsidiaries) will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party (individually and on a consolidated basis with
its Subsidiaries) will not have unreasonably small capital with which to conduct
its business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.
SECTION 3.19. Employee Benefit Plans. (a) Each Company and each Plan to
which any Company contributes any assets is in compliance in all material
respects with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events, could reasonably be expected to result in material
liability of any Company or the imposition of a Lien on any of the assets of a
Company. The present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$5,000,000 the fair market value of the assets of all such underfunded Plans.
Using actuarial assumptions and computation methods consistent with subpart 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of each Company or
its ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Multiemployer Plan, could not reasonably be expected to result in a
Material Adverse Effect.
(b) To the extent applicable, each Foreign Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authori-
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ties. No Company has incurred any material obligation in connection with the
termination of or withdrawal from any Foreign Plan.
SECTION 3.20. Environmental Matters. (a) Except as set forth in Schedule
3.20 and except as, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect:
(1) The Companies and their businesses, operations and Real Property
are and in the last six years have been in compliance with, and the
Companies have no liability under, Environmental Law;
(2) The Companies have obtained all Environmental Permits required for
the conduct of their businesses and operations, and the ownership,
operation and use of their assets, under Environmental Law, all such
Environmental Permits are valid and in good standing and, under the
currently effective business plan of the Companies, no expenditures or
operational adjustments will be required in order to renew or modify such
Environmental Permits during the next five years;
(3) There has been no Release or threatened Release of Hazardous
Material on, at, under or from any Real Property or facility presently or
formerly owned, leased or operated by the Companies or their predecessors
in interest that could result in liability by the Companies under
Environmental Law;
(4) There is no Environmental Claim pending or, to the knowledge of
the Companies, threatened against the Companies, or relating to the Real
Property currently or formerly owned, leased or operated by the Companies
or relating to the operations of the Companies, and there are no actions,
activities, circumstances, conditions, events or incidents that could form
the basis of such an Environmental Claim; and
(5) No person with an indemnity or contribution obligation to the
Companies relating to compliance with or liability under Environmental Law
is in default with respect to such obligation.
(b) Except as set forth in Schedule 3.20:
(1) No Company is obligated to perform any action or otherwise incur
any material expense under Environmental Law pursuant to any order, decree,
judgment or agreement by which it is bound or has assumed by contract or
agreement, and no Company is conducting or financing any material Response
pursuant to any Environmental Law with respect to any Real Property or any
other location;
(2) No Real Property or facility owned, operated or leased by the
Companies and, to the knowledge of the Companies, no Real Property or
facility formerly owned, operated or leased by the Companies or any of
their predecessors in interest is (i) listed or proposed for listing on the
National Priorities List promulgated pursuant to CERCLA or (ii) listed on
the Comprehensive Environmental Response, Compensation and Liability
Information System promulgated pursuant to CERCLA or (iii) included on any
similar list maintained by any Governmental Authority including, without
limitation, any such list relating to petroleum;
(3) No Lien has been recorded or, to the knowledge of any Company,
threatened under any Environmental Law with respect to any Real Property or
assets of the Companies;
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(4) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not require any
notification, registration, filing, reporting, disclosure, investigation,
remediation or cleanup pursuant to any Governmental Real Property
Disclosure Requirements or any other Environmental Law; and
(5) The Companies have made available to Lenders all material records
and files in the possession, custody or control of, or otherwise reasonably
available to, the Companies concerning compliance with or liability under
Environmental Law including, without limitation, those concerning the
existence of Hazardous Material at real property or facilities currently or
formerly owned, operated, leased or used by the Companies.
SECTION 3.21. Insurance. Schedule 3.21 sets forth a true, complete and
correct description of all insurance maintained by each Company as of the
Closing Date. All insurance maintained by the Companies is in full force and
effect, all premiums have been duly paid, the Loan Parties have not received
notice of violation or cancellation thereof, the Premises, and the use,
occupancy and operation thereof, comply in all material respects with all
Insurance Requirements and there exists no default under any Insurance
Requirement. Each Company has insurance in such amounts and covering such risks
and liabilities as are customary for companies of a similar size engaged in
similar businesses in similar locations.
SECTION 3.22. Security Documents. (a) The Security Agreements are effective
to create in favor of the Collateral Agent for the benefit of the Secured
Parties, legal, valid and enforceable security interests in and Liens on the
Security Agreement Collateral and (i) when financing statements and other
filings in appropriate form are filed in the offices specified on Schedule 7 to
the Perfection Certificate and (ii) upon the taking of possession or control by
the Collateral Agent of the Security Agreement Collateral with respect to which
a security interest may be perfected only by possession or control (which
possession or control shall be given to the Collateral Agent to the extent
possession or control by the Collateral Agent is required by the Security
Agreements), the Liens created by the Security Agreements shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the grantors thereunder in the Security Agreement Collateral other than
Intellectual Property (as defined in the U.S. Security Agreement), in each case
subject to no Liens other than Permitted Collateral Liens.
(b) When the U.S. Security Agreement or a short form thereof is filed in
the United States Patent and Trademark Office and the United States Copyright
Office, the Lien created by the U.S. Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in the Intellectual Property (as defined in such
Security Agreement), in each case subject to no Liens other than Permitted
Collateral Liens.
(c) Each Mortgage executed and delivered as of the Closing Date is, or, to
the extent any Mortgage is duly executed and delivered thereafter by the
relevant Loan Party, will be, effective to create, in favor of the Collateral
Agent, for its benefit and the benefit of the Secured Parties, subject only to
Permitted Collateral Liens or other Liens acceptable to the Collateral Agent, a
legal, valid and enforceable first priority Lien on and security interest in all
of the Loan Parties' right, title and interest in and to the Mortgaged
Properties thereunder and the proceeds thereof, and when the Mortgages are filed
in the offices specified on Schedule 1.01(a) (or, in the case of any Mortgage
executed and delivered after the date thereof in accordance with the provisions
of Sections 5.10 and 5.11, when such Mortgage is filed in the offices specified
in the local counsel opinion delivered with respect thereto in accordance with
the provisions of Sections 5.10 and 5.11), the Mortgages shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the Loan Parties in the Mortgaged Properties and the proceeds thereof, in each
case prior and superior in right to any other person, other than Permitted
Collateral Liens or other Liens acceptable to the Collateral Agent.
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(d) Each Security Document delivered pursuant to Sections 5.10 and 5.11
will, upon execution and delivery thereof, be effective to create in favor of
the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable security interest in and Lien on all of the Loan Parties' right,
title and interest in and to the Collateral thereunder, and when all appropriate
filings or recordings are made in the appropriate offices as may be required
under applicable law, such Security Document will constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in such Collateral, in each case subject to no Liens other than the
applicable Permitted Collateral Liens.
SECTION 3.23. Acquisition Documents; Representations and Warranties in
Agreement. (a) Schedule 3.23 lists (i) each agreement relating to the Equity
Financing, the Rollover Equity, the Xxxxxx Investment and the Xxxxxx Employment,
(ii) each exhibit, schedule, annex or other attachment to the Acquisition
Agreement or any agreement referred to in clause (i) and (iii) each material
agreement, certificate, instrument, letter or other document contemplated by the
Acquisition Agreement or any item referred to in clause (i) or (ii) to be
entered into, executed or delivered or to become effective in connection with
the Acquisition. The Lenders have been furnished true and complete copies of
each Acquisition Document to the extent executed and delivered on or prior to
the Closing Date.
(b) All representations and warranties of each Company set forth in the
Acquisition Agreement were true and correct in all material respects as of the
time such representations and warranties were made and shall be true and correct
in all material respects as of the Closing Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
SECTION 3.24. Subordination of Senior Subordinated Notes. The Obligations
are "Senior Debt," the Guaranteed Obligations are "Guarantor Senior Debt" and
the Obligations and Guaranteed Obligations are "Designated Senior Debt," in each
case, within the meaning of the Senior Subordinated Note Documents.
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01. Conditions to Initial Credit Extension. The obligation of
each Lender and, if applicable, each Issuing Bank to fund the initial Credit
Extension requested to be made by it shall be subject to the prior or concurrent
satisfaction of each of the conditions precedent set forth in this Section 4.01.
(a) Loan Documents. All legal matters incident to this Agreement, the
Credit Extensions hereunder and the other Loan Documents shall be
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent and there shall have been delivered to the Administrative Agent an
executed counterpart of each of the Loan Documents, including this
Agreement, the Security Agreements, each Mortgage, the Perfection
Certificate and each other applicable Loan Document.
(b) Corporate Documents. The Administrative Agent shall have received:
(i) a certificate of the secretary or assistant secretary of each
Loan Party dated the Closing Date and certifying (A) that attached
thereto is a true and complete copy of each Organizational Document of
such Loan Party, certified (to the extent appli-
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cable) as of a recent date by the Secretary of State of the state of
its organization, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors of such
Loan Party authorizing the execution, delivery and performance of the
Loan Documents to which such person is a party and, in the case of
Borrower, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect
and (C) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party (together with a
certificate of another officer as to the incumbency and specimen
signature of the secretary or assistant secretary executing the
certificate in this clause (i);
(ii) a certificate as to the good standing of each Loan Party (in
so-called "long form," if available) as of a recent date, from such
Secretary of State; and
(iii) such other documents as the Lenders, the Issuing Bank or
the Administrative Agent may reasonably request.
(c) Officers' Certificate. The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of Borrower, confirming
compliance with the conditions precedent set forth in this Section 4.01 and
paragraphs (b), (c) and (d) of Section 4.02.
(d) Financings and Other Transactions, Etc. (i) The Transactions shall
have been consummated or shall be consummated simultaneously on the Closing
Date, in each case in all material respects in accordance with the terms
hereof and the terms of the Transaction Documents, without the waiver or
amendment of any such terms not approved by the Administrative Agent and
the Arranger other than any waiver or amendment thereof that is not
materially adverse to the interests of the Lenders.
(ii) Borrower shall have received not less than $150 million in gross
proceeds from the issuance and sale of the Senior Subordinated Notes, and
the Senior Subordinated Note Agreement shall be in form and substance
reasonably satisfactory to the Lenders and the Senior Subordinated Note
Documents shall be certified by Borrower's chief financial officer as
current.
(iii) The Equity Financing shall have been consummated. The terms of
the Equity Financing and the Rollover Equity shall not require any payments
or other distributions of cash or property in respect thereof, or any
purchases, redemptions or other acquisitions thereof for cash or property,
prior to the payment in full of all obligations under the Loan Documents,
except as permitted by the Loan Documents.
(iv) The Xxxxxx Investment shall have been consummated in accordance
with the Acquisition Documents, without any amendment or waiver thereof
(other than any waiver or amendment thereof that is not adverse to the
Lenders).
(v) The Winnipeg Contribution shall have been consummated in
accordance with the Acquisition Documents, without any amendment or waiver
thereof (other than any waiver or amendment thereof that is not adverse to
the Lenders).
(vi) The Xxxxxx Employment shall have become effective in accordance
with the Acquisition Documents, without any amendment or waiver thereof
(other than any waiver or amendment thereof that is not adverse to the
Lenders).
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(vii) The Refinancing shall have been consummated in full to the
satisfaction of the Lenders with all liens in favor of the existing lenders
being unconditionally released; the Administrative Agent shall have
received a "pay-off" letter with respect to all debt being refinanced in
the Refinancing; the Administrative Agent shall have received from any
person holding any Lien securing any such debt, such UCC termination
statements, mortgage releases, releases of assignments of leases and rents
and other instruments, in each case in proper form for recording, as the
Administrative Agent shall have reasonably requested to release and
terminate of record the Liens securing such debt.
(viii) Borrower shall be the sole direct Subsidiary of Holdings,
owning directly or indirectly all of the equity of Holdings' Subsidiaries
(other than Borrower), on terms and conditions satisfactory to the Lenders.
(e) Indebtedness and Minority Interests. After giving effect to the
Transactions and the other transactions contemplated hereby, (x) neither
Borrower nor any of its Subsidiaries shall have outstanding any
Indebtedness, preferred stock or minority interests other than (i) the
Loans and Credit Extensions hereunder, (ii) the Senior Subordinated Notes
and (iii) Indebtedness owed to Borrower or any Guarantor and (y) Holdings
shall have no Indebtedness or Disqualified Capital Stock outstanding.
(f) Opinions of Counsel. The Administrative Agent shall have received,
on behalf of itself, the other Agents, the Arranger, the Lenders and the
Issuing Bank, a favorable written opinion of Ropes & Xxxx LLP, special
counsel for the Loan Parties, substantially in the form attached as Exhibit
K-1, and each local and Canadian counsel listed on Schedule 4.01(f),
substantially to the effect set forth in Exhibit K-2, in each case (A)
dated the Closing Date, (B) addressed to the Agents, the Issuing Bank and
the Lenders and (C) covering such other matters relating to the Loan
Documents and the Transactions as the Administrative Agent shall reasonably
request, and (iii) a copy of each legal opinion delivered under the other
Transaction Documents, and Borrower shall use its best efforts to deliver
reliance letters from the party delivering such opinion authorizing the
Agents, Lenders and the Issuing Bank to rely thereon as if such opinion
were addressed to them.
(g) Solvency Certificate. The Administrative Agent shall have received
a solvency certificate in the form of Exhibit M, dated the Closing Date and
signed by the chief financial officer of Borrower.
(h) Requirements of Law. The Lenders shall be satisfied that the
Transactions shall be in full compliance with all material Requirements of
Law, including without limitation Regulations T, U and X of the Board. The
Lenders shall have received satisfactory evidence of compliance with all
applicable Requirements of Law, including all Environmental Laws.
(i) Consents. The Lenders shall be satisfied that all requisite
Governmental Authorities and third parties shall have approved or consented
to the Transactions, and there shall be no governmental or judicial action,
actual or threatened, that has or would have, singly or in the aggregate, a
reasonable likelihood of restraining, preventing or imposing burdensome
conditions on the Transactions or the other transactions contemplated
hereby.
(j) Litigation. There shall be no litigation, public or private, or
administrative proceedings, governmental investigation or other legal or
regulatory developments, actual or threatened, that, singly or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect, or could materially and adversely affect the ability of Holdings,
Borrower and the
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Subsidiaries to fully and timely perform their respective obligations under
the Transaction Documents, or the ability of the parties to consummate the
financings contemplated hereby or the other Transactions.
(k) Sources and Uses. The sources and uses of the Loans shall be as
set forth in Section 3.14.
(l) Fees. The Arranger and Administrative Agent shall have received
all Fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including the reasonable legal fees and expenses of
Xxxxxx Xxxxxx & Xxxxxxx LLP, special counsel to the Agents, and the fees
and expenses of any local counsel, appraisers, consultants and other
advisors) required to be reimbursed or paid by Borrower hereunder or under
any other Loan Document.
(m) Personal Property Requirements. The Collateral Agent shall have
received:
(i) all certificates, agreements or instruments representing or
evidencing the Securities Collateral accompanied by instruments of
transfer and stock powers endorsed in blank;
(ii) Intercompany Notes executed by and among Holdings and each
of its Subsidiaries, accompanied by instruments of transfer endorsed
in blank;
(iii) all other certificates, agreements, including control
agreements, or instruments necessary to perfect the Collateral Agent's
security interest in all Chattel Paper, all Instruments, all Deposit
Accounts and all Investment Property (as each such term is defined in
the Security Agreements and to the extent required by Section 3.3 of
the Security Agreements) of each Loan Party;
(iv) UCC financing statements in appropriate form for filing
under the UCC, filings with the United States Patent, Trademark and
Copyright offices and such other documents under applicable
Requirements of Law in each jurisdiction as may be necessary to
perfect the Liens created, or purported to be created, by the Security
Documents and, with respect to all UCC financing statements required
to be filed pursuant to the Loan Documents, evidence satisfactory to
the Administrative Agent that Borrower has retained, at its sole cost
and expense, a service provider acceptable to the Administrative Agent
for the tracking of all such financing statements and notification to
the Administrative Agent, of, among other things, the upcoming lapse
or expiration thereof;
(v) certified copies of UCC, tax and judgment lien searches,
bankruptcy and pending lawsuit searches or equivalent reports or
searches, each of a recent date listing all effective financing
statements, lien notices or comparable documents that name any Loan
Party as debtor and that are filed in those state and county
jurisdictions in which any property of any Loan Party is located and
the state and county jurisdictions in which any Loan Party is
organized or maintains its principal place of business and such other
searches that are necessary in the reasonable judgment of the
Collateral Agent, none of which encumber the Collateral covered or
intended to be covered by the Security Documents (other than Permitted
Collateral Liens or any other Liens acceptable to the Collateral
Agent);
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(vi) with respect to each Real Property set forth on Schedule
4.01(m)(vi), a Landlord Access Agreement, to the extent obtained by
the Loan Party that is the lessee thereof after using all commercially
reasonable efforts to do so; and
(vii) evidence acceptable to the Collateral Agent of payment by
the Loan Parties of all applicable recording taxes, fees, charges,
costs and expenses required for the recording of the Security
Documents.
(n) Real Property Requirements. The Collateral Agent shall have
received:
(i) a Mortgage encumbering each Mortgaged Property in favor of
the Collateral Agent, for the benefit of the Secured Parties, duly
executed and acknowledged by each Loan Party that is the owner of or
holder of any interest in such Mortgaged Property, and otherwise in
form for recording in the recording office of each political
subdivision where each such Mortgaged Property is situated, together
with such certificates, affidavits, questionnaires or returns as shall
be required in connection with the recording or filing thereof to
create a lien under applicable law, and such UCC financing statements,
all of which shall be in form and substance reasonably satisfactory to
Collateral Agent, and any other instruments necessary to grant a
mortgage lien under the laws of any applicable jurisdiction;
(ii) with respect to each Mortgaged Property, such consents,
approvals, amendments, supplements, estoppels, tenant subordination
agreements or other instruments as necessary or required to consummate
the Transactions or as shall reasonably be deemed necessary by the
Collateral Agent in order for the owner or holder of the fee or
leasehold interest constituting such Mortgaged Property to grant the
Lien contemplated by the Mortgage with respect to such Mortgaged
Property;
(iii) 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 first mortgage Lien on the
Mortgaged Property and fixtures described therein in the amount set
forth on Schedule 4.01(n)(iii) hereto with respect to such Mortgaged
Property 115% of the fair market value of such Mortgaged Property
which policy (or commitment) (each, a "Title Policy") shall (A) be
issued by the Title Company, (B) to the extent necessary, include such
reinsurance arrangements (with provisions for direct access, if
necessary) as shall be reasonably acceptable to the Collateral Agent,
(C) contain a "tie-in" or "cluster" endorsement (if available under
applicable law) (i.e., policies which insure against losses regardless
of location or allocated value of the insured property up to a stated
maximum coverage amount), (D) have been supplemented by such
endorsements (or where such endorsements are not available, opinions
of special counsel, architects or other professionals reasonably
acceptable to the Collateral Agent to the extent that such opinions
can be obtained at a cost which is reasonable with respect to the
value of the Mortgaged Property subject to such Mortgage) as shall be
reasonably requested by the Collateral Agent (including, without
limitation, endorsements on matters relating to usury, first loss,
last dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate,
environmental lien and so-called comprehensive coverage over covenants
and restrictions), and (E) contain no exceptions to title other than
exceptions acceptable to the Collateral Agent;
(iv) with respect to each Mortgaged Property, such affidavits,
certificates, information (including financial data) and instruments
of indemnification (including, with-
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out limitation, a so-called "gap" indemnification) as shall be
required to induce the Title Company to issue the Title Policy/ies (or
commitment) and endorsements contemplated in subparagraph (iii) above;
(v) evidence reasonably acceptable to the Collateral Agent of
payment by Borrower of all Title Policy premiums, search and
examination charges, and related charges, mortgage recording taxes,
fees, charges, costs and expenses required for the recording of the
Mortgages and issuance of the Title Policies referred to subparagraph
(iii) above;
(vi) with respect to each Real Property or Mortgaged Property,
copies of all Leases in which Borrower or any Subsidiary holds the
lessor's interest or other agreements relating to possessory
interests, if any. To the extent any of the foregoing affect any
Mortgaged Property, such agreement shall be subordinate to the Lien of
the Mortgage to be recorded against such Mortgaged Property, either
expressly by its terms or pursuant to a subordination, non-disturbance
and attornment agreement, and shall otherwise be acceptable to the
Collateral Agent;
(vii) with respect to each Mortgaged Property, Borrower and each
Subsidiary shall have made all notifications, registrations and
filings, to the extent required by, and in accordance with, all
Governmental Real Property Disclosure Requirements applicable to such
Mortgaged Property; and
(viii) Surveys with respect to each Mortgaged Property.
(o) Insurance. The Administrative Agent shall have received a copy of,
or a certificate as to coverage under, the insurance policies required by
Section 5.04 and the applicable provisions of the Security Documents, each
of which shall be endorsed or otherwise amended to include a "standard" or
"New York" lender's loss payable or mortgagee endorsement (as applicable)
and to name the Collateral Agent, on behalf of the Secured Parties, as
additional insured, in form and substance satisfactory to the
Administrative Agent.
SECTION 4.02. Conditions to All Credit Extensions. The obligation of each
Lender and each Issuing Bank to make any Credit Extension (including the initial
Credit Extension) shall be subject to, and to the satisfaction of, each of the
conditions precedent set forth below.
(a) Notice. The Administrative Agent shall have received a Borrowing
Request as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) if Loans are being requested or, in
the case of the issuance, amendment, extension or renewal of a Letter of
Credit, the Issuing Bank and the Administrative Agent shall have received a
notice requesting the issuance, amendment, extension or renewal of such
Letter of Credit as required by Section 2.18(b) or, in the case of the
Borrowing of a Swingline Loan, the Swingline Lender and the Administrative
Agent shall have received a notice requesting such Swingline Loan as
required by Section 2.17(b).
(b) No Default. Each of Borrower and each other Loan Party shall be in
compliance in all material respects with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or
performed, and, at the time of and immediately after such Credit Extension,
no Default shall have occurred and be continuing on such date or after
giving effect to the Credit Extension requested to be made on such date.
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(c) Representations and Warranties. Each of the representations and
warranties made by any Loan Party set forth in Article III hereof or in any
other Loan Document shall be true and correct in all material respects
(except that any representation and warranty that is qualified as to
"materiality" or "Material Adverse Effect" shall be true and correct in all
respects) on and as of the date of such Credit Extension with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(d) No Material Adverse Effect. There has been no event, condition
and/or contingency that has had or is reasonable likely to have a Material
Adverse Effect.
(e) No Legal Bar. No order, judgment or decree of any Governmental
Authority shall purport to restrain any Lender from making any Loans to be
made by it. No injunction or other restraining order shall have been
issued, shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Loans hereunder.
Each of the delivery of a Borrowing Request or notice requesting the
issuance, amendment, extension or renewal of a Letter of Credit and the
acceptance by Borrower of the proceeds of such Credit Extension shall constitute
a representation and warranty by Borrower and each other Loan Party that on the
date of such Credit Extension (both immediately before and after giving effect
to such Credit Extension and the application of the proceeds thereof) the
conditions contained in this Section 4.02 have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
Each Loan Party covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full and all
Letters of Credit have been canceled or have expired or been fully cash
collateralized and all amounts drawn thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, each Loan Party
will, and will cause each of its Subsidiaries to:
SECTION 5.01. Financial Statements, Reports, etc. In the case of Holdings
and Borrower, furnish to the Administrative Agent (with a copy for each Lender):
(a) Annual Reports. Within 90 days after the end of each fiscal year
(but no later than the date on which Holdings or Borrower would be required
to file a Form 10-K under the Exchange Act if it were subject to Section 15
and 13(d) of the Exchange Act), (i) the condensed balance sheet of Holdings
(parent company only) as of the end of such fiscal year, prepared in
accordance with Rule 12-04 of Regulation S-X (and any other financial
statements of Holdings for such fiscal year delivered to any direct or
indirect equity holder thereof pursuant to the LP Agreement), (ii) the
consolidated balance sheet of Borrower and its Subsidiaries as of the end
of such fiscal year and related consolidated statements of income, cash
flows and members' equity for such fiscal year, in comparative form with
such financial statements as of the end of, and for, the preceding fiscal
year, and notes thereto, all prepared in accordance with Regulation S-X and
accompanied by an opinion of PricewaterhouseCoopers LLP or other
independent public account-
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ants of recognized national standing reasonably satisfactory to the
Administrative Agent (which opinion shall not be qualified as to scope or
contain any going concern or other qualification), stating that such
financial statements fairly present, in all material respects, the
consolidated financial condition, results of operations, cash flows and
changes in members' equity of Borrower and its Subsidiaries as of such
dates and for such periods in accordance with GAAP consistently applied,
(iii) a management report in a form reasonably satisfactory to the
Administrative Agent setting forth results of operations and cash flows of
Borrower and its Subsidiaries as of the end of and for such fiscal year, as
compared to budgeted amounts and (iv) a management's discussion and
analysis of the financial condition and results of operations for such
fiscal year, as compared to the previous fiscal year;
(b) Quarterly Reports. Within 45 days (or, with respect to the fiscal
quarter ended September 30, 2003, within 45 days of the Closing Date) after
the end of each of the first three fiscal quarters of each fiscal year (but
no later than the date on which Holdings or Borrower would be required to
file a Form 10-Q under the Exchange Act if it were subject to Section 15
and 13(d) of the Exchange Act), (i) the condensed balance sheet of Holdings
(parent company only) as of the end of such fiscal quarter, prepared in
accordance with Rule 12-04 of Regulation S-X (and any other financial
statements of Holdings for such fiscal quarter delivered to any direct or
indirect equity holder thereof pursuant to the LP Agreement), (ii) the
consolidated balance sheet of Borrower and its Subsidiaries as of the end
of such fiscal quarter and related consolidated statements of income and
cash flows for such fiscal quarter and for the then elapsed portion of the
fiscal year, in comparative form with the consolidated statements of income
and cash flows for the comparable periods in the previous fiscal year, and
notes thereto, all prepared in accordance with Regulation S-X and
accompanied by a certificate of a Financial Officer stating that such
financial statements fairly present, in all material respects, the
consolidated financial condition, results of operations and cash flows of
Borrower and its Subsidiaries as of such date and for such periods in
accordance with GAAP consistently applied, and on a basis consistent with
the financial statements referred to in clause (a)(ii) of this Section
5.01, subject to normal year-end audit adjustments and the absence of
footnotes, (iii) a management report in a form reasonably satisfactory to
the Administrative Agent setting forth results of operations and cash flows
of Borrower and its Subsidiaries as of the end of and for such fiscal
quarter and for the then elapsed portion of the fiscal year, as compared to
budgeted amounts and (iv) a management's discussion and analysis of the
financial condition and results of operations for such fiscal quarter and
the then elapsed portion of the fiscal year, as compared to the comparable
periods in the previous fiscal year;
(c) Financial Officer's Certificate. (i) Concurrently with any
delivery of financial statements under paragraphs (a) or (b) above, a
Compliance Certificate certifying that no Default has occurred or, if such
a Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto; (ii)
concurrently with any delivery of financial statements under subparagraph
(a) or (b) above, a Compliance Certificate setting forth computations in
reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with Sections 6.05(f) and 6.08 (including the aggregate amount
of Excluded Issuances for such period and the uses therefor) and, in the
case of paragraph (a) above, setting forth Borrower's calculation of Excess
Cash Flow; and (iii) in the case of paragraph (a) above, a report of the
accounting firm opining on or certifying such financial statements stating
that, while such audit was conducted with respect to accounting matters and
was not specifically directed at determining the existence of a Default, in
the course of its regular audit of the financial statements of Holdings and
its Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm obtained no knowledge
that any Default has occurred or, if in the opinion of such accounting firm
such a Default has occurred, specifying the nature and extent thereof;
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(d) Financial Officer's Certificate Regarding Collateral. Concurrently
with any delivery of financial statements under paragraph (a) above, a
certificate of a Financial Officer setting forth the information required
pursuant to the Perfection Certificate Supplement or confirming that there
has been no change in such information since the date of the Perfection
Certificate or latest Perfection Certificate Supplement;
(e) Public Reports. Promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other
materials filed by any Company with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
to holders of its Indebtedness pursuant to the terms of the documentation
governing such Indebtedness (or any trustee, agent or other representative
therefor), as the case may be;
(f) Management Letters. Promptly after the receipt thereof by any
Company, a copy of any "management letter" received by any such person from
its certified public accountants and the management's responses thereto;
(g) Budgets. No later than 30 days after the first day of each fiscal
year of Borrower, a consolidated budget in form reasonably satisfactory to
the Administrative Agent (including sources and uses of cash and balance
sheets) prepared by Borrower for (i) each fiscal quarter of such fiscal
year prepared in detail and (ii) each of the five years immediately
following such fiscal year prepared in summary form, in each case, of
Borrower and its Subsidiaries, with appropriate presentation and discussion
of the principal assumptions upon which such budgets are based, accompanied
by the statement of a Financial Officer of Borrower to the effect that the
budget of Borrower is a reasonable estimate for the period covered thereby;
(h) Annual Meetings with Lenders. Within 120 days after the close of
each fiscal year of Holdings, Holdings and Borrower shall, at the request
of the Administrative Agent or Required Lenders, hold a meeting (at a
mutually agreeable location and time) with all Lenders who choose to attend
such meeting at which meeting shall be reviewed the financial results of
the previous fiscal year and the financial condition of the Companies and
the budgets presented for the current fiscal year of the Companies; and
(i) Other Information. Promptly, from time to time, such other
information regarding the operations, business affairs and financial
condition of any Company, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.02. Litigation and Other Notices. Furnish to the Administrative
Agent and each Lender prompt written notice of the following (after the same
shall have come to the attention of a Responsible Officer):
(a) any Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect
thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity by or before any Governmental
Authority, (i) against any Company or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect or (ii) with
respect to any Loan Document;
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(c) any development that has resulted in, or could reasonably be
expected to result in a Material Adverse Effect;
(d) the occurrence of a Casualty Event; and
(e) the incurrence of any material Lien (other than a Permitted
Collateral Lien) on any of the Collateral.
SECTION 5.03. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section 6.05
or, in the case of any Subsidiary, where the failure to perform such
obligations, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
with all applicable Requirements of Law (including any and all zoning, building,
Environmental Law, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Real Property) and decrees
and orders of any Governmental Authority, whether now in effect or hereafter
enacted, except where the failure to comply, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect; pay and
perform its obligations under all Leases and Acquisition Documents, except where
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect; and at all times maintain and preserve all property material to
the conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times; provided that nothing in this Section 5.03(b)
shall prevent (i) sales of assets, consolidations or mergers by or involving any
Company in accordance with Section 6.05; (ii) the withdrawal by any Company of
its qualification as a foreign corporation in any jurisdiction where such
withdrawal, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect; or (iii) the abandonment by any Company
of any rights, franchises, licenses, trademarks, trade names, copyrights or
patents that such person reasonably determines are not useful to its business.
SECTION 5.04. Insurance. (a) Keep its insurable property adequately insured
at all times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks as is customary with companies
in the same or similar businesses operating in the same or similar locations,
including insurance with respect to Mortgaged Properties and other properties
material to the business of the Loan Parties and their respective Subsidiaries
against such casualties and contingencies and of such types and in such amounts
with such deductibles as is customary in the case of similar businesses
operating in the same or similar locations (including, without limitation, (i)
physical hazard insurance on an "all risk" basis, (ii) commercial general
liability against claims for bodily injury, death or property damage covering
any and all insurable claims, (iii) explosion insurance in respect of any
boilers, machinery or similar apparatus constituting Collateral, (iv) business
interruption insurance, (v) worker's compensation insurance as may be required
by any Requirement of Law and (vi) such other insurance against risks as the
Administrative Agent may from time to time require); maintain such other
insurance as may be required by law (such policies to be in such form and
amounts and having such coverage as may be reasonably satisfactory to the
Administrative Agent and the Collateral Agent); and with respect to physical
hazard insurance neither Collateral Agent nor the Borrower (or the applicable
Loan Party) shall agree to the adjustment of any claim thereunder without the
consent of the other (such consent not to be
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unreasonably withheld or delayed, and such consent of Borrower (or the
applicable Loan Party) not to be required following the occurrence and during
the continuance of an Event of Default).
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Collateral Agent of written notice
thereof, (ii) name the Collateral Agent as mortgagee (in the case of property
insurance) or additional insured on behalf of the Secured Parties (in the case
of liability insurance) or loss payee (in the case of property insurance), as
applicable, (iii) if reasonably requested by the Collateral Agent, include a
breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Collateral Agent.
(c) Notify the Administrative Agent and the Collateral Agent immediately
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.04 is taken out
by any Company; and promptly deliver to the Administrative Agent and the
Collateral Agent a duplicate original copy of such policy or policies.
(d) With respect to each Mortgaged Property, obtain flood insurance in such
total amount as the Administrative Agent or the Required Lenders may from time
to time require, if at any time the area in which any improvements located on
any Mortgaged Property is designated a "flood hazard area" in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), and otherwise comply with the National Flood Insurance
Program as set forth in the Flood Disaster Protection Act of 1973, as amended
from time to time.
(e) Deliver to the Administrative Agent and the Collateral Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
and such supplemental reports with respect thereto as the Administrative Agent
or the Collateral Agent may from time to time reasonably request.
(f) No Loan Party that is an owner of Mortgaged Property shall take any
action that is reasonably likely to be the basis for termination, revocation or
denial of any insurance coverage required to be maintained under such Loan
Party's respective Mortgage or that could be the basis for a defense to any
claim under any Insurance Policy maintained in respect of the Premises, and each
Loan Party shall otherwise comply in all material respects with all Insurance
Requirements in respect of the Premises; provided, however, that each Loan Party
may, at its own expense and after written notice to the Administrative Agent,
(i) contest the applicability or enforceability of any such Insurance
Requirements by appropriate legal proceedings, prosecution of which does not
constitute a basis for cancellation or revocation of any insurance coverage
required under this Section 5.04 or (ii) cause the Insurance Policy containing
any such Insurance Requirement to be replaced by a new policy complying with the
provisions of this Section 5.04.
SECTION 5.05. Obligations and Taxes. (a) Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all Taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien other than a Permitted Lien upon such properties or any part
thereof; provided that such payment and discharge shall not be required with
respect to any such Tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings, the applicable Company shall have set aside on its books adequate
reserves with respect thereto in accordance with GAAP, such contest operates to
suspend collection of the contested obligation, Tax, assessment or charge and
enforcement of a Lien other than a Permitted Lien and, in the case of
Collateral, the applicable Company shall have otherwise complied with the
Contested Collateral Lien Conditions.
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(b) Timely file all material Tax Returns required to be filed by it.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (x) as soon as possible after, and in any event within 10
days after any Responsible Officer of the Companies or their ERISA Affiliates
knows that, any ERISA Event has occurred that, alone or together with any other
ERISA Event could reasonably be expected to result in liability of the Companies
or their ERISA Affiliates in an aggregate amount exceeding $1,000,000 or the
imposition of a Lien, a statement of a Financial Officer of Holdings setting
forth details as to such ERISA Event and the action, if any, that the Companies
propose to take with respect thereto, and (y) upon request by the Administrative
Agent, copies of: (i) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by any Company or any ERISA Affiliate with the
Internal Revenue Service with respect to each Plan; (ii) the most recent
actuarial valuation report for each Plan; (iii) all notices received by any
Company or any ERISA Affiliate from a Multiemployer Plan sponsor or any
governmental agency concerning an ERISA Event; and (iv) such other documents or
governmental reports or filings relating to any Plan (or employee benefit plan
sponsored or contributed to by any Company) as the Administrative Agent shall
reasonably request.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
Keep proper books of record and account in which entries in conformity with GAAP
and all Requirements of Law are made of all dealings and transactions in
relation to its business and activities. Each Company will permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the property of such Company, upon
reasonable notice, at reasonable times and as often as reasonably requested and
to make extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances and condition of any Company with the officers thereof and
independent accountants therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in Section
3.14.
SECTION 5.09. Compliance with Environmental Laws; Environmental Reports.
(a) Comply, and use commercially reasonably efforts to cause all lessees and
other persons occupying Real Property owned, operated or leased by any Company
to comply, in all material respects with all Environmental Laws and
Environmental Permits applicable to its operations and Real Property; obtain and
renew all material Environmental Permits applicable to its operations and Real
Property; and conduct any Response in accordance with Environmental Laws;
provided that no Company shall be required to undertake any Response to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances in accordance with GAAP.
(b) If a Default caused by reason of a breach of Section 3.20 or Section
5.09(a) shall have occurred and be continuing for more than 20 days without the
Companies commencing activities reasonably likely to cure such Default, at the
written request of the Required Lenders through the Administrative Agent,
provide to the Lenders within 45 days after such request, at the expense of
Borrower, an environmental assessment report regarding the matters which are the
subject of such Default, including where appropriate, any soil and/or
groundwater sampling, prepared by an environmental consulting firm and in the
form and substance reasonably acceptable to the Administrative Agent and
indicating the presence or absence of Hazardous Materials and the estimated cost
of any compliance or Response to address them.
(c) Each Loan Party that is an owner of Mortgaged Property shall not
install nor permit to be installed in the Mortgaged Property any Hazardous
Materials, other than in compliance with applicable Environmental Laws.
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SECTION 5.10. Additional Collateral; Additional Guarantors. (a) Subject to
this Section 5.10, with respect to any property acquired after the Closing Date
by Borrower or any other Loan Party that is intended to be subject to the Lien
created by any of the Security Documents but is not so subject (but, in any
event, excluding any property described in Section 5.10(b)) promptly (and in any
event within 30 days after the acquisition thereof): (i) execute and deliver to
the Administrative Agent and the Collateral Agent such amendments or supplements
to the relevant Security Documents or such other documents as the Administrative
Agent or the Collateral Agent shall deem necessary to grant to the Collateral
Agent, for its benefit and for the benefit of the other Secured Parties, a Lien
on such property subject to no Liens other than Permitted Collateral Liens, and
(ii) take all actions necessary to cause such Lien to be duly perfected to the
extent required by such Security Document in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be reasonably requested by the
Administrative Agent. Borrower shall otherwise take such actions and execute
and/or deliver to the Collateral Agent such documents as the Administrative
Agent or the Collateral Agent shall require to confirm the validity, perfection
and priority of the Lien of the Security Documents against such after-acquired
properties or assets.
(b) With respect to any person that is or becomes a Subsidiary after the
Closing Date, promptly (and in any event within 30 days after such person
becomes a Subsidiary) (i) deliver to the Collateral Agent the certificates, if
any, representing all of the Equity Interests of such Subsidiary, together with
undated stock powers or other appropriate instruments of transfer executed and
delivered in blank by a duly authorized officer of such Subsidiary's parent, as
the case may be; and all intercompany notes owing from such Subsidiary to any
Loan Party together with instruments of transfer executed and delivered in blank
by a duly authorized officer of such Loan Party and (ii) cause such new
Subsidiary (A) to execute a Joinder Agreement or such comparable documentation
to become a Subsidiary Guarantor and a joinder agreement to the applicable
Security Agreement in the form annexed thereto, and (B) to take all actions
necessary or advisable in the opinion of the Administrative Agent or the
Collateral Agent to cause the Lien created by the applicable Security Agreement
to be duly perfected to the extent required by such agreement in accordance with
all applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent or the Collateral Agent. Notwithstanding the foregoing, (1)
the Equity Interests required to be delivered to the Collateral Agent pursuant
to clause (i) of this Section 5.10(b) shall not include any Equity Interests of
a Foreign Subsidiary created or acquired after the Closing Date and (2) no
Foreign Subsidiary shall be required to take the actions specified in clause
(ii) of this Section 5.10(b), if, in the case of either clause (1) or (2), doing
so would constitute an investment of earnings in United States property under
Section 956 (or a successor provision) of the Code, which investment would or
could reasonably be expected to trigger an increase in the net income of a
United States shareholder of such Subsidiary pursuant to Section 951 (or a
successor provision) of the Code, as reasonably determined in good faith by the
Board of Directors of Borrower; provided that this exception shall not apply to
(A) Voting Stock of any Subsidiary which is a first-tier controlled foreign
corporation (as defined in Section 957(a) of the Code) representing 66% of the
total voting power of all outstanding Voting Stock of such Subsidiary and (B)
100% of the Equity Interests not constituting Voting Stock of any such
Subsidiary, except that any such Equity Interests constituting "stock entitled
to vote" within the meaning of Treasury Regulation Section 1.956-2(c)(2) shall
be treated as Voting Stock for purposes of this Section 5.10(b).
(c) Each Loan Party will promptly grant to the Collateral Agent, within 60
days of the acquisition thereof, a security interest in and Mortgage on (i) each
Real Property owned in fee by such Loan Party as is acquired by such Loan Party
after the Closing Date and that, together with any improvements thereon,
individually has a fair market value of at least $2,000,000, and (ii) unless the
Collateral Agent otherwise consents, each leased Real Property of such Loan
Party which lease individually has a fair market value of at least $2,000,000,
in each case, as additional security for the Obligations (unless the subject
property is already mortgaged to a third party to the extent permitted by
Section 6.02). Such Mortgages
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shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and the Collateral Agent and shall
constitute valid and enforceable perfected Liens subject only to Permitted
Collateral Liens or other Liens acceptable to the Collateral Agent. The
Mortgages or instruments related thereto shall be duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. Such Loan Party shall otherwise take
such actions and execute and/or deliver to the Collateral Agent such documents
as the Administrative Agent or the Collateral Agent shall require to confirm the
validity, perfection and priority of the Lien of any existing Mortgage or new
Mortgage against such after-acquired Real Property (including, without
limitation, a Title Policy, a Survey and local counsel opinion (in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent) in respect of such Mortgage).
SECTION 5.11. Security Interests; Further Assurances. Promptly, upon the
reasonable request of the Administrative Agent or the Collateral Agent, at
Borrower's expense, 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, any document or instrument supplemental to or confirmatory of the
Security Documents or otherwise deemed by the Administrative Agent or the
Collateral Agent reasonably necessary for the continued validity, perfection and
priority of the Liens on the Collateral covered thereby superior to and prior to
the rights of all third persons other than the holders of Permitted Collateral
Liens and subject to no other Liens except as permitted by the applicable
Security Document, or obtain any consents as may be necessary in connection
therewith. Deliver or cause to be delivered to the Administrative Agent and the
Collateral Agent from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent as the
Administrative Agent and the Collateral Agent shall reasonably deem necessary to
perfect or maintain the Liens on the Collateral pursuant to the Security
Documents. Upon the exercise by the Administrative Agent, the Collateral Agent
or any Lender of any power, right, privilege or remedy pursuant to any Loan
Document which requires any consent, approval, registration, qualification or
authorization of any Governmental Authority, execute and deliver all
applications, certifications, instruments and other documents and papers that
the Administrative Agent, the Collateral Agent or such Lender may so require. If
the Administrative Agent, the Collateral Agent or the Required Lenders determine
that they are required by law or regulation to have appraisals prepared in
respect of the Real Property of any Loan Party constituting Collateral, Borrower
shall provide to the Administrative Agent appraisals that satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of FIRREA and are
otherwise in form and substance satisfactory to the Administrative Agent and the
Collateral Agent.
SECTION 5.12. Information Regarding Collateral. (a) With respect to any
change (i) in any Loan Party's legal name, (ii) in the location of any Loan
Party's chief executive office, (ii) in any Loan Party's identity or
organizational structure, (iii) in any Loan Party's Federal Taxpayer
Identification Number or organizational identification number, if any or (iv) in
any Loan Party's jurisdiction of organization (in each case, including, without
limitation, by merging with or into any other entity, reorganizing, dissolving,
liquidating, reorganizing or organizing in any other jurisdiction), such Loan
Party shall not effect such change until (A) it shall have given the Collateral
Agent and the Administrative Agent not less than 30 days' prior written notice
(in the form of an Officers' Certificate), or such lesser notice period agreed
to by the Collateral Agent, of its intention so to do, clearly describing such
change and providing such other information in connection therewith as the
Collateral Agent or the Administrative Agent may reasonably request and (B) with
respect to such change, such Loan Party shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the perfection and priority of
the security interest of the Collateral Agent for the benefit of the Secured
Parties in the Collateral, if applicable. Each Loan Party agrees to promptly
provide the Collateral Agent with certified Organizational Documents reflecting
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any of the changes described in the preceding sentence. Upon the request of the
Collateral Agent, but, unless a Default has occurred and is continuing, not more
often than once every three months, such Loan Party also agrees to promptly
notify the Collateral Agent of any change in the location of any office in which
it maintains material books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it (including the establishment
of any such new office or facility), other than changes in location to a
Mortgaged Property or a leased property subject to a Landlord Access Agreement.
Borrower also agrees promptly to notify the Administrative Agent and the
Collateral Agent if any material portion of the Collateral is subject to a
Casualty Event.
(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 5.01(a), deliver to the
Administrative Agent and the Collateral Agent a Perfection Certificate
Supplement and a certificate of a Financial Officer and the chief legal officer
of Borrower certifying that all UCC financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
necessary to protect and perfect the security interests and Liens under the
Security Documents for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation
statements to be filed within such period).
ARTICLE VI
NEGATIVE COVENANTS
Each Loan Party covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been canceled or have expired or been fully cash
collateralized and all amounts drawn thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, no Loan Party
will, nor will they cause or permit any Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist,
directly or indirectly, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Loan Documents;
(b) (i) Indebtedness actually outstanding on the Closing Date and
listed on Schedule 6.01(b), (ii) refinancings or renewals thereof; provided
that (A) any such refinancing Indebtedness is in an aggregate principal
amount not greater than the aggregate principal amount of the Indebtedness
being renewed or refinanced, plus the amount of any premiums required to be
paid thereon and fees and expenses associated therewith, (B) such
refinancing Indebtedness has a later or equal final maturity and longer or
equal weighted average life than the Indebtedness being renewed or
refinanced and (C) the covenants, events of default, subordination and
other provisions thereof (including any guarantees thereof) shall be, in
the aggregate, no less favorable to the Lenders than those contained in the
Indebtedness being renewed or refinanced and (iii) the Senior Subordinated
Notes and Senior Subordinated Note Guarantees (including any notes and
guarantees issued in exchange therefor in accordance with the registration
rights document entered into in connection with the issuance of the Senior
Subordinated Notes and Senior Subordinated Note Guarantees);
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(c) Indebtedness under Hedging Obligations that are designed to
protect against fluctuations in interest rates, foreign currency exchange
rates or commodity prices or to exchange fixed rate Indebtedness for
floating rate Indebtedness, in each case not entered into for speculative
purposes; provided that if such Hedging Obligations relate to interest
rates, (a) such Hedging Obligations relate to payment obligations on
Indebtedness otherwise permitted to be incurred by the Loan Documents and
(b) the notional principal amount of such Hedging Obligations at the time
incurred does not exceed the principal amount of the Indebtedness to which
such Hedging Obligations relate;
(d) intercompany Indebtedness of the Companies outstanding to the
extent permitted by Section 6.04(h);
(e) Indebtedness in respect of Purchase Money Obligations, and
refinancings and renewals thereof, in an aggregate amount not to exceed
$10.0 million at any time outstanding;
(f) Indebtedness of Foreign Subsidiaries in an aggregate amount not to
exceed $5.0 million at any time outstanding;
(g) Indebtedness in respect of bid, performance or surety bonds issued
for the account of any Company in the ordinary course of business,
including guarantees or obligations of any Company with respect to letters
of credit supporting such bid, performance or surety obligations (in each
case other than for an obligation for money borrowed);
(h) Contingent Obligations of any Loan Party in respect of
Indebtedness otherwise permitted under Section 6.01;
(i) Capital Lease Obligations resulting from Sale and Leaseback
Transactions incurred by any Loan Party in an aggregate amount not to
exceed $5.0 million at any time outstanding;
(j) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within five Business Days of incurrence;
(k) Indebtedness arising in connection with endorsement of instruments
for deposit in the ordinary course of business;
(l) Holdings Employee Notes in an aggregate amount not to exceed $7.5
million at any time outstanding; and
(m) other Indebtedness of any Company in an aggregate amount not to
exceed $15.0 million at any time outstanding; provided that except for up
to $10.0 million of Capital Lease Obligations resulting from Sale and
Leaseback Transactions, all Indebtedness incurred and outstanding under
this Section 6.01(m) shall be unsecured.
SECTION 6.02. Liens. Create, incur, assume or permit to exist, directly or
indirectly, any Lien on any property now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except (the
"Permitted Liens"):
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(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or delinquent and Liens for taxes,
assessments or governmental charges or levies, which (i) are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which proceedings
(or orders entered in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property or assets subject to any
such Lien or (ii) in the case of any such charge or claim which has or may
become a Lien against any of the Collateral, such Lien and the contest
thereof shall satisfy the Contested Collateral Lien Conditions.
(b) Liens in respect of property of any Company imposed by law, which
were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers', warehousemen's,
materialmen's, landlords', workmen's, suppliers', repairmen's and
mechanics' Liens and other similar Liens arising in the ordinary course of
business, and (i) which do not in the aggregate materially detract from the
value of the property of the Companies, taken as a whole, and do not
materially impair the use thereof in the operation of the business of the
Companies, taken as a whole, (ii) which, if they secure obligations that
are then due and unpaid, are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with GAAP, which proceedings (or orders entered in connection with such
proceedings) have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien and (iii) in the case of any
such Lien which has or may become a Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral
Lien Conditions.
(c) any Lien in existence on the Closing Date and set forth on
Schedule 6.02(c) and any Lien granted as a replacement or substitute
therefor; provided that any such replacement or substitute Lien (i) except
as permitted by Section 6.01(b)(ii)(A), does not secure an aggregate
principal amount of Indebtedness, if any, greater than that secured on the
Closing Date and (ii) does not encumber any property other than the
property subject thereto on the Closing Date (any such Lien, an "Existing
Lien");
(d) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies on or with respect to
any Real Property, in each case whether now or hereafter in existence, not
(i) securing Indebtedness, (ii) individually or in the aggregate materially
impairing the value or marketability of such Real Property and (iii)
individually or in the aggregate materially interfering with the conduct of
the business of the Companies at such Real Property;
(e) Liens arising out of judgments or awards not resulting in a
Default, in respect of which such Company shall in good faith be
prosecuting an appeal or proceedings for review in respect of which there
shall be secured a subsisting stay of execution pending such appeal or
proceedings and, in the case of any such Lien which has or may become a
Lien against any of the Collateral, such Lien and the contest thereof shall
satisfy the Contested Collateral Lien Conditions; provided that the
aggregate amount of all such judgments or awards (and any cash and the fair
market value of any property subject to such Liens) does not exceed
$2,500,000 at any time outstanding;
(f) Liens (other than any Lien imposed by ERISA) (i) imposed by law or
deposits made in connection therewith in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, (ii) incurred in the ordinary course of business
to secure the performance of tenders, statutory obligations (other than
excise taxes), surety, stay, customs and appeal bonds, statutory bonds,
bids, leases, government
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contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money) or (iii) arising by virtue of deposits made in the ordinary course
of business to secure liability for premiums to insurance carriers;
provided that (w) with respect to clauses (i), (ii) and (iii) of this
paragraph (f), such Liens are for amounts not yet due and payable or
delinquent or, to the extent such amounts are so due and payable, such
amounts are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP,
which proceedings (or orders entered in connection with such proceedings)
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien, (x) to the extent such Liens are not
imposed by law, such Liens shall in no event encumber any property other
than cash and Cash Equivalents, (y) in the case of any such Lien against
any of the Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions and (z) the aggregate amount of
deposits at any time pursuant to clause (ii) and clause (iii) of this
paragraph (f) shall not exceed $3.0 million in the aggregate;
(g) Leases of the assets or properties of any Company, in each case
entered into in the ordinary course of such Company's business, so long as
such Leases are subordinate in all respects to the Liens granted and
evidenced by the Security Documents and do not, individually or in the
aggregate, (i) interfere in any material respect with the ordinary conduct
of the business of any Company or (ii) materially impair the use (for its
intended purposes) or the value of the property subject thereto;
(h) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
any Company in the ordinary course of business;
(i) Liens securing Indebtedness incurred pursuant to Section 6.01(e);
provided that (i) the Indebtedness secured by any such Lien (including
refinancings thereof) does not exceed 100% of the cost of the property
being acquired or leased at the time of the incurrence of such Indebtedness
and (ii) any such Liens attach only to the property being financed pursuant
to such Indebtedness and do not encumber any other property of any Company;
(j) rights of setoff and other similar Liens existing solely with
respect to cash and cash equivalents on deposit in one or more accounts
maintained by any Company, in each case granted in the ordinary course of
business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash
management and operating account arrangements, including those involving
pooled accounts and netting arrangements; provided that, unless such Liens
are non-consensual and arise by operation of law, in no case shall any such
Liens secure (either directly or indirectly) the repayment of any
Indebtedness;
(k) Liens on property of a person existing at the time such person is
acquired or merged with or into or consolidated with any Company to the
extent permitted hereunder (and not created in anticipation or
contemplation thereof); provided that such Liens do not extend to property
not subject to such Liens at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders than
such existing Lien;
(l) Liens securing Indebtedness incurred in reliance on Section
6.01(f); provided that (i) such Liens do not extend to, or encumber,
property which constitutes Collateral and (ii) such Liens extend only to
the property (or Equity Interests) of the Foreign Subsidiary incurring such
Indebtedness;
(m) Liens granted pursuant to the Security Documents;
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(n) the filing of financing statements solely as a precautionary
measure in connection with operating leases or consignment of goods;
(o) Liens securing Capital Lease Obligations permitted by Section
6.01(i) or (m), so long as such Liens do not extend to property other than
the property subject to the Sale and Leaseback Transactions to which such
Capital Lease Obligations relate;
(p) the existence of the "equal and ratable" clause in the Senior
Subordinated Note Documents (but not any security interests granted
pursuant thereto); and
(q) Liens incurred in the ordinary course of business of any Company
with respect to obligations that do not in the aggregate exceed $1.0
million at any time outstanding, so long as such Liens, to the extent
covering any Collateral, are junior to the Liens granted pursuant to the
Security Documents;
provided, however, that no consensual Liens shall be permitted to exist,
directly or indirectly, on any Securities Collateral, other than Liens granted
pursuant to the Security Documents.
SECTION 6.03. Sale and Leaseback Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred (a "Sale and Leaseback Transaction") unless
(i) the sale of such property is permitted by Section 6.05 and (ii) any Liens
arising in connection with its use of such property are permitted by Section
6.02.
SECTION 6.04. Investment, Loan and Advances. Directly or indirectly, lend
money or credit or make advances to any person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other person, or purchase or own a futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract (all of the
foregoing, collectively, "Investments"), except that the following shall be
permitted:
(a) the Companies may consummate the Transactions on the Closing Date
in accordance with the provisions of the Transaction Documents;
(b) Investments outstanding on the Closing Date and identified on
Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivables owing
to any of them if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary terms, (ii)
acquire and hold cash and Cash Equivalents, (iii) endorse negotiable
instruments for collection in the ordinary course of business or (iv) make
lease, utility and other similar deposits in the ordinary course of
business;
(d) Hedging Obligations incurred pursuant to Section 6.01(c);
(e) loans and advances to directors, employees and officers of
Borrower and the Subsidiaries for bona fide business purposes and to
purchase Equity Interests of Holdings, not in excess of an aggregate of
$2.0 million at any one time outstanding;
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(f) Borrower and the Subsidiaries may sell or transfer accounts to the
extent permitted by Section 6.05;
(g) Borrower may establish (i) Wholly Owned Subsidiaries to the extent
permitted by Section 6.12 and (ii) non-Wholly Owned Subsidiaries and/or
joint ventures to the extent that Investments in such non-Wholly Owned
Subsidiaries and/or joint ventures shall not exceed $10.0 million at any
time outstanding, after giving effect to amounts returned to Borrower in
cash (including upon disposition);
(h) Investments (i) by Borrower in any Subsidiary Guarantor, (ii) by
any Company in Borrower or any Subsidiary Guarantor, (iii) by a Subsidiary
Guarantor in another Subsidiary Guarantor and (iv) by a Subsidiary that is
not a Subsidiary Guarantor in any other Subsidiary that is not a Subsidiary
Guarantor; provided that any Investment in the form of a loan or advance
shall be evidenced by the Intercompany Note and, in the case of a loan by a
Loan Party, pledged by such Loan Party as Collateral pursuant to the
Security Documents;
(i) Investments in securities of trade creditors or customers in the
ordinary course of business that are received in settlement of bona fide
disputes or pursuant to any plan of reorganization or liquidation or
similar arrangement upon the bankruptcy or insolvency of such trade
creditors or customers;
(j) Investments made by Borrower or any Subsidiary as a result of
consideration received in connection with an Asset Sale made in compliance
with Section 6.05; and
(k) Investments in Subsidiaries of Borrower that are not Guarantors in
an aggregate amount not to exceed $5.0 million at any time outstanding
(with each such Investment being valued as of the date made and without
regard to subsequent changes in value).
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
Wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, engage in any Asset Sale or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property or
assets of any person (or agree to do any of the foregoing at any future time),
except that the following shall be permitted:
(a) Capital Expenditures by Borrower and the Subsidiaries to the
extent permitted by Section 6.08(d);
(b) (i) purchases and other acquisitions of inventory, materials,
equipment and intangible assets in the ordinary course of business, (ii)
subject to Section 2.10(c), Asset Sales of used, worn out, obsolete or
surplus property by any Loan Party in the ordinary course of business and
the abandonment or other Asset Sale of Intellectual Property that is, in
the reasonable judgment of Borrower, no longer economically practicable to
maintain or useful in the conduct of the business of the Companies taken as
a whole and (iii) subject to Section 2.10(c), the sale, lease or other
disposal of any assets; provided that the aggregate consideration received
in respect of all Asset Sales pursuant to this clause (b)(iii) shall not
exceed $10.0 million in any four consecutive fiscal quarters of Borrower
(notwithstanding the foregoing $10.0 million limitation, Sale and Leaseback
Transactions of up to $15.0 million at any time outstanding shall be
permitted);
(c) Investments in compliance with Section 6.04;
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(d) Borrower and the Subsidiaries may lease (as lessee or lessor) real
or personal property and may guaranty such lease, in each case, in the
ordinary course of business;
(e) the Transactions as contemplated by the Transaction Documents;
(f) Borrower and the Subsidiaries may consummate Permitted
Acquisitions;
(g) any Company may merge or consolidate with or into Borrower or any
Subsidiary Guarantor (as long as Borrower or a Subsidiary Guarantor is the
surviving person in such merger or consolidation and remains a Wholly Owned
Subsidiary of Holdings); provided that the Lien on and security interest in
such property granted or to be granted in favor of the Collateral Agent
under the Security Documents shall be maintained or created in accordance
with the provisions of Section 5.10 or Section 5.11, as applicable; and
(h) any Subsidiary may dissolve, liquidate or wind up its affairs at
any time; provided that such dissolution, liquidation or winding-up, as
applicable, could not reasonably be expected to have a Material Adverse
Effect.
To the extent the Required Lenders waive the provisions of this Section 6.05
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 6.05, such Collateral (unless sold to a Company) shall
be sold free and clear of the Liens created by the Security Documents, and the
Agents shall take all actions deemed appropriate in order to effect the
foregoing.
SECTION 6.06. Dividends. Authorize, declare or pay, directly or indirectly,
any Dividends with respect to any Company, except that the following shall be
permitted:
(a) any Subsidiary of Borrower may pay cash Dividends to Borrower or
any Guarantor that is a Wholly Owned Subsidiary of Borrower;
(b) payments to Holdings to permit Holdings, and the subsequent use of
such payments by Holdings, to repurchase or redeem Qualified Capital Stock
of Holdings held by officers, directors or employees or former officers,
directors or employees (or their transferees, estates or beneficiaries
under their estates) of any Company, upon their death, disability,
retirement, severance or termination of employment or service or pay
interest or principal in respect of Holdings Employee Notes; provided that
the aggregate cash consideration paid for all such redemptions and payments
shall not exceed, in any calendar year the sum of (x) $3.0 million (and up
to 50% of such $3 million not used in any calendar year may be carried
forward to the next succeeding (but no other) calendar year), plus (y) the
amount of any Net Cash Proceeds received by or contributed to Borrower from
the issuance and sale since the Issue Date of Qualified Capital Stock of
Holdings to officers, directors or employees of Holdings or any of its
Subsidiaries that have not been used to make any repurchases, redemptions
or payments under this clause (b), plus (z) the net cash proceeds of any
"key-man" life insurance policies of Holdings, Borrower or any Subsidiary
that have not been used to make any repurchases, redemptions or payments
under this clause (b);
(c) (A) to the extent actually used by Holdings or another direct or
indirect parent company of Borrower to pay such taxes, costs and expenses,
payments by Borrower to or on behalf of Holdings in an amount sufficient to
pay franchise taxes and other fees required to maintain the legal existence
of Holdings or another direct or indirect parent corporation of Borrower
and (B) payments by Borrower to or on behalf of Holdings in an amount
sufficient to pay out-of-pocket legal, accounting and filing costs and
other expenses in the nature of overhead in the ordi-
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nary course of business of Holdings or another direct or indirect parent
corporation of Borrower, in the case of clauses (A) and (B) in an aggregate
amount not to exceed $750,000 in any calendar year; and
(d) the making by Borrower of Dividends to Holdings constituting
Permitted Tax Distributions, and the subsequent distribution by Holdings of
all or a portion thereof to the its direct or indirect equity holders.
SECTION 6.07. Transactions with Affiliates. Enter into, directly or
indirectly, any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate of any Company (other than
between or among Borrower and one or more Subsidiary Guarantors), other than on
terms and conditions at least as favorable to such Company as would reasonably
be obtained by such Company at that time in a comparable arm's-length
transaction with a person other than an Affiliate, except that the following
shall be permitted:
(a) Dividends may be paid to the extent provided in Section 6.06;
(b) loans may be made and other transactions may be entered into
between and among any Company and its Affiliates to the extent permitted by
Sections 6.01 and 6.04;
(c) reasonable and customary director, officer and employee
compensation (including bonuses) and other benefits (including retirement,
health, stock option and other benefit plans) and indemnification
arrangements, in each case approved by a majority of the Independent
Directors;
(d) payments to Xxxxxxxx Xxxx & Xxxxxx, LLC and Trimaran Fund
Management, L.L.C. under the Management and Monitoring Agreement as in
effect on the Closing Date or as thereafter amended or supplemented in any
manner that, taken as a whole, is not more adverse to the interests of the
Lenders in any material respect than the Management and Monitoring
Agreement as in effect on the Closing Date;
(e) transactions with customers, clients, suppliers, joint venture
partners or purchasers or sellers of goods and services, in each case in
the ordinary course of business and otherwise not prohibited by the Loan
Documents;
(f) (x) any agreement in effect on the Closing Date and disclosed in
the Offering Memorandum, as in effect on the Closing Date or as thereafter
amended or replaced in any manner, that, taken as a whole, is not more
adverse to the interests of the Lenders in any material respect than such
agreement as it was in effect on the Closing Date or (y) any transaction
pursuant to any agreement referred to in the immediately preceding clause
(x);
(g) the existence of, and the performance by any Loan Party of its
obligations under the terms of, any limited liability company, limited
partnership or other Organizational Document or securityholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party on the Closing Date and which is described
in the Offering Memorandum, as in effect on the Closing Date, and similar
agreements that it may enter into thereafter; provided, however, that the
existence of, or the performance by any Loan Party of obligations under,
any amendment to any such existing agreement or any such similar agreement
entered into after the Closing Date shall only be permitted by this Section
6.07(g) to the extent not more adverse to the interest of the Lenders in
any material respect, when taken as a whole, than any of such documents and
agreements as in effect on the Closing Date;
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(h) sales of Qualified Capital Stock to Affiliates of Borrower not
otherwise prohibited by the Loan Documents and the granting of registration
and other customary rights in connection therewith;
(i) any transaction with an Affiliate where the only consideration
paid by any Loan Party is Qualified Capital Stock; and
(j) the Transactions may be effected.
SECTION 6.08. Financial Covenants.
(a) Maximum Leverage Ratio. Permit the Leverage Ratio, as of the last day
of any Test Period ending during any period set forth in the table below, to
exceed the ratio set forth opposite such period in the table below:
--------------------------------------------------------------------------------
Test Period Leverage Ratio
--------------------------------------------------------------------------------
Closing Date - December 31, 2003 5.70 to 1.00
--------------------------------------------------------------------------------
January 1, 2004 - June 30, 2004 5.40 to 1.00
--------------------------------------------------------------------------------
July 1, 2004 - December 31, 2004 5.10 to 1.00
--------------------------------------------------------------------------------
January 1, 2005 - June 30, 2005 4.80 to 1.00
--------------------------------------------------------------------------------
July 1, 2005 - December 31, 2005 4.40 to 1.00
--------------------------------------------------------------------------------
January 1, 2006 - December 31, 2006 3.80 to 1.00
--------------------------------------------------------------------------------
January 1, 2007 - December 31, 2007 3.60 to 1.00
--------------------------------------------------------------------------------
January 1, 2008 - Term Loan Maturity Date 3.30 to 1.00
--------------------------------------------------------------------------------
(b) Minimum Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio, for any Test Period ending during any period set forth in the
table below, to be less than the ratio set forth opposite such period in the
table below:
--------------------------------------------------------------------------------
Interest Coverage
Test Period Ratio
--------------------------------------------------------------------------------
Closing Date - December 31, 2004 2.00 to 1.00
--------------------------------------------------------------------------------
January 1, 2005 - June 30, 2005 2.10 to 1.00
--------------------------------------------------------------------------------
July 1, 2005 - December 31, 2005 2.25 to 1.00
--------------------------------------------------------------------------------
January 1, 2006 - December 31, 2006 2.50 to 1.00
--------------------------------------------------------------------------------
January 1, 2007 - December 31, 2007 2.75 to 1.00
--------------------------------------------------------------------------------
January 1, 2008 - December 31, 2008 2.90 to 1.00
--------------------------------------------------------------------------------
January 1, 2009 - Term Loan Maturity Date 3.00 to 1.00
--------------------------------------------------------------------------------
(c) Minimum Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio, for any Test Period from and after the Closing Date, to
be less than 1.10 to 1.0.
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(d) Limitation on Capital Expenditures. Permit the aggregate amount of
Capital Expenditures made in any period set forth below, to exceed the amount
set forth opposite such period below:
--------------------------------------------------------------------------------
Period Amount (in millions)
--------------------------------------------------------------------------------
January 1, 2003 - December 31, 2003 $ 9.0
--------------------------------------------------------------------------------
January 1, 2004 - December 31, 2004 $10.50
--------------------------------------------------------------------------------
January 1, 2005 - December 31, 2005 $10.75
--------------------------------------------------------------------------------
January 1, 2006 - December 31, 2006 $11.00
--------------------------------------------------------------------------------
January 1, 2007 - December 31, 2007 $12.00
--------------------------------------------------------------------------------
January 1, 2008 - December 31, 2008 $13.00
--------------------------------------------------------------------------------
January 1, 2009 - Term Loan Maturity Date $14.00
--------------------------------------------------------------------------------
; provided, however, that (x) if the aggregate amount of Capital Expenditures
made in any fiscal year shall be less than the maximum amount of Capital
Expenditures permitted under this Section 6.08(d) for such fiscal year (before
giving effect to any carryover), then an amount of such shortfall not exceeding
50% of such maximum amount (without giving effect to clause (z) below) may be
added to the amount of Capital Expenditures permitted under this Section 6.08(d)
for the immediately succeeding (but not any other) fiscal year, (y) in
determining whether any amount is available for carryover, the amount expended
in any fiscal year shall first be deemed to be from the amount allocated to such
fiscal year (before giving effect to any carryover) and (z) the amount set forth
in the table above for any period may be increased by the amount of Net Cash
Proceeds of Excluded Issuances designated for Capital Expenditures for such
period during such period.
SECTION 6.09. Prepayments of Other Indebtedness; Modifications of
Organizational Documents and Other Documents, etc. Directly or indirectly
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment on or redemption or acquisition for value
of, or any prepayment or redemption as a result of any asset sale, change
of control or similar event of, any Indebtedness outstanding under the
Senior Subordinated Notes or any other Subordinated Indebtedness, except as
otherwise permitted by this Agreement;
(b) amend or modify, or permit the amendment or modification of, any
provision of any Transaction Document in any manner that is adverse in any
material respect to the interests of the Lenders;
(c) amend, modify or change any of its Organizational Documents
(including by the filing or modification of any certificate of designation)
or any agreement to which it is a party with respect to its Equity
Interests (including any shareholders' agreement), or enter into any new
agreement with respect to its Equity Interests, other than any such
amendments, modifications or changes or such new agreements which are not
adverse in any material respect to the interests of the Lenders; provided
that Holdings may issue such Equity Interests, so long as such issuance is
not prohibited by Section 6.11 or any other provision of this Agreement,
and may amend its Organizational Documents to authorize any such Equity
Interests; or
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(d) cause or permit any other obligation (other than the Obligations
and the Guaranteed Obligations) to constitute Designated Senior Debt (as
defined in the Senior Subordinated Note Documents).
SECTION 6.10. Limitation on Certain Restrictions on Subsidiaries. Directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Borrower or any Subsidiary, or
pay any Indebtedness owed to Borrower or a Subsidiary, (b) make loans or
advances to Borrower or any Subsidiary or (c) transfer any of its properties to
Borrower or any Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law; (ii) this Agreement and the
other Loan Documents; (iii) the Senior Subordinated Note Documents; (iv)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of a Subsidiary; (v) customary provisions restricting
assignment of any agreement entered into by a Subsidiary in the ordinary course
of business; (vi) any holder of a Lien permitted by Section 6.02 restricting the
transfer of the asset or assets subject thereto; (vii) restrictions which are
not more restrictive than those contained in this Agreement contained in any
documents governing any Indebtedness incurred after the Closing Date in
accordance with the provisions of this Agreement; (viii) customary restrictions
and conditions contained in any agreement relating to the sale of any property
permitted under Section 6.05 pending the consummation of such sale; (ix) any
agreement in effect at the time such Subsidiary becomes a Subsidiary of
Borrower, so long as such agreement was not entered into in contemplation of
such person becoming a Subsidiary of Borrower; (x) in the case of any joint
venture which is not a Loan Party in respect of any matters referred to in
clauses (b) and (c) above, restrictions in such person's Organizational
Documents or pursuant to any joint venture agreement or stockholders agreements
solely to the extent of the Equity Interests of or assets held in the subject
joint venture or other entity; or (xi) any encumbrances or restrictions imposed
by any amendments or refinancings that are otherwise permitted by the Loan
Documents of the contracts, instruments or obligations referred to in clauses
(i) through (x) above; provided that such amendments or refinancings are, in the
good faith judgment of Holdings' Board of Directors, no more materially
restrictive with respect to such encumbrances and restrictions than those prior
to such amendment or refinancing.
SECTION 6.11. Limitation on Issuance of Capital Stock. (a) With respect to
Holdings, issue any Equity Interest that is not Qualified Capital Stock.
(b) Borrower will not, and will not permit any Subsidiary to, issue any
Equity Interest (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, any Equity Interest,
except (i) for stock splits, stock dividends and additional issuances of Equity
Interests which do not decrease the percentage ownership of Borrower or any
Subsidiaries in any class of the Equity Interest of such Subsidiary; (ii)
Subsidiaries of Borrower formed after the Closing Date in accordance with
Section 6.12 may issue Equity Interests to Borrower or the Subsidiary of
Borrower which is to own such Equity Interests; and (iii) Borrower may issue
common stock that is Qualified Capital Stock to Holdings. All Equity Interests
issued in accordance with this Section 6.11(b), shall, to the extent required by
Sections 5.10 and 5.11 or any Security Agreement, be delivered to the Collateral
Agent for pledge pursuant to the applicable Security Agreement.
SECTION 6.12. Limitation on Creation of Subsidiaries. Establish, create or
acquire any additional Subsidiaries without the prior written consent of the
Required Lenders; provided that, without such consent, Borrower may (i)
establish or create one or more Wholly Owned Subsidiaries of Borrower, (ii)
establish, create or acquire one or more Subsidiaries in connection with an
Investment made pursuant to Section 6.04(g) or 6.04(k) or (iii) acquire one or
more Subsidiaries in connection with a Permitted Acquisition, so long as, in
each case, Section 5.10(b) shall be complied with.
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SECTION 6.13. Business. (a) With respect to Holdings, engage in any
business activities or have any assets or liabilities, other than (i) its
ownership of the Equity Interests of Borrower, (ii) obligations under the Loan
Documents and the LP Agreement, (iii) the issuance of Holdings Employee Notes
and (iv) activities and assets incidental to the foregoing clauses (i) through
(iii).
(b) With respect to Borrower and the Subsidiaries, engage (directly or
indirectly) in any business other than those businesses in which Borrower and
its Subsidiaries are engaged on the Closing Date (or which are substantially
related thereto or are reasonable extensions thereof).
SECTION 6.14. Limitation on Accounting Changes. Make or permit any change
in accounting policies or reporting practices, without the consent of the
Required Lenders, which consent shall not be unreasonably withheld, except
changes that, in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect or are required by GAAP.
SECTION 6.15. Fiscal Year. Change its fiscal year-end to a date other than
December 31.
SECTION 6.16. Lease Obligations. Create, incur, assume or suffer to exist
any obligations as lessee for the rental or hire of real or personal property of
any kind under leases or agreements to lease having an original term of one year
or more that would cause the direct and contingent liabilities of Borrower and
its Subsidiaries, on a consolidated basis, in respect of all such obligations
(other than Capital Lease Obligations) to exceed $3.0 million payable in any
period of 12 consecutive months.
SECTION 6.17. No Further Negative Pledge. Enter into any agreement,
instrument, deed or lease which prohibits or limits the ability of any Loan
Party to create, incur, assume or suffer to exist any Lien upon any of their
respective properties, assets or revenues, whether now owned or hereafter
acquired, or which requires the grant of any security for an obligation if
security is granted for another obligation, except the following: (1) this
Agreement and the other Loan Documents; (2) covenants in documents creating
Liens permitted by Section 6.02 prohibiting further Liens on the assets
encumbered thereby; (3) the Senior Subordinated Note Documents, (4) any other
agreement that does not restrict in any manner (directly or indirectly) Liens
created pursuant to the Loan Documents on any Collateral securing the Loans or
any Interest Rate Agreement and does not require the direct or indirect granting
of any Lien securing any Indebtedness or other obligation by virtue of the
granting of Liens on or pledge of property of any Loan Party to secure the
Obligations, (5) any prohibition or limitation that (a) exists pursuant to
applicable law, (b) consists of customary restrictions and conditions contained
in any agreement relating to the sale of any property permitted under Section
6.05 pending the consummation of such sale, (c) restricts subletting or
assignment of any lease governing a leasehold interest of Borrower or a
Subsidiary, (d) is not more restrictive than those contained in this Agreement
contained in any documents governing any Indebtedness incurred after the Closing
Date in accordance with the provisions of this Agreement, (e) exists in any
agreement in effect at the time such Subsidiary becomes a Subsidiary of
Borrower, so long as such agreement was not entered into in contemplation of
such person becoming a Subsidiary or (f) are imposed by any amendments or
refinancings that are otherwise permitted by the Loan Documents of the
contracts, instruments or obligations referred to in clauses (1) through (5);
provided that such amendments and refinancings are, in the good faith judgment
of Holdings' Board of Directors, no more materially restrictive with respect to
such prohibitions and limitations than those prior to such amendment or
refinancing.
SECTION 6.18. Limitation on Finance Subsidiary. Finance Subsidiary may not
hold any material assets, become liable for any material obligations, engage in
any trade or business, or conduct any business activity, other than (1) the
issuance of its Equity Interests to Borrower or any Wholly-Owned Subsidiary of
Borrower, (2) the incurrence of Indebtedness as a co-obligor or guarantor, as
the case may be, of the Senior Subordinated Notes, the Loan Documents and any
other Indebtedness that is
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permitted to be incurred by Borrower under the Loan Documents; provided that the
net proceeds of such Indebtedness are retained by Borrower or loaned to or
contributed as capital to one or more of Subsidiaries other than Finance
Subsidiary and (3) activities incidental thereto. Neither Borrower nor any
Subsidiary shall engage in any transactions with Finance Subsidiary in violation
of the immediately preceding sentence.
ARTICLE VII
GUARANTEE
SECTION 7.01. The Guarantee. The Guarantors hereby jointly and severally
guarantee as a primary obligor and not as a surety to each Secured Party and
their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest (including any interest, fees, costs or charges that would accrue
but for the provisions of the Title 11 of the United States Code after any
bankruptcy or insolvency petition under Title 11 of the United States Code) on
the Loans made by the Lenders to, and the Notes held by each Lender of,
Borrower, and all other Obligations from time to time owing to the Secured
Parties by any Loan Party under any Loan Document, 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 or other Guarantor(s) 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.
SECTION 7.02. Obligations Unconditional. The obligations of the Guarantors
under Section 7.01 shall constitute a guaranty of payment and, to the fullest
extent permitted by applicable law, are absolute, irrevocable and unconditional,
joint and several, irrespective of the value, genuineness, validity, regularity
or enforceability of the Guaranteed Obligations of Borrower under this
Agreement, the Notes, if any, 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,
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:
(i) 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;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes, if any, or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Loan Documents or any other agreement or
instrument referred to herein or therein shall be amended or
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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;
(iv) any lien or security interest granted to, or in favor of, Issuing
Bank or any Lender or Agent as security for any of the Guaranteed
Obligations shall fail to be perfected; or
(v) the release of any other Guarantor pursuant to Section 7.09.
The Guarantors hereby expressly waive diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that any
Secured Party exhaust any right, power or remedy or proceed against Borrower
under this Agreement or the Notes, if any, 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 Secured Party 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 Secured Parties 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 Secured Parties, and the obligations and liabilities
of the Guarantors hereunder shall not be conditioned or contingent upon the
pursuit by the Secured Parties 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 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.
SECTION 7.03. Reinstatement. The obligations of the Guarantors under this
Article VII shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of Borrower or other Loan Party 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.
SECTION 7.04. 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 Commitments of
the 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 7.01,
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. Any Indebtedness of any Loan Party permitted pursuant to Section
6.01(d) shall be subordinated to such Loan Party's Obligations in the manner set
forth in the Intercompany Note evidencing such Indebtedness.
SECTION 7.05. Remedies. The Guarantors jointly and severally agree that, as
between the Guarantors and the Lenders, the obligations of Borrower under this
Agreement and the Notes, if any, may be declared to be forthwith due and payable
as provided in Article VIII (and shall be deemed to have become automatically
due and payable in the circumstances provided in said Article VIII) for purposes
of Section 7.01, 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
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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 7.01.
SECTION 7.06. Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Article VII constitutes an instrument
for the payment of money, and consents and agrees that any Lender or Agent, at
its sole option, in the event of a dispute by such Guarantor in the payment of
any moneys due hereunder, shall have the right to bring a motion-action under
New York CPLR Section 3213.
SECTION 7.07. Continuing Guarantee. The guarantee in this Article VII is a
continuing guarantee of payment, and shall apply to all Guaranteed Obligations
whenever arising.
SECTION 7.08. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate, limited partnership or limited
liability company law, or any applicable state, federal or foreign bankruptcy,
insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of any Guarantor under Section 7.01 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 7.01, then, notwithstanding any other provision
to the contrary, the amount of such liability shall, without any further action
by such Guarantor, any Loan Party 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.
SECTION 7.09. Release of Guarantors. If, in compliance with the terms and
provisions of the Loan Documents, all or substantially all of the Equity
Interests or assets of any Guarantor are sold or otherwise transferred (a
"Transferred Guarantor") to a person or persons, none of which is Borrower or a
Subsidiary, such Transferred Guarantor shall, upon the consummation of such sale
or transfer, be released from its obligations under this Agreement (including
under Section 11.03 hereof) and its obligations to pledge and grant any
Collateral owned by it pursuant to any Security Document and, in the case of a
sale of all or substantially all of the Equity Interests of the Transferred
Guarantor, the pledge of such Equity Interests to the Collateral Agent pursuant
to the Security Agreements shall be released, and the Collateral Agent shall
take such actions as are necessary to effect each release described in this
Section 7.09 in accordance with the relevant provisions of the Security
Documents.
ARTICLE VIII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) default shall be made in the payment of any principal of any Loan
or any Reimbursement Obligation when and as the same shall become due and
payable, whether at the due date thereof (including a Term Loan Repayment
Date) or at a date fixed for prepayment thereof or by acceleration thereof
or otherwise;
(b) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in
paragraph (a) above) due under any Loan
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Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of Letters
of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(d) default shall be made in the due observance or performance by any
Company of any covenant, condition or agreement contained in Section 5.02,
5.03(a) or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance by any
Company of any covenant, condition or agreement contained in any Loan
Document (other than those specified in (a), (b) or (d) immediately above)
and such default shall continue unremedied or shall not be waived for a
period of 30 days after written notice thereof from the Administrative
Agent or any Lender to Borrower;
(f) any Company shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness (other than the
Obligations), when and as the same shall become due and payable beyond any
applicable grace period or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness, if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or a trustee or other representative on its or
their behalf to cause, such Indebtedness to become due prior to its stated
maturity; provided that it shall not constitute an Event of Default
pursuant to this paragraph (f) unless the aggregate amount of all such
Indebtedness referred to in clauses (i) and (ii) exceeds $2,500,000 at any
one time;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of any Company or the General Partner, or of a
substantial part of the property or assets of any Company or the General
Partner, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law; (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for any Company or the General Partner or for a substantial part of the
property or assets of any Company or the General Partner; or (iii) the
winding-up or liquidation of any Company or the General Partner; and such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;
(h) any Company or the General Partner shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
federal, state or foreign bankruptcy, insolvency, receivership or similar
law; (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described
in clause (g) above; (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for any Company or the General Partner or for a substantial part of the
property or assets of any Company or the General Partner; (iv) file an
answer admitting the material allegations of a petition filed against it in
any such proceeding; (v) make a general assignment for the benefit of
creditors; (vi) become unable, admit in writing its inability or fail
generally to pay its debts as
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they become due; (vii) take any action for the purpose of effecting any of
the foregoing; or (viii) wind up or liquidate;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $2,500,000 shall be rendered against any Company or any
combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of any Company to enforce any such judgment;
(j) an ERISA Event or noncompliance with respect to Foreign Plans
shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other such ERISA Events and noncompliance with
respect to Foreign Plans that have occurred, could reasonably be expected
to result in liability of any Company and its ERISA Affiliates in an
aggregate amount exceeding $2,500,000 (excluding any liability to make
payments to a Multi-Employer Plan resulting from an ERISA Event described
in clauses (f) and (g) of the definition thereof to the extent that such
payments do not exceed in any year the average payments made in the two
years prior to such ERISA Event) or the imposition of a Lien on any assets
of a Company;
(k) any security interest and Lien purported to be created by any
Security Document shall cease to be in full force and effect, or shall
cease to give the Collateral Agent, for the benefit of the Secured Parties,
the Liens, rights, powers and privileges purported to be created and
granted under such Security Documents (including a perfected first priority
security interest in and Lien on, all of the Collateral thereunder (except
as otherwise expressly provided in such Security Document)) in favor of the
Collateral Agent, or shall be asserted by Borrower or any other Loan Party
not to be, a valid, perfected, first priority (except as otherwise
expressly provided in this Agreement or such Security Document) security
interest in or Lien on the Collateral covered thereby;
(l) any Guarantee shall cease to be in full force effect;
(m) any Loan Document or any material provisions thereof shall at any
time and for any reason be declared by a court of competent jurisdiction to
be null and void, or a proceeding shall be commenced by any Loan Party or
any other person, or by any Governmental Authority, seeking to establish
the invalidity or unenforceability thereof, or any Loan Party shall
repudiate or deny that it has any liability or obligation for the payment
of principal or interest or other obligations purported to be created under
any Loan Document;
(n) there shall have occurred a Change in Control; or
(o) the Acquisition shall not have occurred on the Closing Date in
accordance with the terms and conditions of the Acquisition Agreement;
then, and in every such event (other than an event with respect to Holdings,
Borrower or the General Partner described in paragraph (g) or (h) above), and at
any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate forthwith the Commitments and (ii) declare the Loans and
Reimbursement Obligations then outstanding to be forthwith due and payable, in
whole or in part, whereupon the principal of the Loans and Reimbursement
Obligations so declared to be due and payable, together with accrued interest
thereon and any unpaid and accrued Fees and all other liabilities of Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
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kind, all of which are hereby expressly waived by Borrower and the Guarantors,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to Holdings, Borrower or the
General Partner described in paragraph (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans and Reimbursement
Obligations then outstanding, together with accrued interest thereon and any
unpaid and accrued Fees and all other liabilities of Borrower accrued hereunder
and under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by Borrower and the Guarantors, anything
contained herein or in any other Loan Document to the contrary notwithstanding.
ARTICLE IX
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
SECTION 9.01. Collateral Account. (a) The Collateral Agent is hereby
authorized to establish and maintain at its office at 000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, in the name of the Collateral Agent and pursuant to
a Control Agreement, a restricted deposit account designated "Norcraft
Companies, L.P. Collateral Account". Each Loan Party shall deposit into the
Collateral Account from time to time (i) the cash proceeds of any of the
Collateral (including pursuant to any disposition thereof) to the extent
contemplated by Sections 2.10(c)(ii) and 2.10(f)(iii), (ii) the cash proceeds of
any Casualty Event with respect to Collateral, to the extent contemplated herein
or in any other Loan Document, and (iii) any cash such Loan Party is required to
pledge as additional collateral security hereunder pursuant to the Loan
Documents.
(b) The balance from time to time in the Collateral Account shall
constitute part of the Collateral and shall not constitute payment of the
Obligations until applied as hereinafter provided. So long as no Event of
Default has occurred and is continuing or will result therefrom, the Collateral
Agent shall within two Business Days of receiving a request of the applicable
Loan Party for release of cash proceeds (i) from the Collateral Account
constituting Net Cash Proceeds relating to any Casualty Event or Asset Sale
remit such cash proceeds on deposit in the Collateral Account to or upon the
order of such Loan Party, so long as such Loan Party has satisfied the
conditions relating thereto set forth in Section 9.02 and (ii) with respect to
the LC Sub-Account, remit such Net Cash Proceeds on deposit in the LC
Sub-Account to or upon the order of such Loan Party (x) at such time as all
Letters of Credit shall have been terminated and all of the liabilities in
respect of the Letters of Credit have been paid in full or (y) otherwise in
accordance with Section 2.18(i). At any time following the occurrence and during
the continuance of an Event of Default, the Collateral Agent may (and, if
instructed by the Required Lenders as specified herein, shall) in its (or their)
discretion apply or cause to be applied (subject to collection) the balance from
time to time outstanding to the credit of the Collateral Account to the payment
of the Obligations in the manner specified in Section 9.03 hereof subject,
however, in the case of amounts deposited in the LC Sub-Account, to the
provisions of Sections 2.18(i) and 9.03. The Loan Parties shall have no right to
withdraw, transfer or otherwise receive any funds deposited in the Collateral
Account except to the extent specifically provided herein.
(c) Amounts on deposit in the Collateral Account shall be invested from
time to time in Cash Equivalents as the applicable Loan Party (or, after the
occurrence and during the continuance of an Event of Default, the Collateral
Agent) shall determine, which Cash Equivalents shall be held in the name and be
under the control of the Collateral Agent (or any sub-agent); provided that at
any time after the occurrence and during the continuance of an Event of Default,
the Collateral Agent may (and, if instructed by the Required Lenders as
specified herein, shall) in its (or their) discretion at any time and from time
to
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time elect to liquidate any such Cash Equivalents and to apply or cause to be
applied the proceeds thereof to the payment of the Obligations in the manner
specified in Section 9.03 hereof, subject, however, in the case of amounts
deposited in the LC Sub-Account, to the provisions of Section 2.18(i).
(d) Amounts deposited into the Collateral Account as cover for liabilities
in respect of Letters of Credit under any provision of this Agreement requiring
such cover shall be held by the Administrative Agent in a separate sub-account
designated as the "LC Sub-Account" (the "LC Sub-Account") and, subject to
Section 2.18(i), all amounts held in the LC Sub-Account shall constitute
collateral security first for the liabilities in respect of Letters of Credit
outstanding from time to time and second for the other Obligations hereunder (x)
until such time as all Letters of Credit shall have been terminated and all of
the liabilities in respect of Letters of Credit have been paid in full or (y) as
otherwise provided in Section 2.18(i).
SECTION 9.02. Proceeds of Destruction, Taking and Collateral Dispositions.
So long as no Event of Default shall have occurred and be continuing, in the
event the applicable Loan Party elects to reinvest Net Cash Proceeds in respect
of any Asset Sale or Casualty Event in accordance with the provisions of
Sections 2.10(c) and 2.10 (f) as applicable, the Collateral Agent shall receive
at least 10 days' prior notice of each request for payment and shall not release
any part of such Net Cash Proceeds, until the applicable Loan Party has
furnished to the Collateral Agent (i) an Officers' Certificate setting forth:
(A) a brief description of the reinvestment to be made, (B) the dollar amount of
the expenditures to be made, or costs incurred by such Loan Party in connection
with such reinvestment and (C) evidence that the properties or assets acquired
in connection with such reinvestment have a fair market value at least equal to
the amount of such Net Cash Proceeds requested to be released from the
Collateral Account and (ii) all security agreements and Mortgages and other
items required by the provisions of Sections 5.10 and 5.11 to, among other
things, subject such reinvestment properties or assets to the Lien of the
Security Documents in favor of the Collateral Agent, for its benefit and for the
benefit of the other Secured Parties.
SECTION 9.03. Application of Proceeds. The proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums
then held by the Collateral Agent pursuant to this Agreement, promptly by the
Collateral Agent as follows:
(a) First, to the payment of all reasonable costs and expenses, fees,
commissions and taxes of such sale, collection or other realization
including, without limitation, compensation to the Collateral Agent and its
agents and counsel, and all expenses, liabilities and advances made or
incurred by the Collateral Agent in connection therewith, together with
interest on each such amount at the highest rate then in effect under this
Agreement from and after the date such amount is due, owing or unpaid until
paid in full;
(b) Second, to the payment of all other reasonable costs and expenses
of such sale, collection or other realization including, without
limitation, compensation to the other Secured Parties and their agents and
counsel and all costs, liabilities and advances made or incurred by the
other Secured Parties in connection therewith, together with interest on
each such amount at the highest rate then in effect under this Agreement
from and after the date such amount is due, owing or unpaid until paid in
full;
(c) Third, without duplication of amounts applied pursuant to clauses
(a) and (b) above, to the indefeasible payment in full in cash, pro rata,
of (i) interest, principal and other amounts constituting Obligations
(other than Hedging Obligations), in each case equally and ratably in
accordance with the respective amounts thereof then due and owing and (ii)
Hedging Obligations in accordance with the terms thereof; and
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(d) Fourth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Loan Party or its successors or assigns).
In the event that any such proceeds are insufficient to pay in full the
items described in clauses (a) through (e) of this Section 9.03, the Loan
Parties shall remain liable for any deficiency.
ARTICLE X
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 10.01. Appointment. Each Lender hereby irrevocably designates and
appoints each of the Administrative Agent and the Collateral Agent as an agent
of such Lender under this Agreement and the other Loan Documents. Each Lender
irrevocably authorizes each Agent, in such capacity, through its agents or
employees, to take such actions on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such actions and powers as
are reasonably incidental thereto.
SECTION 10.02. Agent in Its Individual Capacity. Each person serving as an
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not an
Agent, and such person 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 an Agent hereunder.
SECTION 10.03. Exculpatory Provisions. No Agent shall have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) no Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that such Agent is required
to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02), and (c) except as expressly set forth in the Loan
Documents, no Agent shall have any duty to disclose or shall be liable for the
failure to disclose, any information relating to Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as such
Agent or any of its Affiliates in any capacity. No Agent shall be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 11.02) or in the
absence of its own gross negligence or willful misconduct. No Agent shall be
deemed to have knowledge of any Default unless and until written notice thereof
is given to such Agent by Borrower or a Lender, and no Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document. In the event that the Administrative Agent receives such notice, the
Administrative Agent shall give notice thereof to the Lenders.
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SECTION 10.04. Reliance by Agent. Each 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 a proper person. Each
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by a proper person, and shall not incur any liability
for relying thereon. Each Agent may consult with legal counsel (who may be
counsel for Borrower), independent accountants and other advisors 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 advisors.
SECTION 10.05. Delegation of Duties. Each Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by such Agent. Each Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Affiliates. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Affiliates of each Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Agent.
SECTION 10.06. Successor Agent. Each Agent may resign as such at any time
upon at least 30 days' prior notice to the Lenders, the Issuing Bank and
Borrower. Upon any such resignation, the Required Lenders shall have the right,
with, if no Default shall have occurred and be continuing, the consent of
Borrower (such consent not to be unreasonably withheld, conditioned or delayed),
to appoint a successor Agent from among the Lenders. If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Agent, which successor shall be a commercial
banking institution organized under the laws of the United States (or any State
thereof) or a United States branch or agency of a commercial banking
institution, in each case, having combined capital and surplus of at least $250
million; provided that if such retiring Agent is unable to find a commercial
banking institution which is willing to accept such appointment and which meets
the qualifications set forth above, the retiring Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Lenders appoint a successor Agent.
Upon the acceptance of its appointment as an Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor.
After an Agent's resignation hereunder, the provisions of this Article X and
Section 11.03 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Affiliates in respect of any actions taken
or omitted to be taken by any of them while it was acting as Agent.
SECTION 10.07. Non-Reliance on Agent and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon the any Agent
or any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
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SECTION 10.08. No Other Administrative Agent. The Lenders from time to time
party to this Agreement shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders. The Syndication Agent and the Documentation Agent shall not have any
right, power, obligation, liability, responsibility or duty under this
Agreement, except as expressly provided herein. Without limiting the foregoing,
neither the Syndication Agent nor the Documentation Agent shall have or be
deemed to have a fiduciary relationship with any Lender. Each Lender hereby
makes the same acknowledgments with respect to the Syndication Agent and the
Documentation Agent as it makes with respect to the Administrative Agent or any
other Lender in this Article X. Notwithstanding the foregoing, the parties
hereto acknowledge that the Documentation Agent and the Syndication Agent hold
such titles in name only, and that such titles confer no additional rights or
obligations relative to those conferred on any Lender hereunder.
SECTION 10.09. Indemnification. The Lenders severally agree to indemnify
each Agent in its capacity as such (to the extent not reimbursed by Borrower or
the Guarantors and without limiting the obligation of Borrower or the Guarantors
to do so), ratably according to their respective outstanding Loans and
Commitments in effect on the date on which indemnification is sought under this
Section 10.09 (or, if indemnification is sought after the date upon which all
Commitments shall have terminated and the Loans and Reimbursement Obligations
shall have been paid in full, ratably in accordance with such outstanding Loans
and Commitments as in effect immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (whether before or after the payment of the Loans and
Reimbursement Obligations) be imposed on, incurred by or asserted against such
Agent in any way relating to or arising out of, the Commitments, this Agreement,
any of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in this
Section 10.09 shall survive the payment of the Loans and all other amounts
payable hereunder.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to any Loan Party, to Borrower at:
c/o Norcraft Companies, L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
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with a copy to:
Xxxxxxxx Xxxx & Xxxxxx, LLC
000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
and to:
c/o Trimaran Capital Partners, LLC
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx, Managing Partner
Telecopy No.: (000) 000-0000
(b) if to the Administrative Agent or the Collateral Agent, to it at:
UBS AG, Stamford Branch
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No.: (000) 000-0000; and
(c) if to a Lender, to it at its address (or telecopy number) set
forth on the applicable Lender Addendum or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or by certified or registered mail, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this Section 11.01 or
in accordance with the latest unrevoked direction from such party given in
accordance with this Section 11.01 and failure to deliver courtesy copies of
notices and other communications shall in no event affect the validity or
effectiveness of such notices and other communications.
SECTION 11.02. Waivers; Amendment. (a) No failure or delay by any Agent,
the Collateral Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of each Agent, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 11.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
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(b) Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the written consent of the Required Lenders; provided
that no such agreement shall:
(i) increase the Commitment of any Lender without the written consent
of such Lender;
(ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any Fees payable hereunder,
without the written consent of each Lender affected thereby;
(iii) postpone or extend the maturity of any Loan, or any scheduled
date of payment of or the installment otherwise due on the principal amount
of any Term Loan under Section 2.09, or the required date of payment of any
Reimbursement Obligation, or any date for the payment of any interest or
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment or
postpone the scheduled date of expiration of any Letter of Credit beyond
the Revolving Maturity Date, without the written consent of each Lender
affected thereby;
(iv) change Section 2.14(b) or (c) in a manner that would alter the
pro rata sharing of payments or setoffs required thereby, without the
written consent of each Lender;
(v) change the percentage set forth in the definition of "Required
Lenders" or any other provision of any Loan Document (including this
Section 11.02) specifying the number or percentage of Lenders (or Lenders
of any Class) required to waive, amend or modify any rights thereunder or
make any determination or grant any consent thereunder, without the written
consent of each Lender (or each Lender of such Class, as the case may be);
(vi) release Holdings or any Subsidiary Guarantor from its Guarantee
(except as expressly provided in Article VII), or limit its liability in
respect of such Guarantee, without the written consent of each Lender;
(vii) release all or substantially all of the Collateral from the
Liens of the Security Documents or alter the relative priorities of the
Obligations entitled to the Liens of the Security Documents (except in
connection with securing additional Obligations equally and ratably with
the other Obligations), in each case without the written consent of each
Lender; or
(viii) without the consent of the Required Lenders and Term Loan
Lenders holding more than 50% of the principal amount of the outstanding
Term Loans, reduce the amount of, or extend the date of, any scheduled
payment on the Term Loans required to be made under Section 2.09, change
the order of application of prepayments among Term Loans and Revolving
Commitments under Section 2.10(h) or change the application of prepayments
of Term Loans set forth in Section 2.10(h) to the remaining scheduled
amortization payments to be made thereon under Section 2.09;
provided, further, that (1) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender without the prior written consent of
the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case
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may be, (2) any waiver, amendment or modification of this Agreement that by its
terms affects the rights or duties under this Agreement of the Revolving Lenders
(but not the Term Loan Lenders), or the Term Loan Lenders (but not the Revolving
Lenders) may be effected by an agreement or agreements in writing entered into
by Borrower and requisite percentage in interest of the affected Class of
Lenders that would be required to consent thereto under this Section 11.02 if
such Class of Lenders were the only Class of Lenders hereunder at the time and
(3) any waiver, amendment or modification prior to the achievement of a
Successful Syndication may not be effected without the written consent of UBS
Loan Finance LLC, as a Lender.
(c) If, in connection with any proposed change, waiver, discharge or
termination of the provisions of this Agreement as contemplated by Section
11.02(b) (other than clause (iii) of such Section), the consent of the Required
Lenders is obtained but the consent of one or more of such other Lenders whose
consent is required is not obtained, then Borrower shall have the right to
replace all, but not less than all, of such non-consenting Lender or Lenders (so
long as all non-consenting Lenders are so replaced) with one or more persons
pursuant to Section 2.16 so long as at the time of such replacement each such
new Lender consents to the proposed change, waiver, discharge or termination;
provided, however, that Borrower shall not have the right to replace a Lender
solely as a result of the exercise of such Lender's rights (and the withholding
of any required consent by such Lender) pursuant to clause (iii) of Section
11.02(b).
SECTION 11.03. Expenses; Indemnity. (a) Borrower and Holdings agree,
jointly and severally, to promptly pay all reasonable out-of-pocket costs and
expenses (including but not limited to expenses incurred in connection with due
diligence and travel, courier, reproduction, printing and delivery expenses)
incurred by the Agents, the Swingline Lender and the Issuing Bank in connection
with the syndication of the credit facilities provided for herein and the
preparation, execution, delivery and administration of this Agreement and the
other Loan Documents and the perfection and maintenance of the Liens securing
the Collateral or in connection with any action, suit or other proceeding
affecting the Collateral or any part thereof commenced, in which action, suit or
proceeding the Administrative Agent is made a party or participates or in which
the right to use the Collateral or any part thereof is threatened, or in which
it becomes necessary in the reasonable judgment of the Administrative Agent to
defend or uphold the Liens granted by the Security Documents (including, without
limitation, any action, suit or proceeding to establish or uphold the compliance
of the Collateral with any Requirements of Law) or in connection with any
amendments, consents, enforcement costs, documentary taxes or waivers of the
provisions hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Agents or any Lender in
connection with the enforcement or protection of, or any rights in connection
with, this Agreement and the other Loan Documents or in connection with the
Loans made or Letters of Credit issued hereunder and the collection of the
Obligations (including in connection with any work-out or restructuring of the
Obligations), including the fees, charges and disbursements of Xxxxxx Xxxxxx &
Xxxxxxx LLP, counsel for the Administrative Agent and the Collateral Agent, and
any auditors, accountants, consultants, appraisers or other advisors and, in
connection with any such enforcement or protection, the fees, charges and
disbursements of any other counsel for the Agents or any Lender.
(b) The Loan Parties agree, jointly and severally, to indemnify the Agents,
each Lender, the Issuing Bank and the Swingline Lender, each Affiliate of any of
the foregoing persons and each of their respective partners, controlling
persons, directors, officers, trustees, employees and agents (each such person
being called an "Indemnitee") against, and to hold each Indemnitee harmless
from, all reasonable out-of-pocket costs and any and all losses, claims,
damages, liabilities, penalties, judgments, suits and related expenses,
including reasonable counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution, delivery, performance, administration or
enforcement of the Loan Documents, (ii) any actual or proposed use of the
proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any
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actual or alleged presence or Release or threatened Release of Hazardous
Materials, on, at, under or from any property owned, leased or operated by any
Company, or any Environmental Claim related in any way to any Company; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted solely from the gross negligence or willful misconduct
of such Indemnitee.
(c) The provisions of this Section 11.03 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans or Reimbursement Obligations, the release of all or a portion of any
Collateral, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Agents, the Issuing Bank or any Lender. All amounts due under this
Section 11.03 shall be payable on written demand therefor accompanied by
reasonable documentation with respect to any reimbursement, indemnification or
other amount requested.
(d) To the extent that Borrower fails to promptly pay any amount required
to be paid by it to the Agents, the Issuing Bank or the Swingline Lender under
paragraph (a) or (b) of this Section 11.03, each Lender severally agrees to pay
to the Agents, the Issuing Bank or the Swingline Lender, as the case may be,
such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against any of the Agents, the Issuing Bank or the Swingline Lender in its
capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total Revolving Exposure,
outstanding Term Loans and unused Commitments at the time.
SECTION 11.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Agents and each Lender (and any attempted
assignment or transfer by Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the other Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender shall have the right at any time to assign to one or more
banks, insurance companies, investment companies or funds or other institutions
(other than Borrower, Holdings or any Affiliate or Subsidiary thereof) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender, an Affiliate of a Lender or
a Lender Affiliate, each of the Administrative Agent and, after the achievement
of a Successful Syndication, Borrower (and, in the case of an assignment of all
or a portion of a Revolving Commitment or any Lender's obligations in respect of
its LC Exposure or Swingline Exposure, the Issuing Bank and the Swingline
Lender) must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed), (ii) except in the case of an
assignment to a Lender, an Affiliate of a Lender or a Lender Affiliate, any
assignment made in connection with the primary syndication of the Commitment and
Loans by the Arranger or an assignment of the entire remaining amount of the
assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administra-
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tive Agent) shall not be less than $1.0 million, unless each of Borrower and the
Administrative Agent otherwise consent, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement, except that this clause (iii) shall
not be construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one Class of Commitments
or Loans, (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance in the form of Exhibit B,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and provided, further that (i) any consent of
Borrower otherwise required under this paragraph shall not be required if a
Default has occurred and is continuing and (ii) in the case of an assignment to
an Affiliate or a Lender Affiliate of the assigning Lender, such assignment
shall be effective between such Lender and its Affiliate or Lender Affiliate
immediately without compliance with the conditions for assignment under this
Section 11.04(b) or Section 11.04(d), but shall not be effective with respect to
Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or
any Lender, and Borrower, the Administrative Agent, the Issuing Bank, the
Swingline Lender and each Lender shall be entitled to deal solely with such
assigning Lender under any such assignment, in each case, until the conditions
for assignment under this Section 11.04(b) and Section 11.04(d) have been
complied with. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section 11.04, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement (provided that any
liability of Borrower to such assignee under Section 2.12, 2.13 or 2.15 shall be
limited to the amount, if any, that would have been payable thereunder by
Borrower in the absence of such assignment, except to the extent any such
amounts are attributable to a Change in Law occurring after the date of such
assignment), and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.12, 2.13, 2.15 and 11.03).
(c) The Administrative Agent, acting for this purpose as an agent of
Borrower, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive in the absence of manifest error, and Borrower, the Administrative
Agent, the Issuing Bank and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by Borrower, the Issuing Bank, the
Collateral Agent, the Swingline Lender and any Lender (with respect to its own
interest only), at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section
11.04 and any written consent to such assignment required by paragraph (b) of
this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender shall have the right at any time, without the consent of
Borrower, the Administrative Agent, the Issuing Bank or the Swingline Lender,
sell participations to one or more banks or other entities (a "Participant") in
all or a portion of such Lender's rights and obligations under this Agreement
-102-
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in clause (i), (ii) or (iii) of the first
proviso to Section 11.02(b) that affects such Participant. Subject to paragraph
(f) of this Section, Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.12, 2.13 and 2.15 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section 11.04. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 11.08 as though it were a Lender;
provided that such Participant agrees to be subject to Section 2.14(c) as though
it were a Lender. Each Lender shall, acting for this purpose as an agent of
Borrower, maintain at one of its offices a register for the recordation of the
names and addresses of its Participants, and the amount and terms of its
participations; provided that no Lender shall be required to disclose or share
the information contained in such register with Borrower or any other party,
except as required by applicable law.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.12, 2.13 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the prior
written consent of Borrower. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.15 unless
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of Borrower, to comply with Section 2.15(e)
and (f) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto. In the case of any
Lender that is a fund that invests in bank loans, such Lender may, without the
consent of Borrower or the Administrative Agent, collaterally assign or pledge
all or any portion of its rights under this Agreement, including the Loans and
Notes or any other instrument evidencing its rights as a Lender under this
Agreement, to any holder of, trustee for, or any other representative of holders
of, obligations owed or securities issued, by such fund, as security for such
obligations or securities.
SECTION 11.05. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Agents, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.14, 2.15 and 11.03 and Article X shall survive
and remain in full force and effect regardless of the consummation of the
transactions
-103-
contemplated hereby, the repayment of the Loans, the payment of the
Reimbursement Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any provision
hereof.
SECTION 11.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and the Fee Letter constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 11.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 11.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates are hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of Borrower
against any and all of the obligations of Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section 11.08
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York, without regard to conflicts of law principles that
would require the application of the laws of another jurisdiction.
(b) Each Loan Party hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Loan Party or its properties in the courts of any jurisdiction.
-104-
(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section 11.09. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
Each party to this Agreement irrevocably consents to service of process in
any action or proceeding arising out of or relating to any Loan Document in the
manner provided for notices in Section 11.01. Nothing in this Agreement or any
other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by applicable law.
SECTION 11.10. Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in any legal proceeding directly or indirectly arising out of or
relating to this Agreement, any other Loan Document or the transactions
contemplated hereby (whether based on contract, tort or any other theory). Each
party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement by, among other things, the mutual waivers and
certifications in this Section 11.10.
SECTION 11.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 11.12. Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' and Lender Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential pursuant to the terms hereof), (b) to the extent
requested by any regulatory authority, (c) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section 11.12, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrower and its
obligations, (g) with the consent of Borrower or (h) to the extent such
Information (i) is publicly available at the time of disclosure or becomes
publicly available other than as a result of a breach of this Section 11.12 or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a non-confidential basis from a source other than Borrower or any
Subsidiary. For the purposes of this Section 11.12, "Information" means all
information received from Borrower or any Subsidiary relating to Borrower or any
Subsidiary or its business that is clearly identified at the time of delivery as
confidential, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by Borrower or any Subsidiary. Any person required to
maintain the confidentiality of Information as provided in this Section 11.12
shall be considered to have complied with its obligation to do so if such person
has exercised the same degree of care to maintain the confidentiality of such
Information as such person would accord to its own confidential information.
-105-
Notwithstanding the foregoing, and notwithstanding any other express or
implied agreement or understanding to the contrary, each of the parties hereto
and their and their Affiliates' respective employees, representatives, and other
agents are authorized to disclose the tax treatment and tax structure of these
transactions to any and all persons, without limitation of any kind. Each of the
parties hereto may disclose all materials of any kind (including opinions or
other tax analyses) insofar as they relate to the tax treatment and tax
structure of the transactions contemplated by the Loan Documents. This
authorization is retroactively effective to the commencement of the first
discussions between or among any of the parties regarding the transactions
contemplated hereby and by the other Loan Documents, but does not extend to
disclosure of any other information including (without limitation) (a) the
identities of participants or potential participants in the transactions, (b)
the existence or status of any negotiations, (c) any pricing or other financial
information or (d) any other term or detail not related to the tax treatment and
tax structure of the transactions contemplated by the Loan Documents.
SECTION 11.13. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively, the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 11.13 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 11.14. Lender Addendum. Each Lender to become a party to this
Agreement on the date hereof shall do so by delivering to the Administrative
Agent a Lender Addendum duly executed by such Lender, Borrower and the
Administrative Agent.
SECTION 11.15. Obligations Absolute. To the fullest extent permitted by
applicable law, all obligations of the Loan Parties hereunder shall be absolute
and unconditional irrespective of:
(a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Loan Party;
(b) any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto against any other Loan
Party;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from any Loan Document or any
other agreement or instrument relating thereto;
(d) any exchange, release or non-perfection of any other Collateral,
or any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Obligations;
(e) any exercise or non-exercise, or any waiver of any right, remedy,
power or privilege under or in respect hereof or any Loan Document; or
-106-
(f) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, the Loan Parties.
[Signature Pages Follow]
-107-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
NORCRAFT COMPANIES, L.P.,
as Borrower
By: NORCRAFT GP, L.L.C., its general partner
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Person
NORCRAFT HOLDINGS, L.P.,
as a Guarantor
By: NORCRAFT GP, L.L.C., its general partner
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Person
NORCRAFT FINANCE CORP.,
as a Subsidiary Guarantor
By: /s/ Xxxxx Xxx
----------------------------------------
Name: Xxxxx Xxx
Title: Vice President
NORCRAFT CANADA CORPORATION,
as a Subsidiary Guarantor
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
UBS SECURITIES LLC, as Bookmanager and
Lead Arranger
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: ED
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx XX
Title: Director
UBS AG, STAMFORD BRANCH, as Issuing Bank,
Administrative Agent and Collateral Agent
By: /s/ Xxxxxxx X. Saint
----------------------------------------
Name: Xxxxxxx X. Saint
Title: Associate Director, Banking
Products Service
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Associate Director, Banking
Products Services, US
UBS LOAN FINANCE LLC, as
Swingline Lender
By: /s/ Xxxxxxx X. Saint
----------------------------------------
Name: Xxxxxxx X. Saint
Title: Associate Director, Banking
Products Services, US
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Associate Director, Banking
Products Services, US
WACHOVIA CAPITAL MARKETS, LLC,
as Co-Arranger
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
CIT LENDING SERVICES CORPORATION,
as Documentation Agent
By: /s/ Xxxx X. Xxxxxx, XX
----------------------------------------
Name: Xxxx X. Xxxxxx, XX
Title: Vice President
Annex I
Applicable Margin for Revolving Loans
-------------------------------------
Leverage Ratio Eurodollar Loans ABR Loans Applicable Fee
-------------- ---------------- --------- --------------
Level I 2.75% 1.75% 0.500%
=>4.0:1.0
Level II 2.50% 1.50% 0.500%
<4.0:1.0 but
=>3.5:1.0
Level III 2.25% 1.25% 0.375%
<3.5:1.0 but
=>3.0:1.0
Level IV 2.00% 1.00% 0.375%
<3.0:1.0
Applicable Margin for Term Loans
--------------------------------
Leverage Ratio Eurodollar Loans ABR Loans
-------------- ---------------- ---------
Level I 3.25% 2.25%
=>3.75:1.0
Level II 3.00% 2.00%
<3.75:1.0
Each change in the Applicable Margin or Applicable Fee resulting from a
change in the Leverage Ratio shall be effective with respect to all Loans and
Letters of Credit outstanding on and after the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.01(a) or (b) and Section 5.01(c), respectively, indicating such change
until the date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change. Notwithstanding the
foregoing, the Leverage Ratio shall be deemed to be in Level I in each of the
above tables (A) from the Closing Date to the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.01(a) or (b) and Section 5.01(c) for the fiscal period ending March
31, 2004 and (B) at any time (i) during which Borrower has failed to deliver the
financial statements and certificates required by Section 5.01(a) or (b) and
Section 5.01(c), respectively and (ii) during the existence of an Event of
Default.
Amortization Table
-------------------------------------
Term
Date Loan Amount
-------------------------------------
March 31, 2004 $1,250,000
-------------------------------------
June 30, 2004 $1,250,000
-------------------------------------
September 30, 2004 $1,250,000
-------------------------------------
December 31, 2004 $1,250,000
-------------------------------------
March 31, 2005 $1,250,000
-------------------------------------
June 30, 2005 $1,250,000
-------------------------------------
September 30, 2005 $1,250,000
-------------------------------------
December 31, 2005 $1,250,000
-------------------------------------
March 31, 2006 $1,875,000
-------------------------------------
June 30, 2006 $1,875,000
-------------------------------------
September 30, 2006 $1,875,000
-------------------------------------
December 31, 2006 $1,875,000
-------------------------------------
March 31, 2007 $1,875,000
-------------------------------------
June 30, 2007 $1,875,000
-------------------------------------
September 30, 2007 $1,875,000
-------------------------------------
December 31, 2007 $1,875,000
-------------------------------------
March 31, 2008 $2,500,000
-------------------------------------
June 30, 2008 $2,500,000
-------------------------------------
September 30, 2008 $2,500,000
-------------------------------------
December 31, 2008 $2,500,000
-------------------------------------
March 31, 2009 $2,500,000
-------------------------------------
June 30, 2009 $2,500,000
-------------------------------------
September 30, 2009 $2,500,000
-------------------------------------
Term Loan Maturity Date $2,500,000
-------------------------------------
Credit Agreement Rider
Schedule 1.01(a)
Mortgaged Property
------------------
-------------------------------
Property Location
-------------------------------
00 Xxxx 0/xx/ Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxx Xxxxxx
-------------------------------
0000 Xxx 000 Xxxx
Xxxxxxx, XX 00000
Xxxxxxxx County
-- ----------------------------
000 Xxxxx Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx County
--
000 Xxxxx Xxxxxxxx
Xxxxxx, XX 00000
Xxxxxx County
--
000 Xxxxx Xxxxxxxx
Xxxxxx, XX 00000
Xxxxxx County
-------------------------------
000 Xxxx 00/xx/ Xxxxxx
Xxxxx Xxxxx, XX 00000
Xxxxxxxxx Xxxxxx
-------------------------------
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, XX 00000
El Paso County
-------------------------------
Xxx Xxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Lynchburg County
-------------------------------
0000 Xxxxxxxxxxx Xxxx
Xxxxx Xxxxxxxxxxxx xx
Xxxxxxxxxxx, XX, Xxxxxx
-------------------------------
1
Schedule 1.01(b)
Refinancing Indebtedness To Be Repaid
Credit Agreement, dated as of June 16, 1998 between Norcraft Companies, L.L.C.
as Borrower and Xxxxxx Financial, Inc. as Agent and Lender, as amended.
2
Schedule 1.01(c)
Subsidiary Guarantors
Norcraft Finance Corp.
Norcraft Canada Corporation
3
Schedule 3.03
Governmental Approvals; Compliance with Laws
None.
4
Schedule 3.06(b)
Real Property
-----------------------------------------------------------------------------------------------------------------------
Owned /
Property Location Leased Landlord Lease Agreement Consents Required
-----------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx Leased OPUS Indenture of Lease Required consents obtained.
Avenue Northwest, dated September 18,
Suite 100 L.L.C. 1998 by and between
Eagan, MN OPUS Northwest,
L.L.C.and Norcraft
Companies, L.L.C.
-----------------------------------------------------------------------------------------------------------------------
2601 Minnesota Leased PAL, Inc. Lease dated May 9, Landlord consent is required
Avenue 2003 by and between upon change in control of
Suite 105 Pal, Inc. and Norcraft owner, provided no consent is
Sioux Falls, SD Companies, L.L.C. required in connection with a
57105 d/b/a Kitchen and transfer of all or substantially
Bath Ideas. all of the voting capital stock or
controlling ownership interest
upon a sale to another person.
-----------------------------------------------------------------------------------------------------------------------
000 Xxxx Xxxxxx Leased Xxxxxx'x Frame Lease dated June 23, Landlord consent required to
Xxxxxx, XX 00000 Shop 2003 by and between encumber the lease.
Xxxxxx'x Frame Shop
and Ultracraft
Company.
-----------------------------------------------------------------------------------------------------------------------
000 Xxxxxxxxxx Xxx Leased Copperwood Lease dated April 17, Landlord consent is required to
Suite 1L Partners, L.P. 2002 by and between mortgage or encumber Lessee's
Xxx Xxxxx, XX 00000 Copperwood Partners, interest in the property.
L.P. and Norcraft
Companies, L.L.C.
-----------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxx Xxxxxx Leased AMB-SGP CIF- Industrial Multi- Required consents obtained.
Xxx Xxxxxxx, XX 00000 I, LLC Tenant Lease, dated
November 1, 2002 by
and between AMB-
SGP CIF-I and
Norcraft Companies.
-----------------------------------------------------------------------------------------------------------------------
9861 Xxxxxx Xxxxx Leased Tampa East Lease dated August Required consents obtained
Drive Flexpace, ltd. 31, 2001 between
Xxxxx, XX 00000 Tampa East
Flexxpace, Ltd. and
Norcraft Companies,
L.L.C.
-----------------------------------------------------------------------------------------------------------------------
5
------------------------------------------------------------------------------------------------------------------------------
Owned /
Property Location Leased Landlord Lease Agreement Consents Required
------------------------------------------------------------------------------------------------------------------------------
0000 X. Xxxxxxxxxx Leased PS Business Lease dated April 25, Landlord consent is required to
Drive #133 Parks L.P. 2000 between PS mortgage or encumber Lessee's
Xxxxx, XX 00000 Business Parks L.P. interest in the property.
and Norcraft
Companies, L.L.C.
------------------------------------------------------------------------------------------------------------------------------
1925 X. Xxxxxxx Leased Bullseye / Lease dated December No provisions.
Blvd. Providence 24, 2002 between
Suite A Square, Inc. Bullseye/Providence
Xxxxxxx, XX 00000 Square, Inc. and
Norcraft Companies,
L.L.C.
------------------------------------------------------------------------------------------------------------------------------
Pinellas County Idea Leased Encor Associates Lease Agreement Notice must be given to
Ctr. Ltd. Partnership dated September 11, Landlord if Tenant is a non-
00000 XX Xxxxxxx 0000 by and between publicly held corporation and
N Encor Associates Ltd. the corporate shares are
Xxxxxxxxxx, XX 00000 Partnership and SMI transferred.
Retail Corp. d/b/a
Kitchen & Bath Ideas.
------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx Xxx Leased Mohave Lease made as of Required consents obtained.
Xxxxx, XX 00000 Holdings, LLC October 21, 2003
between Mohave
Holdings, LLC and
Norcraft Companies,
L.L.C.
------------------------------------------------------------------------------------------------------------------------------
Highway 64 E. Leased J&S Rental, Lease dated June 1, No provision.
Building 4675-14 L.L.C. 2002 between J&S
Asheboro, NC Rentals, L.L.C. and
UltraCraft Company.
------------------------------------------------------------------------------------------------------------------------------
Sioux Falls , SD Leased Xxxx Xxxxxxxxx Lease dated August No provision.
Bargain Center 1997 between
0000 X Xxxxxx Xxxx Xxxxxxxxx xxx
Xxxxx Xxxxx, XX StarMark.
57104
------------------------------------------------------------------------------------------------------------------------------
00 Xxxx 0/xx/ Xxxxxx Owned Not applicable. Not applicable. Not applicable.
North
Xxxxxxxxxx, XX
00000
------------------------------------------------------------------------------------------------------------------------------
0000 Xxx 000 Xxxx Owned Not applicable. Not applicable. Not applicable.
Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------------
6
-------------------------------------------------------------------------------------------------------------------------------
Owned /
Property Location Leased Landlord Lease Agreement Consents Required
------------------------------------------------------------------------------------------------------------------------------
000 Xxxxx Xxxxxxxx Owned Not applicable. Not applicable. Not applicable.
Road
Xxxxxx, XX 00000
--
000 Xxxxx Xxxxxxxx
Xxxxxx, XX 00000
--
000 Xxxxx Xxxxxxxx
Xxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------------
000 Xxxx 00/xx/ Xxxxxx Owned Not applicable. Not applicable. Not applicable.
Xxxxx Xxxxx, XX
00000
------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxx Xxxxxx Owned Not applicable. Not applicable. Not applicable.
Xxxxxxxx Xxxxxxx,
XX 00000
------------------------------------------------------------------------------------------------------------------------------
One Mill Race Drive Owned Not applicable. Not applicable. Not applicable.
Xxxxxxxxx, XX
00000
------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxxxxx Xxxx Owned Not applicable. Not applicable. Not applicable.
Road Rural
Municipality of
Springfield, MB,
Canada
------------------------------------------------------------------------------------------------------------------------------
7
Schedule 3.07(c)
Violations or Proceedings
None.
8
Schedule 3.09(a)
Subsidiaries
------------------------------------------------------------------------------------------------------------------------------
Name of Jurisdiction of Equity Interests Equity Interests Outstanding Rights
Subsidiary Organization Authorized Outstanding on Closing to the Securities
Date
------------------------------------------------------------------------------------------------------------------------------
Norcraft Finance Delaware 100 shares common 100 shares issued to None.
Corp. stock, par value $.01 Norcraft Companies,
L.P.
------------------------------------------------------------------------------------------------------------------------------
Norcraft Canada Nova Scotia 1,000,000,000 3,903,060 None.
Corporation shares, no par value
------------------------------------------------------------------------------------------------------------------------------
9
Schedule 3.09(c)
Corporate Organizational Chart
Trimaran
SKM Cabinet Norcraft
Norcraft Corp. GP,
Corp. L.L.C.
Class 0% XX
Xxxxxx A LP 0% GP
Investors Units Norcraft
Individually Holdings,
L.P.
Managers
100% LP Norcraft
Companies,
L.P.
Norcraft
Norcraft Finance
Canada Corp.
Corporation
10
Schedule 3.11(c)
Material Agreements
Indenture dated as of October 21, 2003 among Norcraft Companies, L.P., Norcraft
Finance Corp., and each of the Guarantors named therein, and U.S. Bank National
Association.
Registration Rights Agreement dated as of October 21, 2003, by and among
Norcraft Companies, L.P., Norcraft Finance Corp. and each of the Guarantors
named therein, and UBS Securities LLC and Wachovia Capital Markets, LLC.
Unit Purchase Agreement, dated August 29, 2003, by and among Norcraft Holdings,
L.L.C., Norcraft Companies, L.L.C., Goense, Bounds & Partners B, L.P. and the
Sellers listed on the schedules thereto (the "Unit Purchase Agreement").
Escrow Agreement, dated August 29, 2003 by and among Xxxxxxxxx Partners, LLC, GB
Management, L.P., Norcraft Holdings, L.L.C. and Bank One, National Association,
attached as Exhibit H to the Unit Purchase Agreement.
Lease, dated October 21, 2003 between Mohave Holdings, LLC and Norcraft
Companies, L.L.C., attached as Exhibit I to the Unit Purchase Agreement.
Amendment and Waiver, dated as of October 2, 2003 by and among Norcraft
Companies, L.L.C., Norcraft Holdings, L.L.C., Xxxxxxxxx Partners, L.L.C., GB
Management, L.P. and the other signatories thereto to the Unit Purchase
Agreement dated as of August 29, 2003 amongst the same parties.
Norcraft Holdings, L.L.C. Limited Liability Company Agreement dated as of August
21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxxxx Xxxxxx,
dated as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxx, dated
as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxx Xxx Xxxxx,
dated as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxx Xxxxxxx, dated
as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxxx,
dated as of October 21, 2003.
Contribution Agreement, dated as of October 21, 2003, by and among Norcraft
Holdings, L.P., Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxxx
Xxxxxx, Xxxx Xxxxxx, HEB Norcraft Holdings Corp. and HMB Norcraft Corp.
Employment Letter from Norcraft Holdings, L.P. to Xxxx Xxxxxx, dated as of
October 21, 2003.
11
Employment Letter from Norcraft Holdings, L.P. to Xxxxxxx Xxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxxx Xxx Xxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxx Xxxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxx Xxxx, dated as of October
21, 2003.
Norcraft GP, L.L.C., Amended and Restated Limited Liability Company Agreement,
dated as of the Closing date among SKM Blocker Corp., TCP Blocker Corp., Xxxx
Xxxxxx and Xxxx Xxxxxx.
Norcraft Holdings, L.P., Agreement of Limited Partnership, dated September 30,
2003.
Norcraft Holdings, L.P., Amended and Restated Agreement of Limited Partnership,
dated October 21, 2003.
Norcraft Companies, L.P. Agreement of Limited Partnership, dated October 21,
2003
Management and Monitoring Agreement between Xxxxxxxx Xxxx & Xxxxxx and Trimaran
Capital Partners and Norcraft Companies, L.P.
12
Schedule 3.20
Environmental Matters
None.
13
Schedule 3.21
Insurance
------------------------------------------------------------------------------------------
Line of Coverage Named Insureds Policy Period Insurer/Policy Number
------------------------------------------------------------------------------------------
Property/ Norcraft GP, L.L.C. 10/21/03- Affiliated FM
Boiler & Machinery Norcraft Holdings, L.P. 10/21/04 TBD
Norcraft Companies, L.P.
Norcraft Finance Corp.
Norcraft Canada Corporation
------------------------------------------------------------------------------------------
General Liability Norcraft GP, L.L.C. 10/21/03- Travelers Ins.
Norcraft Holdings, L.P. 10/21/04 Co. of America
Norcraft Companies, L.P.
Norcraft Finance Corp. TC2J-UB-118D2182-03
------------------------------------------------------------------------------------------
Automobile Norcraft GP, L.L.C. 10/21/03- Travelers Indemnity
Norcraft Holdings, L.P. 10/21/04 Company of America
Norcraft Companies, L.P.
Norcraft Finance Corp. TC2J-UB-118D2169-03
------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Retroactive Premium
Adjustments/Loss Sharing
Line of Coverage Scope of Coverage Arrangements Agent
-------------------------------------------------------------------------------------------------------------------------
Property/ Occurrence Form - All Risk - DEDUCTIBLES: Xxxx Companies
Boiler & Machinery Per Occurrence Blanket Limit $50,000 Deductible except 0000 X Xxxxxxx Xx
$40,000,000 with sublimits for $100,000 Flood; Earthquake Suite 250
various locations and coverages 5% of Value; $100,000 Minimum: Wind Xxxxxxxxx XX 00000
including flood, quake, extra for FL locations 414.443.0000
expense etc. Florida locations Excluded: CA Earthquake
subject to 120% of reported 72 Hours: Off-premises Power
values. Flood and Earthquake: 48 Hours; $50,000: EDP
$2,500,000 per occurrence and ADVx1: Boiler
aggregate. See proposal for ADVx5: Machinery breakdown - Printers
additional sublimits. ADVx10: Machinery breakdown -Veneer
machines and plywood presses
--------------------------------------------------------------------------------------------------------------------------
General Liability Occurrence Form $1,000,000 $50,000 Deductible including Allocated Xxxx Companies
per occurrence limit with Loss Adjustment Expense per accident 0000 X Xxxxxxx Xx
$2,000,000 aggregate on both a adjusted monthly Suite 250
general and products Xxxxxxxxx XX 00000
completed-operations basis. Maximum Loss Content: Unlimited 414.443.0000
Employee Benefits Liability is
included in the form with Claim Handling adjusted monthly
$1,000,000 per occ. $2,000,000 -------------------------------
agg. Limit. $695 Each Claim
Rate: $.44 per Audited Sales
--------------------------------------------------------------------------------------------------------------------------
Automobile Occurrence Form - $1,000,000 $25,000 Deductible: Including Allocated Xxxx Companies
limit with coverage for Hired Loss Adjustment Expense (per accident) 0000 X Xxxxxxx Xx
and Non-owned liability Xxxxx 000
included. Sublimits apply to Xxxxxxxxx XX 00000
coverages including Personal Maximum Loss Content: Unlimited 414.443.0000
Injury Protection, Medical Rate: $2,295 per
Payments, Uninsured and audited power unit - Tractors;
Underinsured Motorists etc. $900 per audited power unit -
Other than Tractors
--------------------------------------------------------------------------------------------------------------------------
14
------------------------------------------------------------------------------------------
Line of Coverage Named Insureds Policy Period Insurer/Policy Number
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Workers' Norcraft Companies, L.P. 10/21/03- Travelers Indemnity
Compensation 10/21/04 Company of Illinois
(AZ, WI)
TRJ-UB-118D2157-03
------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Retroactive Premium
Adjustments/Loss Sharing
Line of Coverage Scope of Coverage Arrangements Agent
----------------------------------------------------------------------------------------------------------------------------
Claim Handling
--------------
.095 x Total Incurred
Adjusted Monthly
----------------------------------------------------------------------------------------------------------------------------
Workers' Workers Compensation $250,000 Deductible: including Xxxx Companies
Compensation coverage A on a statutory Allocated Loss Adjustment Expense, 0000 X Xxxxxxx Xx
(AZ, WI) basis. Coverage B each accident adjusted monthly Suite 250
$1,000,000 for Bodily Xxxxxxxxx XX 00000
Injury - Each Accident, Maximum Loss Content: $6.1018 per 414.443.0000
$1,000,000 for Disease - $100 payroll Not less than $3,000,000
Policy limit and
$1,000,000 for Disease - Charges other than Claim Handling: -
Each Employee Deductible Admin. Expense: $.8339 per
$100 Payroll
Work Comp Ded. Premium: $.0814 per
$100 Payroll
Claim Handling
--------------
.095 x Total Incurred, adjusted monthly
Collateral
----------
Letter of Credit: $1,300,000 in addition
to $2,450,000 in place
----------------------------------------------------------------------------------------------------------------------------
15
-------------------------------------------------------------------------------------------------------
Policy Insurer/Policy Scope of
Line of Coverage Named Insureds Period Number Coverage
-------------------------------------------------------------------------------------------------------
Workers' Norcraft 10/21/03- Travelers Indemnity Workers Compensation
Compensation Companies, L.P. 10/21/04 Company of America coverage A on a statutory basis.
(All Other States) Coverage B $1,000,000 for
TH-UB-118D2145-03 Bodily Injury - Each Accident,
$1,000,000 for Disease - Policy
limit and $1,000,000 for
Disease - Each Employee
-------------------------------------------------------------------------------------------------------
Canadian General Norcraft Canada 10/21/03- Travelers
Liability, Employee Corporation 10/21/04
Benefits Liability, TBD
Employers Liability
and Non-owned Auto
Liability
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Retroactive Premium
Adjustments/Loss Sharing
Line of Coverage Arrangements Agent
-------------------------------------------------------------------------------------
Workers' $250,000 Deductible: including Xxxx Companies
Compensation Allocated Loss Adjustment Expense, 0000 X Xxxxxxx Xx
(All Other States) each accident adjusted monthly Xxxxx 000
Xxxxxxxxx XX 00000
Maximum Loss Content: $6.1018 per 414.443.0000
$100 payroll Not less than $3,000,000
Charges other than Claim Handling: -
Deductible Admin. Expense: $.8339 per
$100 Payroll
Work Comp Ded. Premium: $.0814 per
100 Payroll
Claim Handling
.095 x Total Incurred, adjusted
Monthly
Collateral
xxxxx of Credit: $1,300,000
ALL OF ABOVE ARE
INCLUDED WITH ALL
OTHER STATES
PROGRAM
-------------------------------------------------------------------------------------
Canadian General Xxxx Companies and
Liability, Employee Xxxxxx Xxxxxx Xxxxx
Benefits Liability, & Xxxxxx Limited
Employers Liability (local broker)
and Non-owned Auto 000 Xxx Xxxxxx
Xxxxxxxxx Xxxxx 000
Xxxxxxx,
Xxxxxxx X0X 0X0
Xxxxxx
-------------------------------------------------------------------------------------
16
---------------------------------------------------------------------------------------------------------------------
Policy Insurer/Policy Scope of
Line of Coverage Named Insureds Period Number Coverage
---------------------------------------------------------------------------------------------------------------------
Umbrella Norcraft GP, L.L.C. 10/21/03- Great American Occurrence Form - Bodily
Norcraft Holdings, L.P. 10/21/04 Insurance Company Injury and Property Damage
Norcraft Companies, L.P. combined single limit of
Norcraft Finance Corp. TUU 557 57 71 $35,000,000 per occurrence
Norcraft Canada Corporation & aggregate
---------------------------------------------------------------------------------------------------------------------
Excess Liability Norcraft GP, L.L.C. 10/21/03- National Surety Corp Occurrence Form - Bodily
Norcraft Holdings, L.P. 10/21/04 Injury and Property Damage
Norcraft Companies, L.P. XTM76206473 combined single limit of
Norcraft Finance Corp. $15,000,000 per occurrence
Norcraft Canada Corporation & aggregate
---------------------------------------------------------------------------------------------------------------------
Fiduciary Norcraft GP, L.L.C. 10/21/03- Federal Insurance Co. / $3,000,000 Limit of Liaiblity
Norcraft Holdings, L.P. 10/21/04 Claims Made, Pay on Behalf of,
Norcraft Companies, L.P. Insured's Duty to Defend
---------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Rectroactive Premium
Adjustments/Loss Sharing
Line of Coverage Arrangements Agent
----------------------------------------------------------------------------------
Umbrella Self-Insured Retention: $10,000 Xxxx Companies
0000 X Xxxxxxx Xx
Xxxxx 000
Xxxxxxxxx XX 00000
414.443.0000
----------------------------------------------------------------------------------
Excess Liability Underlying Coverage: Great American Xxxx Companies
$35,000,000 Umbrella 0000 X Xxxxxxx Xx
Xxxxx 000
Xxxxxxxxx XX 00000
414.443.0000
----------------------------------------------------------------------------------
Fiduciary $0 Retention Xxxx Companies
0000 X Xxxxxxx Xx
Xxxxx 000
Xxxxxxxxx XX 00000
414.443.0000
----------------------------------------------------------------------------------
17
------------------------------------------------------------------------------------------------------------------------------------
Retroactive Premium
Line of Policy Insurer/ Adjustment/Loss
Coverage Name Insureds Period Policy Number Scope of Coverage Sharing Arrangements Agent
------------------------------------------------------------------------------------------------------------------------------------
Crime Norcraft GP, L.L.C. 10/21/03- Federal $1,000,000 Limit per $10,000 Deductible Xxxx Companies
Norcraft Holdings, L.P. 10/21/04 Insurance Co./ Occurrence, Loss 0000 X Xxxxxxx Xx
Norcraft Companies, L.P. Discovered Xxxxx 000
Xxxxxxxxx XX 00000
414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
Directors & Norcraft GP, L.L.C. 10/21/03- Houston $10,000,000 - D&O Retentions: Xxxx Companies
Officers/ Norcraft Holdings, L.P. 10/21/04 Casualty Co./ $5,000,000 - EPL $100,000 - D&O 0000 X Xxxxxxx Xx
Employment Norcraft Companies, L.P. 14-MG-03-A2737 Claims Made, Pay on $100,000 - EPL Suite 250
Practices Behalf of, Insured's Xxxxxxxxx XX 00000
Liability Duty to Defend 414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
18
------------------------------------------------------------------------------------------------------------------------------------
Retroactive
Premium
Adjustments/
Policy Insurer/Policy Scope of Loss Sharing
Line of Coverage Named Insureds Period Number Coverage Arrangements Agent
------------------------------------------------------------------------------------------------------------------------------------
Excess Directors and Norcraft GP, L.L.C. 10/21/03- St. Xxxx Mercury $10,000,000 Excess N/A Xxxx Companies
Officers Liability Norcraft Holdings, L.P. 10/21/04 Insurance Company / $10,000,000, 0000 X Xxxxxxx Xx
Norcraft Companies, L.P. 563CM1223 Follow Form Excess Xxxxx 000
Xxxxxxxxx XX 00000
414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
Excess Directors and Norcraft GP, L.L.C. 10/21/03- Travelers / $5,000,000 Excess N/A Xxxx Companies
Officers Liability Norcraft Holdings, L.P. 10/21/04 $20,000,000, 0000 X Xxxxxxx Xx
Norcraft Companies, L.P. Follow Form Excess Xxxxx 000
Xxxxxxxxx XX 00000
414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
19
------------------------------------------------------------------------------------------------------------------------------------
Retroactive
Premium
Adjustments/
Policy Insurer/Policy Scope of Loss Sharing
Line of Coverage Named Insureds Period Number Coverage Arrangements Agent
------------------------------------------------------------------------------------------------------------------------------------
Directors' and Norcraft Companies, 12/31/03 to Great American / $5,000,000, Claims $25,000 Xxxx Companies
Officers' Liability L.L.C. and its 12/31/09 Made, Pay on Behalf Retention 0000 X Xxxxxxx Xx
Run-off Coverage subsidiaries of, Insurer's Duty Suite 250
to Defend Xxxxxxxxx XX 00000
414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
Employment Practices Norcraft Companies, 12/31/03 to Federal Insurance $1,000,000, Claims $100,000 Xxxx Companies
Liability Run-off L.L.C.and its 12/31/09 Co./ Made, Pay on Behalf Retention 0000 X Xxxxxxx Xx
Coverage subsidiaries of,Insurer's Duty Suite 250
to Defend Xxxxxxxxx XX 00000
414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
20
------------------------------------------------------------------------------------------------------------------------------------
Retroactive
Premium
Adjustments/
Policy Insurer/Policy Scope of Loss Sharing
Line of Coverage Named Insureds Period Number Coverage Arrangements Agent
------------------------------------------------------------------------------------------------------------------------------------
Excess Employment Norcraft Companies, L.L.C. 12/31/03- Great American / $2,000,000 excess N/A Xxxx Companies
Practices Liability and its subsidiaries 12/31/09 $1,000,000, Follow 0000 X Xxxxxxx Xx
Form Excess Xxxxx 000
Xxxxxxxxx XX 00000
414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
Fiduciary Liability Norcraft Companies, L.L.C. 12/31/03 to Federal Insurance $3,000,000 Limit, $0 Xxxx Companies
Run-off and its subsidiaries 12/31/09 Co/ Claims Made, Pay on 0000 X Xxxxxxx Xx
Behalf of, Insurer's Suite 250
Duty to Defend Xxxxxxxxx XX 00000
414.443.0000
------------------------------------------------------------------------------------------------------------------------------------
21
Schedule 3.23
Acquisition Documents
Unit Purchase Agreement, dated August 29, 2003, by and among Norcraft Holdings,
L.L.C., Norcraft Companies, L.L.C., Goense, Bounds & Partners B, L.P. and the
Sellers listed on the schedules thereto (the "Unit Purchase Agreement").
Xxxxxxxx & Xxxxx opinion attached as Exhibit A to the Unit Purchase
Agreement.
Terms of the Allstate Legal opinion attached as Exhibit B to the Unit
Purchase Agreement.
Financing Commitment letters attached as Exhibit C to the Unit Purchase
Agreement.
Norcraft Companies, L.L.C. Certificate attached as Exhibit D to the Unit
Purchase Agreement.
Ropes & Xxxx, LLP opinion attached as Exhibit E to the Unit Purchase
Agreement.
Norcraft Holdings, L.L.C. Certificate attached as Exhibit F to the Unit
Purchase Agreement.
Equity Commitment Letters attached as Exhibit G to the Unit Purchase
Agreement.
Escrow Agreement, dated October 21, 2003 by and among Xxxxxxxxx Partners, LLC,
GB Management, L.P., Norcraft Holdings, L.L.C. and Bank One, National
Association, attached as Exhibit H to the Unit Purchase Agreement.
Lease, dated October 21, 2003 between Mohave Holdings, LLC and Norcraft
Companies, L.L.C., attached as Exhibit I to the Unit Purchase Agreement.
Amendment and Waiver, dated as of October 2, 2003 by and among Norcraft
Companies, L.L.C., Norcraft Holdings, L.L.C., Xxxxxxxxx Partners, L.L.C., GB
Management, L.P. and the other signatories thereto to the Unit Purchase
Agreement dated as of August 29, 2003 amongst the same parties.
Norcraft Holdings, L.L.C. Limited Liability Company Agreement dated as of August
21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxxxx Xxxxxx,
dated as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxx, dated
as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxx Xxx Xxxxx,
dated as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxx Xxxxxxx, dated
as of October 21, 2003.
Deferred Compensation Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxxx,
dated as of October 21, 2003.
22
Contribution Agreement, dated as of October 21, 2003, by and among Norcraft
Holdings, L.P., Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxxx
Xxxxxx, Xxxx Xxxxxx, HEB Norcraft Holdings Corp. and HMB Norcraft Corp.
Employment Letter from Norcraft Holdings, L.P. to Xxxx Xxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxxxxx Xxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxxx Xxx Xxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxx Xxxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxxx Xxxxxxx, dated as of
October 21, 2003.
Employment Letter from Norcraft Holdings, L.P. to Xxxx Xxxx, dated as of October
21, 2003.
Norcraft GP, L.L.C., Amended and Restated Limited Liability Company Agreement,
dated as of the Closing date among SKM Blocker Corp., TCP Blocker Corp., Xxxx
Xxxxxx and Xxxx Xxxxxx.
Norcraft Holdings, L.P., Agreement of Limited Partnership, dated September 30,
2003.
Norcraft Holdings, L.P., Amended and Restated Agreement of Limited Partnership,
dated October 21, 2003.
Norcraft Companies, L.P. Agreement of Limited Partnership, dated October 21,
2003
Management and Monitoring Agreement between Xxxxxxxx Xxxx & Xxxxxx and Trimaran
Capital Partners and Norcraft Companies, L.P.
23
Schedule 4.01(f)
Local Counsel
----------------------------------------------------------------------
Jurisdiction Counsel
----------------------------------------------------------------------
Canada Xxxxxx, XxxXxxxx & Xxxxxxxxxxx XXX
00/xx/ Xxxxx, Commodity Exchange Tower
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx X0X 0X0
----------------------------------------------------------------------
Colorado Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
Seventeenth Street Plaza Building
0000 00/xx/ Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000-0000
----------------------------------------------------------------------
Minnesota Xxxxxx & Whitney LLP
Suite 1500, 00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
----------------------------------------------------------------------
Missouri Xxxxxxx Xxxxxxxx Xxxxxx LLP
0000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
----------------------------------------------------------------------
North Carolina The Law Offices of Xxxxx & Associates
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
----------------------------------------------------------------------
South Dakota Xxxxxx Xxxxxx Xxxxx Solay & Xxxxxxx, LLP
0000 Xxxxx Xxxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxxx Xxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxxx XxXxxxx, Xxxxx, Battle & Xxxxxx
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
----------------------------------------------------------------------
24
Schedule 4.01(m)(vi)
Landlord Access Agreements
0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxx, XX 00000
0000 Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000
0000 Xxxxxx Xxxxx Xxxxx, Xxxxx, XX 00000
0000 Xxxxxxx Xxx, Xxxxx, XX 00000
25
Schedule 4.01(n)(iii)
Title Insurance Amounts
---------------------------------------------------------------------
Property Title Commitment
---------------------------------------------------------------------
Cottonwood, MN $ 3,507,500
---------------------------------------------------------------------
Liberty, NC $ 5,924,800
---------------------------------------------------------------------
Lynchburg, VA $ 4,745,015
---------------------------------------------------------------------
Newton, KS $10,955,728
---------------------------------------------------------------------
Sioux Falls, SD $ 900,820
---------------------------------------------------------------------
Colorado Springs, CO $ 1,321,350
---------------------------------------------------------------------
26
Schedule 6.01(b)
Existing Indebtedness
None.
27
Schedule 6.02(c)
Existing Liens
Each of the liens and other encumbrances excepted as being prior to the Lien of
the Mortgages as set forth in (a) Schedule B to the marked Pro Forma Policies
issued by Chicago Title Insurance Corporation dated as of the date hereof and
delivered to Collateral Agent, bearing Chicago Title Insurance Corporation
reference number (i) CTIC #LC 10-03-5579R, (ii) CTIC #PT2003-04247, (iii) CTIC
#2378-01064, (iv) CTIC #22501, (v) CTIC #7091T and (vi) CTIC #1376641 and (b) in
the opinion of Xxxxxxxx Xxxxx, as Canadian Counsel to the Collateral Agent,
delivered to the Collateral Agent on the date hereof, in each case relating to
the real property described in the Mortgages.
------------------------------------------------------------------------------------------------
Secured
Debtor Jurisdiction Filing Party Description
------ ------------ ------ ----- -----------
------------------------------------------------------------------------------------------------
NORCRAFT COMPANIES
------------------
------------------------------------------------------------------------------------------------
Norcraft Arizona, Maricopa Local judgment Hidden Lakes $4,111.97
Companies, Inc. County Homeowners
(co-defendant) Association
(Plaintiff)
------------------------------------------------------------------------------------------------
Norcraft Companies California, State tax lien State of $1,256.39
Alameda County California Board
See below of Equalization
------------------------------------------------------------------------------------------------
Norcraft Companies California, Pending Suit Xxxxxx Case
(Cross Defendant) Alameda Superior settled.
Court Formal lien
release in
process.
------------------------------------------------------------------------------------------------
Norcraft Delaware UCC-1 Case Credit Office
Companies, L.L.C. Secretary of State Corporation equipment
(operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Delaware UCC-1 Xxxxxxx Systems Pneumatic
Companies, L.L.C. Secretary of State Corp tools
and Norcraft (operating
Companies lease)
------------------------------------------------------------------------------------------------
Norcraft Delaware UCC-1 Xxxxxxx Systems Pneumatic
Companies, Inc. Secretary of State Corp tools
(operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Kansas Secretary UCC-1 Green Tree Certain
Companies, L.L.C. of State Vendor Services equipment
Group (operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Kansas Secretary UCC Assignment Xxxxx Fargo Certain
Companies, L.L.C. of State Financial equipment
Leasing Inc. (operating
lease)
[as assignee of
Green Tree
Vendor Services
Group]
------------------------------------------------------------------------------------------------
Norcraft Companies Kansas Secretary UCC-1 Xxxxxxxxx Certain
of State Associates. Inc. equipment
(operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Kansas Secretary UCC-1 Xxxxx Fargo Certain
Companies, L.L.C. of State Financial equipment
Leasing Inc. (operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Kansas, Xxxxxx Pending suit Xxxxx X. Case
Companies, L.L.C. District Court re: wrongful Xxxxxxxx dismissed.
(Defendant) termination (Plaintiff) Formal lien
release in
process.
------------------------------------------------------------------------------------------------
28
------------------------------------------------------------------------------------------------
Secured
Debtor Jurisdiction Filing Party Description
------ ------------ ------ ----- -----------
------------------------------------------------------------------------------------------------
Norcraft Companies Minnesota UCC-1 Herc-U-Lift, Inc. Forklift
Secretary of State (operating
lease)
------------------------------------------------------------------------------------------------
Norcraft South Dakota UCC-1 Cas Xxxxxxxx Certain
Companies, L.L.C. Secretary of State d/b/a Xxxxxxxx equipment
Implement (operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Minnesota UCC-1 Xxxxxxxxx Particle
Companies, L.L.C. Secretary of State Associates, Inc. board (supply
inventory)
------------------------------------------------------------------------------------------------
Norcraft Company Minnesota UCC-1 Herc-U-Lift, Inc. Forklift
Secretary of State (operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Company Minnesota UCC-1 Herc-U-Lift, Inc. Forklift
Secretary of State (operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Minnesota UCC-1 Associates Forklift
Companies, L.L.C. Secretary of State Leasing, Inc. (operating
lease)
------------------------------------------------------------------------------------------------
Norcraft Minnesota UCC-1 Citicorp North Forklift
Companies, L.L.C. Secretary of State America, Inc. (operating
lease)
------------------------------------------------------------------------------------------------
29
Schedule 6.04(b)
Existing Investments
See Schedule 3.09(a)
30
