EXHIBIT 10.1
CREDIT AGREEMENT
among
TOWN SPORTS INTERNATIONAL, INC.,
VARIOUS LENDERS
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as ADMINISTRATIVE AGENT
--------------------------------
Dated as of April 16, 2003
--------------------------------
DEUTSCHE BANK SECURITIES INC.
and
BNP PARIBAS,
as JOINT LEAD ARRANGERS and BOOK MANAGERS,
BNP PARIBAS,
as SYNDICATION AGENT,
and
CIT LENDING SERVICES CORPORATION
and
MERRILL LYNCH CAPITAL, a division of MERRILL LYNCH
BUSINESS FINANCIAL SERVICES INC.,
as CO-DOCUMENTATION AGENTS
TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit............................................................ 1
1.01 The Commitments....................................................................... 1
1.02 Minimum Amount of Each Borrowing...................................................... 3
1.03 Notice of Borrowing................................................................... 3
1.04 Disbursement of Funds................................................................. 4
1.05 Notes................................................................................. 4
1.06 Conversions........................................................................... 5
1.07 Pro Rata Borrowings................................................................... 6
1.08 Interest.............................................................................. 6
1.09 Interest Periods...................................................................... 7
1.10 Increased Costs, Illegality, etc...................................................... 8
1.11 Compensation.......................................................................... 10
1.12 Change of Lending Office.............................................................. 10
1.13 Replacement of Lenders................................................................ 10
SECTION 2. Letters of Credit..................................................................... 11
2.01 Letters of Credit..................................................................... 11
2.02 Maximum Letter of Credit Outstandings; Final Maturities............................... 12
2.03 Letter of Credit Requests; Minimum Stated Amount...................................... 13
2.04 Letter of Credit Participations....................................................... 13
2.05 Agreement to Repay Letter of Credit Drawings.......................................... 15
2.06 Increased Costs....................................................................... 16
SECTION 3. Commitment Commission; Fees; Reductions of Commitment................................. 17
3.01 Fees.................................................................................. 17
3.02 Voluntary Termination of Unutilized Revolving Loan Commitments........................ 18
3.03 Mandatory Reduction of Commitments.................................................... 18
SECTION 4. Prepayments; Payments; Taxes.......................................................... 20
4.01 Voluntary Prepayments................................................................. 20
4.02 Mandatory Repayments.................................................................. 21
4.03 Method and Place of Payment........................................................... 22
4.04 Net Payments.......................................................................... 22
SECTION 5. Conditions Precedent on the Effective Date............................................ 24
5.01 Effective Date; Notes................................................................. 25
5.02 Officer's Certificate................................................................. 25
5.03 Opinions of Counsel................................................................... 25
5.04 Corporate Documents; Proceedings; etc................................................. 25
(i)
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5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Non-Compete Agreements; Tax Sharing Agreements; and
Existing Indebtedness Agreements...................................................... 25
5.06 Senior Preferred Stock Repurchase..................................................... 26
5.07 Refinancing........................................................................... 27
5.08 Senior Notes.......................................................................... 27
5.09 Adverse Change, Approvals............................................................. 28
5.10 Litigation............................................................................ 28
5.11 Pledge Agreement...................................................................... 28
5.12 Security Agreement.................................................................... 28
5.13 Subsidiaries Guaranty................................................................. 29
5.14 Financial Statements; Pro Forma Financials; Projections............................... 29
5.15 Solvency Opinion; Insurance Certificates.............................................. 29
5.16 Fees, etc............................................................................. 30
SECTION 6. Conditions Precedent to All Credit Events............................................. 30
6.01 Effective Date........................................................................ 30
6.02 No Default; Representations and Warranties............................................ 30
6.03 Notice of Borrowing; Letter of Credit Request......................................... 30
6.04 No Excess Cash........................................................................ 31
SECTION 7. Representations, Warranties and Agreements............................................ 31
7.01 Organizational Status................................................................. 31
7.02 Power and Authority................................................................... 32
7.03 No Violation.......................................................................... 32
7.04 Approvals............................................................................. 32
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Borrower's Projections................................................................ 32
7.06 Litigation............................................................................ 34
7.07 True and Complete Disclosure.......................................................... 34
7.08 Use of Proceeds; Margin Regulations................................................... 34
7.09 Tax Returns and Payments.............................................................. 34
7.10 Compliance with ERISA................................................................. 35
7.11 The Security Documents................................................................ 36
7.12 Properties............................................................................ 37
7.13 Capitalization........................................................................ 37
7.14 Subsidiaries.......................................................................... 37
7.15 Compliance with Statutes, etc......................................................... 38
7.16 Investment Company Act................................................................ 38
7.17 Public Utility Holdings Company Act................................................... 38
7.18 Environmental Matters................................................................. 38
7.19 Labor Relations....................................................................... 39
7.20 Intellectual Property, etc............................................................ 39
7.21 Indebtedness.......................................................................... 39
7.22 Insurance............................................................................. 39
7.23 Representations and Warranties in Other Documents..................................... 39
(ii)
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7.24 Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; etc...................................... 40
SECTION 8. Affirmative Covenants................................................................. 40
8.01 Information Covenants................................................................. 40
(a) Monthly Reports................................................................... 40
(b) Quarterly Financial Statements.................................................... 40
(c) Annual Financial Statements....................................................... 41
(d) Management Letters................................................................ 41
(e) Budgets........................................................................... 41
(f) Officer's Certificates............................................................ 41
(g) Notice of Default, Litigation and Material Adverse Effect......................... 42
(h) Other Reports and Filings......................................................... 42
(i) Environmental Matters............................................................. 42
(j) Other Information................................................................. 43
8.02 Books, Records and Inspections; Annual Meetings....................................... 43
8.03 Maintenance of Property; Insurance.................................................... 44
8.04 Existence; Franchises................................................................. 44
8.05 Compliance with Statutes, etc......................................................... 44
8.06 Compliance with Environmental Laws.................................................... 45
8.07 ERISA................................................................................. 45
8.08 End of Fiscal Years; Fiscal Quarters.................................................. 47
8.09 Performance of Obligations............................................................ 47
8.10 Payment of Taxes...................................................................... 47
8.11 Use of Proceeds....................................................................... 47
8.12 Additional Security; Further Assurances; etc.......................................... 47
8.13 Foreign Subsidiaries Security......................................................... 48
8.14 Ownership of Subsidiaries; etc........................................................ 49
8.15 Maintenance of Corporate Separateness................................................. 49
8.16 Permitted Acquisitions................................................................ 49
8.17 Cash on Hand at the Captive Insurance Company and the License Subsidiary.............. 51
8.18 Existing Senior Notes Redemption...................................................... 51
SECTION 9. Negative Covenants.................................................................... 51
9.01 Liens................................................................................. 51
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc................................ 54
9.03 Dividends............................................................................. 56
9.04 Indebtedness.......................................................................... 57
9.05 Advances, Investments and Loans....................................................... 58
9.06 Transactions with Affiliates.......................................................... 60
9.07 Capital Expenditures.................................................................. 61
9.08 Consolidated Interest Coverage Ratio.................................................. 63
9.09 Maximum Total Leverage Ratio.......................................................... 64
9.10 Maximum Senior Secured Leverage Ratio................................................. 64
(iii)
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9.11 Limitations on Payments of Senior Notes; Modifications of Senior Note
Documents, Certificate of Incorporation, By-Laws and Certain Other
Agreements, etc....................................................................... 64
9.12 Limitation on Certain Restrictions on Subsidiaries.................................... 65
9.13 Limitation on Issuance of Capital Stock............................................... 66
9.14 Business, etc......................................................................... 66
9.15 Limitation on Creation of Subsidiaries, etc........................................... 67
9.16 Change of Legal Names; Type of Organization (and Whether a
Registered Organization); Jurisdiction of Organization etc............................ 67
9.17 Certain Deposit Accounts.............................................................. 68
SECTION 10. Events of Default..................................................................... 68
10.01 Payments.............................................................................. 68
10.02 Representations, etc.................................................................. 68
10.03 Covenants............................................................................. 68
10.04 Default Under Other Agreements........................................................ 68
10.05 Bankruptcy, etc....................................................................... 69
10.06 ERISA................................................................................. 69
10.07 Security Documents.................................................................... 70
10.08 Subsidiaries Guaranty................................................................. 70
10.09 Judgments............................................................................. 70
10.10 Change of Control..................................................................... 70
SECTION 11. Definitions and Accounting Terms...................................................... 71
11.01 Defined Terms......................................................................... 71
SECTION 12. The Administrative Agent.............................................................. 94
12.01 Appointment........................................................................... 94
12.02 Nature of Duties...................................................................... 94
12.03 Lack of Reliance on the Administrative Agent.......................................... 94
12.04 Certain Rights of the Administrative Agent............................................ 95
12.05 Reliance.............................................................................. 95
12.06 Indemnification....................................................................... 95
12.07 The Administrative Agent in its Individual Capacity................................... 95
12.08 Holders............................................................................... 96
12.09 Resignation by the Administrative Agent............................................... 96
12.10 Syndication Agent and Documentation Agents............................................ 97
SECTION 13. Miscellaneous......................................................................... 97
13.01 Payment of Expenses, etc.............................................................. 97
13.02 Right of Setoff....................................................................... 98
13.03 Notices............................................................................... 99
13.04 Benefit of Agreement; Assignments; Participations..................................... 99
13.05 No Waiver; Remedies Cumulative........................................................ 101
13.06 Payments Pro Rata..................................................................... 101
(iv)
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13.07 Calculations; Computations........................................................... 102
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL............... 102
13.09 Counterparts......................................................................... 103
13.10 Effectiveness........................................................................ 104
13.11 Headings Descriptive................................................................. 104
13.12 Amendment or Waiver; etc............................................................. 104
13.13 Survival............................................................................. 105
13.14 Domicile of Loans.................................................................... 105
13.15 Register............................................................................. 106
13.16 Confidentiality...................................................................... 106
13.17 Existing Senior Notes................................................................ 108
13.18 Town Sports AG Stock Certificates.................................................... 108
SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Existing Letters of Credit
SCHEDULE IV Real Property
SCHEDULE V Plans
SCHEDULE VI Subsidiaries
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Legal Names, Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; etc.
SCHEDULE X Existing Liens
SCHEDULE XI Existing Investments
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Conversion/Continuation
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of Kirkland & Ellis
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Security Agreement
EXHIBIT I Subsidiaries Guaranty
EXHIBIT J Compliance Certificate
EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L Joinder Agreement
EXHIBIT M Subordination Provisions
(v)
CREDIT AGREEMENT, dated as of April 16, 2003, among TOWN
SPORTS INTERNATIONAL, INC., a New York corporation (the "Borrower"), the Lenders
party hereto from time to time, and DEUTSCHE BANK TRUST COMPANY AMERICAS, as
administrative agent (in such capacity, the "Administrative Agent"). All
capitalized terms used herein and defined in Section 11 are used herein as
therein defined.
W I T N E S S E T H:
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Lenders are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms
and conditions set forth herein, each Lender severally agrees to make, at any
time and from time to time on or after the Effective Date and prior to the
Revolving Loan Maturity Date, a revolving loan or revolving loans (each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall be denominated in Dollars, (ii) shall, at the
option of the Borrower, be incurred and maintained as, and/or converted into,
Base Rate Loans or Eurodollar Loans, provided that, except as otherwise
specifically provided in Section 1.10(b), all Revolving Loans comprising the
same Borrowing shall at all times be of the same Type, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, and (iv) shall not exceed
for any Lender at any time outstanding that aggregate principal amount which,
when added to the product of (x) such Lender's Percentage and (y) the sum of (I)
the aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such time and
(II) the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Revolving Loan Commitment of such Lender at such time.
(b) Subject to and upon the terms and conditions set
forth herein, the Swingline Lender agrees to make, at any time and from time to
time on or after the Effective Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each a "Swingline Loan" and, collectively,
the "Swingline Loans") to the Borrower, which Swingline Loans (i) shall be
incurred and maintained as Base Rate Loans, (ii) shall be denominated in
Dollars, (iii) may be repaid and reborrowed in accordance with the provisions
hereof, (iv) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the aggregate principal amount of all Revolving
Loans then outstanding and the aggregate amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Swingline Loans) at such time, an amount equal to the Total Revolving Loan
Commitment at such time, and (v) shall not exceed in aggregate principal amount
at any time outstanding the Maximum
Swingline Amount. Notwithstanding anything to the contrary contained in this
Section 1.01(b), (i) the Swingline Lender shall not be obligated to make any
Swingline Loans at a time when a Lender Default exists unless the Swingline
Lender has entered into arrangements satisfactory to it and the Borrower to
eliminate the Swingline Lender's risk with respect to the Defaulting Lender's or
Defaulting Lenders' participation in such Swingline Loans, including by cash
collateralizing such Defaulting Lender's or Defaulting Lenders' Percentage of
the outstanding Swingline Loans, and (ii) the Swingline Lender shall not make
any Swingline Loan after it has received written notice from the Borrower, any
other Credit Party or the Required Lenders stating that a Default or an Event of
Default exists and is continuing until such time as the Swingline Lender shall
have received written notice (A) of rescission of all such notices from the
party or parties originally delivering such notice or notices or (B) of the
waiver of such Default or Event of Default by the Required Lenders.
(c) On any Business Day, the Swingline Lender may, in its
sole discretion, give notice to the Lenders that the Swingline Lender's
outstanding Swingline Loans shall be funded with one or more Borrowings of
Revolving Loans (provided that such notice shall be deemed to have been
automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case one or more Borrowings of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Lenders pro rata based on each such Lender's Percentage (determined before
giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 10) and the proceeds thereof shall be applied
directly by the Swingline Lender to repay the Swingline Lender for such
outstanding Swingline Loans. Each Lender hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by the Swingline Lender notwithstanding (i)
the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing
Amount otherwise required hereunder, (ii) whether any conditions specified in
Section 6 are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) the date of such Mandatory Borrowing, and (v) the amount of
the Total Revolving Loan Commitment at such time. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower), then each
Lender hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause the Lenders to share in such Swingline Loans
ratably based upon their respective Percentages (determined before giving effect
to any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10), provided that (x) all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until the date
as of which the respective participation is required to be purchased and, to the
extent attributable to the purchased participation, shall be payable to the
participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay the Swingline Lender interest on the principal amount
of participation purchased for each day from and including the day upon which
the Mandatory Borrowing would otherwise have
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occurred to but excluding the date of payment for such participation, at the
overnight Federal Funds Rate for the first three days and at the interest rate
otherwise applicable to Revolving Loans maintained as Base Rate Loans hereunder
for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing of Revolving Loans or Swingline Loans shall
not be less than the Minimum Borrowing Amount applicable to such Loans. More
than one Borrowing may occur on the same date, but at no time shall there be
outstanding more than ten Borrowings of Eurodollar Loans in the aggregate.
1.03 Notice of Borrowing. (a) Whenever the Borrower
desires to incur (x) Eurodollar Loans hereunder, it shall give the
Administrative Agent at the Notice Office at least three Business Days' prior
notice of each Eurodollar Loan to be incurred hereunder and (y) Base Rate Loans
hereunder (excluding Swingline Loans and Revolving Loans made pursuant to a
Mandatory Borrowing), it shall give the Administrative Agent at the Notice
Office at least one Business Day's prior notice of each Base Rate Loan to be
incurred hereunder, provided that (in each case) any such notice shall be deemed
to have been given on a certain day only if given before 11:00 A.M. (New York
time) on such day. Each such notice (each a "Notice of Borrowing"), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and shall be
in writing, or by telephone promptly confirmed in writing, in the form of
Exhibit A-1, appropriately completed to specify: (i) the aggregate principal
amount of the Revolving Loans to be incurred pursuant to such Borrowing, (ii)
the date of such Borrowing (which shall be a Business Day) and (iii) whether the
Revolving Loans being incurred pursuant to such Borrowing are to be initially
maintained as Base Rate Loans or, to the extent permitted hereunder, Eurodollar
Loans and, if Eurodollar Loans, the initial Interest Period to be applicable
thereto. The Administrative Agent shall promptly give each Lender written notice
of the proposed Borrowing, of such Lender's proportionate share thereof and of
the other matters required by the immediately preceding sentence to be specified
in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline
Loans hereunder, the Borrower shall give the Swingline Lender no later than 1:00
P.M. (New York time) on the date that a Swingline Loan is to be incurred,
written notice or telephonic notice promptly confirmed in writing of each
Swingline Loan to be incurred hereunder. Each such notice shall be irrevocable
and specify in each case (A) the date of Borrowing (which shall be a Business
Day) and (B) the aggregate principal amount of the Swingline Loans to be
incurred pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(c), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as
set forth in Section 1.01(c).
(c) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice of any Borrowing or
prepayment of Loans, the Administrative Agent or the Swingline Lender, as the
case may be, may act without liability upon the basis of telephonic notice of
such Borrowing or prepayment, as the case may be, believed by the Administrative
Agent or the Swingline Lender, as the case may be, in good faith to be from the
president, the chief executive officer, the chief financial officer, the vice
president-finance, the
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treasurer or any assistant treasurer of the Borrower, or from any other
authorized officer of the Borrower designated in writing by the Borrower to the
Administrative Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Administrative Agent's or Swingline Lender's record of the terms
of such telephonic notice of such Borrowing or prepayment of Loans, as the case
may be, absent manifest error.
1.04 Disbursement of Funds. No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing (or (x) in the case
of Swingline Loans, no later than 3:00 P.M. (New York time) on the date
specified pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, no later than 1:00 P.M. (New York time) on the date specified in
Section 1.01(c)), each Lender will make available its pro rata portion
(determined in accordance with Section 1.07) of each such Borrowing requested to
be made on such date (or in the case of Swingline Loans, the Swingline Lender
will make available the full amount thereof). All such amounts will be made
available in Dollars and in immediately available funds at the Payment Office,
and the Administrative Agent will, except in the case of Revolving Loans made
pursuant to a Mandatory Borrowing, make available to the Borrower at the Payment
Office the aggregate of the amounts so made available by the Lenders. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may (but shall not be obligated to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover on demand from
such Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Lender, the overnight Federal Funds
Rate for the first three days and at the interest rate otherwise applicable to
such Loans for each day thereafter and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined pursuant
to Section 1.08. Nothing in this Section 1.04 shall be deemed to relieve any
Lender from its obligation to make Loans hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any failure by
such Lender to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made by each Lender shall be evidenced
in the Register maintained by the Administrative Agent pursuant to Section 13.15
and shall, if requested by such Lender, also be evidenced (i) in the case of
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-1, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes"), and (ii) in the case of Swingline Loans, by a promissory
note duly executed and delivered by the
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Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Lender shall (i) be
executed by the Borrower, (ii) be payable to such Lender or its registered
assigns and be dated the Effective Date (or, if issued to an Eligible Transferee
after the Effective Date, be dated the date of the issuance thereof), (iii) be
in a stated principal amount equal to the Revolving Loan Commitment of such
Lender (or, if issued after the termination thereof, be in a stated principal
amount equal to the outstanding Revolving Loans of such Lender at such time) and
be payable in the outstanding principal amount of the Revolving Loans evidenced
thereby, (iv) mature on the Revolving Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 4.01, and mandatory
repayment as provided in Section 4.02, and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(c) The Swingline Note issued to the Swingline Lender
shall (i) be executed by the Borrower, (ii) be payable to the Swingline Lender
or its registered assigns and be dated the Effective Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from time
to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) Each Lender will note on its internal records the
amount of each Loan made by it and each payment in respect thereof and prior to
any transfer of any of its Notes will endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation or any error in such notation shall not affect the Borrower's
obligations in respect of such Loans.
(e) Notwithstanding anything to the contrary contained
above in this Section 1.05 or elsewhere in this Agreement, Notes shall only be
delivered to Lenders which at any time specifically request the delivery of such
Notes. No failure of any Lender to request or obtain a Note evidencing its Loans
to the Borrower shall affect or in any manner impair the obligations of the
Borrower to pay the Loans (and all related Obligations) incurred by the Borrower
which would otherwise be evidenced thereby in accordance with the requirements
of this Agreement, and shall not in any way affect the security or guaranties
therefor provided pursuant to the various Credit Documents. Any Lender which
does not have a Note evidencing its outstanding Loans shall in no event be
required to make the notations otherwise described in preceding clause (d). At
any time when any Lender requests the delivery of a Note to evidence any of its
Loans, the Borrower shall (at its expense) promptly execute and deliver to the
respective Lender the requested Note in the appropriate amount or amounts to
evidence such Loans.
1.06 Conversions. The Borrower shall have the option to
convert, on any Business Day, all or a portion equal to at least the Minimum
Borrowing Amount of the outstand-
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ing principal amount of Revolving Loans made pursuant to one or more Borrowings
of one or more Types of Revolving Loans into a Borrowing of another Type of
Revolving Loan, provided that (i) except as otherwise provided in Section
1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last
day of an Interest Period applicable to the Revolving Loans being converted and
no such partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single Borrowing to
less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans
may not be converted into Eurodollar Loans if (x) any Event of Default under
Section 10.05 is in existence on the proposed date of conversion or (y) any
other Event of Default or any Specified Default is in existence on the proposed
date of the conversion and (in the case of this sub-clause (y) only) the
Required Lenders determine (in their sole discretion) that such conversion would
be disadvantageous to the Lenders at such time, and (iii) no conversion pursuant
to this Section 1.06 shall result in a greater number of Borrowings of
Eurodollar Loans than is permitted under Section 1.02. Each such conversion
shall be effected by the Borrower by giving the Administrative Agent at the
Notice Office prior to 11:00 A.M. (New York time) (x) at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
in the case of a conversion into Eurodollar Loans and (y) at least one Business
Day's prior written notice (or telephonic notice promptly confirmed in writing)
in the case of a conversion into Base Rate Loans (in each case, a "Notice of
Conversion/Continuation") in the form of Exhibit A-2, appropriately completed to
specify the Revolving Loans to be so converted, the Borrowing or Borrowings
pursuant to which such Revolving Loans were incurred and, if to be converted
into Eurodollar Loans, the Interest Period to be initially applicable thereto.
The Administrative Agent shall give each Lender prompt notice of any such
proposed conversion affecting any of its Revolving Loans. Swingline Loans may
not be converted pursuant to this Section 1.06.
1.07 Pro Rata Borrowings. All Borrowings of Revolving
Loans under this Agreement shall be incurred from the Lenders pro rata on the
basis of their Revolving Loan Commitments, provided that all Mandatory
Borrowings shall be incurred from the Lenders pro rata on the basis of their
Percentages. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make Revolving Loans hereunder
and that each Lender shall be obligated to make the Revolving Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to make
its Revolving Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date of
Borrowing thereof until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) and (ii) the conversion of such Base Rate Loan to a
Eurodollar Loan pursuant to Section 1.06 or 1.09, as applicable, at a rate per
annum which shall be equal to the sum of the Applicable Margin plus the Base
Rate as in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate
Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Applicable Margin plus the Eurodollar Rate for such Interest Period.
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(c) Overdue principal and, to the extent permitted by
law, overdue interest in respect of each Loan shall, in each case, bear interest
at a rate per annum equal to the greater of (x) the rate which is 2% in excess
of the rate then borne by such Loans and (y) the rate which is 2% in excess of
the rate otherwise applicable to Base Rate Loans from time to time, and all
other overdue amounts payable hereunder and under any other Credit Document
shall bear interest at a rate per annum equal to the rate which is 2% in excess
of the rate applicable to Revolving Loans that are maintained as Base Rate Loans
from time to time. Interest that accrues under this Section 1.08(c) shall be
payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, (x) quarterly in arrears on each
Quarterly Payment Date, (y) on the date of any repayment or prepayment in full
of all outstanding Base Rate Loans of any Tranche, and (z) at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand, and (ii) in
respect of each Eurodollar Loan, (x) on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period, (y) on the date of any repayment or prepayment (on the
amount repaid or prepaid), and (z) at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the
Administrative Agent shall determine the Eurodollar Rate for each Interest
Period applicable to the respective Eurodollar Loans and shall promptly notify
the Borrower and the Lenders thereof. Each such determination shall, absent
manifest error, be final and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any
Notice of Borrowing or Notice of Conversion/Continuation in respect of the
making of, or conversion into, any Eurodollar Loan (in the case of the initial
Interest Period applicable thereto) or prior to 11:00 A.M. (New York time) on
the third Business Day prior to the expiration of an Interest Period applicable
to such Eurodollar Loan (in the case of any subsequent Interest Period), the
Borrower shall have the right to elect the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six month period, provided that
(in each case):
(i) all Eurodollar Loans comprising a Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Base Rate Loan)
and each Interest Period occurring thereafter in respect of such
Eurodollar Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
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(iv) if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day; provided,
however, that if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time if (x)
an Event of Default under Section 10.05 is then in existence or (y) any
other Event of Default or any Specified Default is then in existence
and (in the case of this sub-clause (y) only) the Required Lenders
determine (in their sole discretion) that such conversion would be
disadvantageous to the Lenders at such time; and
(vi) no Interest Period in respect of any Borrowing of
Eurodollar Loans shall be selected which extends beyond the Revolving
Loan Maturity Date.
If by 11:00 A.M. (New York time) on the third Business Day prior to the
expiration of any Interest Period applicable to a Borrowing of Eurodollar Loans,
the Borrower has failed to elect, or is not permitted to elect, a new Interest
Period to be applicable to such Eurodollar Loans as provided above, the Borrower
shall be deemed to have elected to convert such Eurodollar Loans into Base Rate
Loans effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event
that any Lender shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but,
with respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loan because of (x) any change since the
Effective Date in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, but not limited to: (A) a change in the
basis of taxation of payment to any Lender of the principal of or
interest on the Loans or the Notes or any other amounts payable
hereunder (except for changes in the rate of tax on, or determined by
reference to, the net income or net profits of such Lender pursuant to
the laws of the jurisdiction in which it is organized or in which its
principal office or applicable lending office is located or any
subdivision thereof or therein) or (B) a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the
Eurodollar Rate and/or (y) other circumstances arising since the
Effective Date
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affecting such Lender, the interbank Eurodollar market or the position
of such Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Lender
in good faith with any governmental request (whether or not having
force of law) or (z) impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion/Continuation given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower agrees to pay to such Lender, upon such Lender's written request
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as shall be required to compensate such Lender
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing in reasonable detail the basis for the calculation thereof, submitted to
the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding on all the parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Eurodollar Loan is affected by
the circumstances described in Section 1.10(a)(ii), the Borrower may, and in the
case of a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii), the Borrower shall, either (x) if the affected Eurodollar Loan is
then being made initially or pursuant to a conversion, cancel such Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Lender or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Lender to
convert such Eurodollar Loan into a Base Rate Loan, provided that if more than
one Lender is affected at any time, then all affected Lenders must be treated
the same pursuant to this Section 1.10(b).
(c) If any Lender determines that after the Effective
Date the introduction or effectiveness of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by the NAIC or any governmental
authority, central bank or comparable agency, will have the effect of increasing
the
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amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender based on the existence of such Lender's
Revolving Loan Commitment hereunder or its Loans or obligations hereunder, then
the Borrower agrees to pay to such Lender, upon its written demand therefor,
such additional amounts as shall be required to compensate such Lender or such
other corporation for the increased cost to such Lender or such other
corporation or the reduction in the rate of return to such Lender or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Lender will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Lender's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Lender, upon determining that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall show in reasonable detail the basis
for calculation of such additional amounts.
1.11 Compensation. The Borrower agrees to compensate each
Lender, upon its written request (which request shall set forth in reasonable
detail the basis for requesting such compensation), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Lender to fund its Eurodollar Loans but excluding
loss of anticipated profits) which such Lender may sustain: (i) if for any
reason (other than a default by such Lender or the Administrative Agent) a
Borrowing of, or conversion from or into, Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment or repayment
(including any prepayment or repayment made pursuant to Section 4.01, Section
4.02 or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans, or assignment of any of its
Eurodollar Loans pursuant to Section 1.13, occurs on a date which is not the
last day of an Interest Period with respect thereto; (iii) if any prepayment of
any of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay Eurodollar Loans when required by the terms of
this Agreement or any Note held by such Lender or (y) any election made pursuant
to Section 1.10(b).
1.12 Change of Lending Office. Each Lender agrees that
upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans or Letters of Credit affected by such event,
provided that such designation is made on such terms that such Lender and its
lending office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
such Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Sections
1.10, 2.06 and 4.04.
1.13 Replacement of Lenders. (x) If any Lender becomes a
Defaulting Lender or otherwise defaults in its obligations to make Revolving
Loans, (y) upon the occurrence of an event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or
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Section 4.04 with respect to any Lender which results in such Lender charging to
the Borrower increased costs in excess of those being generally charged by the
other Lenders or (z) in the case of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 13.12(b), the Borrower shall have the right, if no
Default or Event of Default then exists (or, in the case of preceding clause
(z), will exist immediately after giving effect to such replacement), to replace
such Lender (the "Replaced Lender") with one or more other Eligible Transferees,
none of whom shall constitute a Defaulting Lender at the time of such
replacement (collectively, the "Replacement Lender") and each of whom shall be
required to be reasonably acceptable to the Administrative Agent, provided that
(i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire the entire Revolving Loan Commitment and
outstanding Revolving Loans of, and in each case participations in Letters of
Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the Replaced Lender in respect thereof an amount equal to the sum of (I) an
amount equal to the principal of, and all accrued and unpaid interest on, all
outstanding Revolving Loans of the Replaced Lender, (II) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced
Lender, together with all then accrued and unpaid interest with respect thereto
at such time, and (III) an amount equal to all accrued, but theretofore unpaid,
Fees owing to the Replaced Lender pursuant to Section 3.01, (y) each Issuing
Lender an amount equal to such Replaced Lender's Percentage of any Unpaid
Drawing (which at such time remains an Unpaid Drawing) to the extent such amount
was not theretofore funded by such Replaced Lender to such Issuing Lender,
together with all then accrued and unpaid interest with respect thereto at such
time, and (z) the Swingline Lender an amount equal to such Replaced Lender's
Percentage of any Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Lender to the Swingline Lender, together
with all then accrued and unpaid interest thereon at such time and (ii) all
obligations of the Borrower due and owing to the Replaced Lender at such time
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the respective Assignment and Assumption Agreement, the payment
of amounts referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate
Revolving Note executed by the Borrower, the Replacement Lender shall become a
Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06
and 13.01), which shall survive as to such Replaced Lender.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms
and conditions set forth herein, the Borrower may request that an Issuing Lender
issue, at any time and from time to time on and after the Effective Date and
prior to the 60th day prior to the Revolving Loan Maturity Date, for the account
of the Borrower and for the benefit of (x) any holder (or any trustee, agent or
other similar representative for any such holders) of L/C Supportable
Obligations, an irrevocable standby letter of credit, in a form customarily used
by such Issuing
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Lender or in such other form as is reasonably acceptable to such Issuing Lender,
and (y) sellers of goods to the Borrower or any of its Subsidiaries, an
irrevocable trade letter of credit, in a form customarily used by such Issuing
Lender or in such other form as has been approved by such Issuing Lender (each
such letter of credit, a "Letter of Credit" and, collectively, the "Letters of
Credit"). All Letters of Credit shall be denominated in Dollars and shall be
issued on a sight basis only.
(b) Subject to and upon the terms and conditions set
forth herein, each Issuing Lender agrees that it will, at any time and from time
to time on and after the Effective Date and prior to the 60th day prior to the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for account of the Borrower, one or more Letters of Credit
as are permitted to remain outstanding hereunder without giving rise to a
Default or an Event of Default, provided that no Issuing Lender shall be under
any obligation to issue any Letter of Credit of the types described above if at
the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuing Lender from issuing such Letter of Credit or any
requirement of law applicable to such Issuing Lender or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over such Issuing Lender shall
prohibit, or request that such Issuing Lender refrain from, the
issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Lender with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which such Issuing Lender is not otherwise compensated hereunder)
not in effect with respect to such Issuing Lender on the date hereof,
or any unreimbursed loss, cost or expense which was not applicable or
in effect with respect to such Issuing Lender as of the date hereof and
which such Issuing Lender reasonably and in good faith deems material
to it; or
(ii) such Issuing Lender shall have received from the
Borrower, any other Credit Party or the Required Lenders prior to the
issuance of such Letter of Credit notice of the type described in the
second sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final
Maturities. (a) Notwithstanding anything to the contrary contained in this
Agreement, (i) no Letter of Credit shall be issued the Stated Amount of which,
when added to the Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid on the date of, and prior to the issuance of, the respective
Letter of Credit) at such time would exceed either (x) $15,000,000 or (y) when
added to the sum of (I) the aggregate principal amount of all Revolving Loans
then outstanding and (II) the aggregate principal amount of all Swingline Loans
then outstanding, an amount equal to the Total Revolving Loan Commitment at such
time, and (ii) each Letter of Credit shall by its terms terminate (x) in the
case of standby Letters of Credit, on or before the earlier of (A) the date
which occurs 12 months after the date of the issuance thereof (although any such
standby Letter of Credit shall be extendible for successive periods of up to 12
months, but, in each case, not beyond the fifth Business Day prior to the
Revolving Loan Maturity Date, on terms acceptable to the respective Issuing
Lender) and (B) five Business Days prior to the Revolving Loan Maturity Date,
and (y) in the case of trade Letters of Credit, on or before the earlier of (A)
the date which
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occurs 180 days after the date of issuance thereof and (B) 30 days prior to the
Revolving Loan Maturity Date.
(b) Schedule III contains a description of all letters of
credit issued by each Issuing Lender pursuant to the Existing Credit Agreement
and which are to remain outstanding on the Effective Date and sets forth, with
respect to each such letter of credit, (i) the name of the issuing lender, (ii)
the letter of credit number, (iii) the stated amount, (iv) the name of the
beneficiary and (v) the expiry date. Each such letter of credit, including any
extension thereof, shall constitute a "Letter of Credit" under, as defined in,
and for all purposes of, this Agreement and shall be deemed issued on the
Effective Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a)
Whenever the Borrower desires that a Letter of Credit be issued for its account,
the Borrower shall give the Administrative Agent and the respective Issuing
Lender at least five Business Days' (or such shorter period as is acceptable to
such Issuing Lender) written notice thereof (including by way of facsimile).
Each notice shall be in the form of Exhibit C, appropriately completed (each a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower to the Lenders that
such Letter of Credit may be issued in accordance with, and will not violate the
requirements of, Section 2.02. Unless the respective Issuing Lender has received
notice from the Borrower, any other Credit Party or the Required Lenders before
it issues a Letter of Credit that one or more of the conditions specified in
Section 5 or 6 are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 2.02, then such Issuing Lender shall, subject to
the terms and conditions of this Agreement, issue the requested Letter of Credit
for the account of the Borrower in accordance with such Issuing Lender's usual
and customary practices. Upon the issuance of or modification or amendment to
any standby Letter of Credit, each Issuing Lender shall promptly notify the
Borrower and the Administrative Agent, in writing of such issuance, modification
or amendment and such notice shall be accompanied by a copy of such Letter of
Credit or the respective modification or amendment thereto, as the case may be.
Promptly after receipt of such notice the Administrative Agent shall notify the
Participants, in writing, of such issuance, modification or amendment. On the
first Business Day of each week, each Issuing Lender shall furnish the
Administrative Agent with a written (including via facsimile) report of the
daily aggregate outstandings of trade Letters of Credit issued by such Issuing
Lender for the immediately preceding week. Notwithstanding anything to the
contrary contained in this Agreement, in the event that a Lender Default exists,
no Issuing Lender shall be required to issue any Letter of Credit unless such
Issuing Lender has entered into arrangements satisfactory to it and the Borrower
to eliminate such Issuing Lender's risk with respect to the participation in
Letters of Credit by the Defaulting Lender or Lenders, including by cash
collateralizing such Defaulting Lender's or Lenders' Percentage of the Letter of
Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit
shall not be less than $20,000 or such lesser amount as is acceptable to the
respective Issuing Lender.
2.04 Letter of Credit Participations. (a) Immediately upon
the issuance by an Issuing Lender of any Letter of Credit, such Issuing Lender
shall be deemed to have sold and
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transferred to each Lender, and each such Lender (in its capacity under this
Section 2.04, a "Participant") shall be deemed irrevocably and unconditionally
to have purchased and received from such Issuing Lender, without recourse or
warranty, an undivided interest and participation, to the extent of such
Participant's Percentage, in such Letter of Credit, each drawing or payment made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto, and any security therefor or guaranty pertaining thereto. Upon any
change in the Revolving Loan Commitments or Percentages of the Lenders pursuant
to Section 1.13 or 13.04(b), it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings relating thereto, there shall
be an automatic adjustment to the participations pursuant to this Section 2.04
to reflect the new Percentages of the assignor and assignee Lender, as the case
may be.
(b) In determining whether to pay under any Letter of
Credit, no Issuing Lender shall have any obligation relative to the other
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by an Issuing Lender under or in
connection with any Letter of Credit issued by it shall not create for such
Issuing Lender any resulting liability to the Borrower, any other Credit Party,
any Lender or any other Person unless such action is taken or omitted to be
taken with gross negligence or willful misconduct on the part of such Issuing
Lender (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
(c) In the event that any Issuing Lender makes any
payment under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Issuing Lender pursuant to Section
2.05(a), such Issuing Lender shall promptly notify the Administrative Agent,
which shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to such Issuing Lender the
amount of such Participant's Percentage of such unreimbursed payment in Dollars
and in same day funds. If the Administrative Agent so notifies, on or prior to
1:00 P.M. (New York time) on any Business Day, any Participant required to fund
a payment under a Letter of Credit, such Participant shall make available to the
respective Issuing Lender in Dollars such Participant's Percentage of the amount
of such payment on such Business Day in same day funds. If and to the extent
such Participant shall not have so made its Percentage of the amount of such
payment available to the respective Issuing Lender, such Participant agrees to
pay to such Issuing Lender, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to such Issuing Lender at the overnight Federal Funds Rate for the first three
days and at the interest rate applicable to Revolving Loans that are maintained
as Base Rate Loans for each day thereafter. The failure of any Participant to
make available to an Issuing Lender its Percentage of any payment under any
Letter of Credit issued by such Issuing Lender shall not relieve any other
Participant of its obligation hereunder to make available to such Issuing Lender
its Percentage of any payment under any Letter of Credit on the date required,
as specified above, but no Participant shall be responsible for the failure of
any other Participant to make available to such Issuing Lender such other
Participant's Percentage of any such payment.
(d) Whenever an Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c)
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above, such Issuing Lender shall pay to each such Participant which has paid its
Percentage thereof, in Dollars and in same day funds, an amount equal to such
Participant's share (based upon the proportionate aggregate amount originally
funded by such Participant to the aggregate amount funded by all Participants)
of the principal amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, each Issuing
Lender shall furnish to such Participant copies of any standby Letter of Credit
issued by it and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments
to each Issuing Lender with respect to Letters of Credit shall be irrevocable
and not subject to any qualification or exception whatsoever (except in the case
of an Issuing Lender's gross negligence or willful misconduct (as determined by
a court of competent jurisdiction in a final and non-appealable decision)) and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee may
be acting), the Administrative Agent, any Participant, or any other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
or any Subsidiary of the Borrower and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or any other document
presented under any 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower agrees to reimburse each Issuing Lender, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Issuing Lender under any Letter of
Credit issued by it (each such amount, so paid until reimbursed, an "Unpaid
Drawing"), not later than one Business Day following receipt by the Borrower of
notice of such payment or disbursement (provided that no such notice shall be
required to be given if a Default or an Event of Default under Section 10.05
shall have occurred and be continuing, in which case the Unpaid Drawing shall be
due and payable immediately without presentment, demand, protest or notice of
any kind (all of which are hereby waived by the Borrower)), with interest on the
amount so paid or disbursed by such Issuing Lender, to the
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extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
excluding the date such Issuing Lender was reimbursed by the Borrower therefor
at a rate per annum equal to the Base Rate in effect from time to time plus the
Applicable Margin as in effect from time to time for Revolving Loans that are
maintained as Base Rate Loans; provided, however, to the extent such amounts are
not reimbursed prior to 1:00 P.M. (New York time) on the third Business Day
following the receipt by the Borrower of notice of such payment or disbursement
or following the occurrence of a Default or an Event of Default under Section
10.05, interest shall thereafter accrue on the amounts so paid or disbursed by
such Issuing Lender (and until reimbursed by the Borrower) at a rate per annum
equal to the Base Rate in effect from time to time plus the Applicable Margin
for Revolving Loans that are maintained as Base Rate Loans plus 2%, with such
interest to be payable on demand. Each Issuing Lender shall give the Borrower
prompt written notice of each Drawing under any Letter of Credit issued by it,
provided that the failure to give any such notice shall in no way affect, impair
or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section
2.05 to reimburse each Issuing Lender with respect to drafts, demands and other
presentations for payment under Letters of Credit issued by it (each a
"Drawing") (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower or any Subsidiary of the
Borrower may have or have had against any Lender (including in its capacity as
an Issuing Lender or as a Participant), including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any nonapplication or
misapplication by the beneficiary of the proceeds of such Drawing; provided,
however, that the Borrower shall not be obligated to reimburse any Issuing
Lender for any wrongful payment made by such Issuing Lender under a Letter of
Credit issued by it as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Issuing Lender (as determined
by a court of competent jurisdiction in a final and non-appealable decision).
2.06 Increased Costs. If at any time after the Effective
Date, the introduction or effectiveness of or any change in any applicable law,
rule, regulation, order, guideline or request or in the interpretation or
administration thereof by the NAIC or any governmental authority charged with
the interpretation or administration thereof, or compliance by any Issuing
Lender or any Participant with any request or directive by the NAIC or by any
such governmental authority (whether or not having the force of law), shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by any Issuing
Lender or participated in by any Participant, or (ii) impose on any Issuing
Lender or any Participant any other conditions relating, directly or indirectly,
to this Agreement or any Letter of Credit; and the result of any of the or any
Participant of issuing, maintaining or participating in any Letter of Credit, or
reduce the amount of any sum received or receivable by any Issuing Lender or any
Participant hereunder or reduce the rate of return on its capital with respect
to Letters of Credit (except for changes in the rate of tax on, or determined by
reference to, the net income or net profits of such Issuing Lender or such
Participant pursuant to the laws of the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located or any
subdivision thereof or therein), then, upon the delivery of the certificate
referred to below to the Borrower by any Issuing Lender foregoing is to increase
the cost to any Issuing Lender
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or any Participant (a copy of which certificate shall be sent by such Issuing
Lender or such Participant to the Administrative Agent), the Borrower agrees to
pay to such Issuing Lender or such Participant such additional amount or amounts
as will compensate such Issuing Lender or such Participant for such increased
cost or reduction in the amount receivable or reduction on the rate of return on
its capital. Any Issuing Lender or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.06, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by such Issuing Lender or such Participant
(a copy of which certificate shall be sent by the Issuing Lender or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the calculation of such additional amount or amounts necessary to
compensate such Issuing Lender or such Participant. The certificate required to
be delivered pursuant to this Section 2.06 shall, absent manifest error, be
final and conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent for distribution to each Non-Defaulting Lender a commitment
commission (the "Commitment Commission") for the period from and including the
Effective Date to and including the Revolving Loan Maturity Date (or such
earlier date on which the Total Revolving Loan Commitment has been terminated)
computed at a rate per annum equal to 3/4 of 1% of the Unutilized Revolving Loan
Commitment of such Non-Defaulting Lender as in effect from time to time. Accrued
Commitment Commission shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative
Agent for distribution to each Lender (based on each Lender's respective
Percentage) a fee in respect of each Letter of Credit (the "Letter of Credit
Fee") for the period from and including the date of issuance of such Letter of
Credit to and including the date of termination or expiration of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin with respect
to Revolving Loans that are maintained as Eurodollar Loans on the daily Stated
Amount of each such Letter of Credit. Accrued Letter of Credit Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and on the first
day on or after the termination of the Total Revolving Loan Commitment upon
which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to each Issuing Lender,
for its own account, a facing fee in respect of each Letter of Credit issued by
it (the "Facing Fee") for the period from and including the date of issuance of
such Letter of Credit to and including the date of termination or expiration of
such Letter of Credit, computed at a rate per annum equal to 1/4 of 1% on the
daily Stated Amount of such Letter of Credit, provided that in any event the
minimum amount of Facing Fees payable in any twelve-month period for each Letter
of Credit shall be not less than $500; it being agreed that, on the day of
issuance of any Letter of Credit and on each anniversary thereof prior to the
termination or expiration of such Letter of Credit, if $500 will exceed the
amount of Facing Fees that will accrue with respect to such Letter of Credit for
the immediately succeeding twelve-month period, the full $500 shall be payable
on the date of issuance of such Letter of Credit and on each such anniversary
thereof. Except as otherwise provided in the proviso to the immediately
preceding sentence, accrued Facing Fees shall be due
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and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day on or after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to each Issuing Lender,
for its own account, upon each payment under, issuance of, or amendment to, any
Letter of Credit issued by it, such amount as shall at the time of such event be
the administrative charge and the reasonable expenses which such Issuing Lender
is generally imposing in connection with such occurrence with respect to letters
of credit.
(e) The Borrower agrees to pay to the Administrative
Agent such fees as may be agreed to in writing from time to time by the Borrower
and/or any of its Subsidiaries and the Administrative Agent.
3.02 Voluntary Termination of Unutilized Revolving Loan
Commitments. (a) Upon at least three Business Days' prior written notice to the
Administrative Agent at the Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrower shall have the
right, at any time or from time to time, without premium or penalty to terminate
the Total Unutilized Revolving Loan Commitment in whole, or reduce it in part,
pursuant to this Section 3.02(a), in an integral multiple of $1,000,000 in the
case of partial reductions to the Total Unutilized Revolving Loan Commitment,
provided that each such reduction shall apply proportionately to permanently
reduce the Revolving Loan Commitment of each Lender.
(b) In the event of a refusal by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 13.12(b), the Borrower may, subject to its
compliance with the requirements of Section 13.12(b), upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
terminate all of the Commitments of such Lender, so long as all Loans, together
with accrued and unpaid interest, Fees and all other amounts, owing to such
Lender are repaid concurrently with the effectiveness of such termination
pursuant to Section 4.01(b) (at which time Schedule I shall be deemed modified
to reflect such changed amounts) and such Lender's Percentage of all outstanding
Letters of Credit is cash collateralized in a manner satisfactory to the
Administrative Agent and the respective Issuing Lenders, and at such time, such
Lender shall no longer constitute a "Lender" for purposes of this Agreement,
except with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall
survive as to such repaid Lender.
3.03 Mandatory Reduction of Commitments. (a) The Total
Revolving Loan Commitment shall terminate in its entirety on April 30, 2003,
unless the Effective Date has occurred on or prior to such date.
(b) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, unless the Required Lenders otherwise
agree in writing, the Total Revolving
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Loan Commitment shall terminate in its entirety on the date on which a Change of
Control occurs.
(c) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on each date on or after the Effective
Date upon which the Borrower or any of its Subsidiaries receives any cash
proceeds from any issuance or incurrence by the Borrower or any of its
Subsidiaries of Indebtedness for borrowed money (other than Indebtedness for
borrowed money permitted to be incurred pursuant to Section 9.04 as in effect on
the Effective Date), the Total Revolving Loan Commitment shall be permanently
reduced in an amount equal to 100% of the Net Debt Proceeds of the respective
incurrence of Indebtedness.
(d) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on each date on or after the Effective
Date upon which the Borrower or any of its Subsidiaries receives any cash
proceeds from any Asset Sale, the Total Revolving Loan Commitment shall be
permanently reduced in an amount equal to 100% of the Net Sale Proceeds
therefrom; provided, however, that so long as no Default or Event of Default
then exists and such Net Sale Proceeds shall be used to purchase assets (other
than working capital) used or to be used in the businesses permitted pursuant to
Section 9.14 within 359 days following the date of such Asset Sale, the Total
Revolving Loan Commitment shall not be required to be so reduced with respect to
the cash proceeds from the Swiss Clubs Sale and with respect to no more than
$10,000,000 in the aggregate of cash proceeds from other Asset Sales in any
fiscal year of the Borrower, and provided further, that if all or any portion of
such Net Sale Proceeds not required to reduce the Total Revolving Loan
Commitment as provided above in this Section 3.03(d) are not so reinvested
within such 359-day period (or such earlier date, if any, as the Borrower or the
relevant Subsidiary determines not to reinvest the Net Sale Proceeds from such
Asset Sale as set forth above), such remaining portion shall be applied on the
last day of such period (or such earlier date, as the case may be) to reduce the
Total Revolving Loan Commitment as provided above in this Section 3.03(d)
without regard to the preceding proviso.
(e) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, within 30 days following each date on
or after the Effective Date upon which the Borrower or any of its Subsidiaries
receives any cash proceeds from any Recovery Event (other than any Recovery
Event where the Net Recovery Event Proceeds therefrom do not exceed $100,000),
the Total Revolving Loan Commitment shall be permanently reduced in an amount
equal to 100% of the Net Recovery Event Proceeds from such Recovery Event;
provided, however, that so long as no Default or Event of Default then exists
and such Net Recovery Event Proceeds from any such Recovery Event do not exceed
$10,000,000, the Total Revolving Loan Commitment shall not be required to be
reduced from such Net Recovery Event Proceeds within such 30 day period to the
extent that the Borrower has delivered a certificate to the Administrative Agent
within such 30 day period stating that such Net Recovery Event Proceeds shall be
used to replace or restore any properties or assets in respect of which such Net
Recovery Event Proceeds were paid within 180 days following the date of the
receipt of such Net Recovery Event Proceeds (which certificate shall set forth
with reasonable specificity the estimates of the Net Recovery Event Proceeds to
be so expended); and provided further, that (i) if the amount of such proceeds
exceeds $10,000,000, then the Total Revolving Loan Commitment shall be reduced
by the entire amount of such proceeds and not just the portion in excess of
$10,000,000 as provided above in this Section 3.03(e), and (ii) if all or any
portion of
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such Net Recovery Event Proceeds not required to reduce the Total Revolving Loan
Commitment pursuant to the preceding proviso are not so used within 180 days
after the date of the receipt of such Net Recovery Event Proceeds (or such
earlier date, if any, as the Borrower or the relevant Subsidiary determines not
to reinvest the Net Recovery Event Proceeds relating to such Recovery Event as
set forth above), such remaining portion shall be applied on the last day of
such period (or such earlier date, as the case may be) to reduce the Total
Revolving Loan Commitment as provided above in this Section 3.03(e) without
regard to the preceding proviso.
(f) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment
shall be terminated on the Revolving Loan Maturity Date.
(g) Each reduction to, or termination of, the Total
Revolving Loan Commitment pursuant to this Section 3.03 shall be applied to
proportionately reduce or terminate, as the case may be, the Revolving Loan
Commitment of each Lender.
(h) Notwithstanding anything to the contrary contained in
clauses (c), (d) and (e) of this Section 3.03, the Total Revolving Loan
Commitment shall not be reduced to below $15,000,000 by operation of such
clauses unless a Default or an Event of Default exists at the time that any such
reduction to the Total Revolving Loan Commitment would otherwise be required
pursuant to any such clause (in which case, the Total Revolving Loan Commitment
shall continue to be so reduced as provided in any such clause without regard to
this Section 3.03(h)).
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have
the right to prepay the Loans, without premium or penalty, in whole or in part
at any time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent prior to 11:00 A.M. (New York time)
at the Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans (or same day notice in the case of a prepayment of Swingline Loans)
and (y) at least two Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Eurodollar Loans, which
notice (in each case) shall specify (I) whether Revolving Loans or Swingline
Loans shall be prepaid, (II) the amount of such prepayment, (III) in the case of
Revolving Loans, the Types of Revolving Loans to be prepaid, and (IV) in the
case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
such Eurodollar Loans were made, and which notice the Administrative Agent
shall, except in the case of a prepayment of Swingline Loans, promptly transmit
to each of the Lenders; (ii) (x) each partial prepayment of Revolving Loans
pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at
least $500,000 (or such lesser amount as is acceptable to the Administrative
Agent) and (y) each partial prepayment of Swingline Loans pursuant to this
Section 4.01(a) shall be in an aggregate principal amount of at least $50,000
(or such lesser amount as is acceptable to the Administrative Agent), provided
that if any partial prepayment of Eurodollar Loans made pursuant to any
Borrowing shall reduce the outstanding principal amount of Eurodollar Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto, then such Borrowing may not be continued as a Borrow-
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ing of Eurodollar Loans (and same shall automatically be converted into a
Borrowing of Base Rate Loans) and any election of an Interest Period with
respect thereto given by the Borrower shall have no force or effect; and (iii)
each prepayment pursuant to this Section 4.01(a) in respect of any Revolving
Loans made pursuant to a Borrowing shall be applied pro rata among such
Revolving Loans, provided that at the Borrower's election in connection with any
prepayment of Revolving Loans pursuant to this Section 4.01(a), such prepayment
shall not, so long as no Default or Event of Default then exists, be applied to
any Revolving Loan of a Defaulting Lender.
(b) In the event of a refusal by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 13.12(b), the Borrower may, upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
repay all Revolving Loans, together with accrued and unpaid interest, Fees, and
other amounts owing to such Lender in accordance with, and subject to the
requirements of, said Section 13.12(b) so long as (I) the entire Revolving Loan
Commitment of such Lender is terminated concurrently with such repayment
pursuant to Section 3.02(b) (at which time Schedule I shall be deemed modified
to reflect the changed Commitments), (II) such Lender's Percentage of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory to
the Administrative Agent and the respective Issuing Lenders and (III) the
consents, if any, required under Section 13.12(b) in connection with the
repayment pursuant to this clause (b) have been obtained.
4.02 Mandatory Repayments. (a) On any day on which the sum
of (I) the aggregate outstanding principal amount of all Revolving Loans (after
giving effect to all other repayments thereof on such date), (II) the aggregate
outstanding principal amount of all Swingline Loans (after giving effect to all
other repayments thereof on such date) and (III) the aggregate amount of all
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment at
such time, the Borrower shall prepay on such day the principal of Swingline
Loans and, after all Swingline Loans have been repaid in full or if no Swingline
Loans are outstanding, Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of the Letter of Credit Outstandings
exceeds the Total Revolving Loan Commitment at such time, the Borrower shall pay
to the Administrative Agent at the Payment Office on such day an amount of cash
and/or Cash Equivalents equal to the amount of such excess (up to a maximum
amount equal to the Letter of Credit Outstandings at such time), such cash
and/or Cash Equivalents to be held as security for all obligations of the
Borrower to the Issuing Lenders and the Lenders hereunder in a cash collateral
account to be established and controlled by the Administrative Agent.
(b) With respect to each repayment of Revolving Loans
required by this Section 4.02, the Borrower may designate the Types of Revolving
Loans which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which such Eurodollar Loans were made,
provided that: (i) repayments of Eurodollar Loans pursuant to this Section 4.02
may only be made on the last day of an Interest Period applicable thereto unless
all Eurodollar Loans with Interest Periods ending on such date of required
repayment and all Base Rate Loans have been paid in full; (ii) if any repayment
of Eurodollar Loans made
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pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto, such Borrowing shall be automatically converted into
a Borrowing of Base Rate Loans; and (iii) each repayment of any Revolving Loans
made pursuant to a Borrowing shall be applied pro rata among such Revolving
Loans. In the absence of a designation by the Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion with a view, but not an obligation, to
minimize breakage cost owing under Section 1.11.
(c) In addition to any other mandatory repayments
pursuant to this Section 4.02, (i) all then outstanding Revolving Loans shall be
repaid in full on the Revolving Loan Maturity Date, (ii) all then outstanding
Swingline Loans shall be repaid in full on the Swingline Expiry Date and (iii)
unless the Required Lenders otherwise agree in writing, all then outstanding
Loans shall be repaid in full on the date on which a Change of Control occurs.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement and under any
Note shall be made to the Administrative Agent for the account of the Lender or
Lenders entitled thereto not later than 1:00 P.M. (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office; provided that, written notice by the Borrower to the
Administrative Agent regarding the making of any payment from the Borrower's
account at the Payment Office shall be deemed the making of such payment to the
extent that a sufficient amount of funds are available to be withdrawn from such
account and such funds are in fact transferred to the Payment Office. Any
payments under this Agreement or under any Note which are made later than 1:00
P.M. (New York time) on any day shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder and under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Lender pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect to such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to
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the preceding sentence, the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or net profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or in which the principal office or applicable
lending office of such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender, in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts (or such other evidence
reasonably satisfactory to the Administrative Agent) evidencing such payment by
the Borrower. The Borrower agrees to indemnify and hold harmless each Lender,
and reimburse such Lender upon its written request, for the amount of any Taxes
so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income
tax purposes agrees to deliver to the Borrower and the Administrative Agent on
or prior to the Effective Date or, in the case of a Lender that is an assignee
or transferee of an interest under this Agreement pursuant to Section 1.13 or
13.04(b) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) (or successor forms)
certifying to such Lender's entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete
exemption under an income tax treaty) (or any successor forms) pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit D (any
such certificate, a "Section 4.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN (with
respect to the portfolio interest exemption) (or successor form) certifying to
such Lender's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Lender agrees that from
time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, such Lender will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits
of any income tax treaty), or Form W-8BEN (with respect to the portfolio
interest exemption) and a Section 4.04(b)(ii) Certificate, as the case may be,
and such other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or such Lender shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate,
in which case such Lender shall not be required to deliver any such Form or
Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to Section
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13.04(b) and the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, Fees or other
amounts payable hereunder for the account of any Lender which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. federal income tax purposes to the extent that such Lender has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 4.04(a) to gross-up payments to be made to a
Lender in respect of income or similar taxes imposed by the United States if (I)
such Lender has not provided to the Borrower the Internal Revenue Service Forms
required to be provided to the Borrower pursuant to this Section 4.04(b) or (II)
in the case of a payment, other than interest, to a Lender described in clause
(ii) above, to the extent that such Forms do not establish a complete exemption
from withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and except
as set forth in Section 13.04(b), the Borrower agrees to pay any additional
amounts and to indemnify each Lender in the manner set forth in Section 4.04(a)
(without regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes that are
effective after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this
Section 4.04 to a Lender and such Lender determines in its sole discretion that
it has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
Lender shall pay to the Borrower an amount that the Lender shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was obtained
by such Lender in such year as a consequence of such Tax Benefit; provided,
however, that (i) any Lender may determine, in its sole discretion consistent
with the policies of such Lender, whether to seek a Tax Benefit, (ii) any Taxes
that are imposed on a Lender as a result of a disallowance or reduction
(including through the expiration of any tax credit carryover or carryback of
such Lender that otherwise would not have expired) of any Tax Benefit with
respect to which such Lender has made a payment to the Borrower pursuant to this
Section 4.04(c) shall be treated as a Tax for which the Borrower is obligated to
indemnify such Lender pursuant to this Section 4.04 without any exclusions or
defenses, (iii) nothing in this Section 4.04(c) shall require any Lender to
disclose any confidential information to the Borrower (including, without
limitation, its tax returns), and (iv) no Lender shall be required to pay any
amounts pursuant to this Section 4.04(c) at any time when a Default or an Event
of Default exists.
SECTION 5. Conditions Precedent on the Effective Date. The
occurrence of the Effective Date pursuant to Section 13.10 and the obligation of
each Lender to make Loans, and the obligation of each Issuing Lender to issue
Letters of Credit, on the Effective Date, is subject at the time of the making
of such Loans or the issuance of such Letters of Credit to the satisfaction of
the following conditions:
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5.01 Effective Date; Notes. On or prior to the Effective
Date, (i) this Agreement shall have been executed and delivered as provided in
Section 13.10 and (ii) there shall have been delivered to the Administrative
Agent for the account of each of the Lenders that has requested same the
appropriate Revolving Note executed by the Borrower and, if requested by the
Swingline Lender, the Swingline Note executed by the Borrower, in each case in
the amount, maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Effective Date, the
Administrative Agent shall have received a certificate, dated the Effective Date
and signed on behalf of the Borrower by the chairman of the board, the chief
executive officer, the president, the chief financial officer or any vice
president of the Borrower, certifying on behalf of the Borrower that all of the
conditions in Sections 5.06, 5.07, 5.08, 5.09, 5.10 and 6.02 have been satisfied
on such date.
5.03 Opinions of Counsel. On the Effective Date, the
Administrative Agent shall have received (i) from Kirkland & Ellis, special
counsel to the Credit Parties, an opinion addressed to the Administrative Agent,
the Collateral Agent and each of the Lenders and dated the Effective Date
covering the matters set forth in Exhibit E and such other matters incident to
the transactions contemplated herein as the Administrative Agent may reasonably
request, and (ii) reliance letters addressed to the Administrative Agent, the
Collateral Agent and each of the Lenders dated the Effective Date with respect
to all legal opinions delivered in connection with the issuance of the Senior
Notes, which reliance letters (and related legal opinions) shall be in form and
substance reasonably satisfactory to the Administrative Agent.
5.04 Corporate Documents; Proceedings; etc. (a) On the
Effective Date, the Administrative Agent shall have received a certificate from
each Credit Party, dated the Effective Date, signed by the chairman of the
board, the chief executive officer, the president, the chief financial officer
or any vice president of such Credit Party, and attested to by the secretary or
any assistant secretary of such Credit Party, in the form of Exhibit F with
appropriate insertions, together with copies of the certificate or articles of
incorporation and by-laws (or equivalent organizational documents), as
applicable, of such Credit Party and the resolutions of such Credit Party
referred to in such certificate, and each of the foregoing shall be in form and
substance reasonably acceptable to the Administrative Agent.
(b) On the Effective Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
reasonably satisfactory in form and substance to the Administrative Agent, and
the Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams or facsimiles, if
any, which the Administrative Agent reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate, limited liability company or governmental authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Non-Compete Agreements; Tax Sharing Agreements; and
Existing Indebtedness Agreements. On or prior to the Effective Date, there shall
have been delivered to the Administrative Agent true and correct copies of the
following documents:
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(i) all Plans (and for each Plan that is required to file
an annual report on Internal Revenue Service Form 5500-series, a copy
of the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in Section
3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees of
the Borrower or any of its Subsidiaries or ERISA Affiliates (provided
that the foregoing shall apply in the case of any multiemployer plan,
as defined in Section 4001(a)(3) of ERISA, only to the extent that any
document described herein is in the possession of the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate, or is reasonably
available thereto from the sponsor or trustee of any such plan)
(collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by the Borrower or any of
its Subsidiaries governing the terms and relative rights of its equity
interests and any agreements entered into by its shareholders relating
to any such entity with respect to its equity interests (collectively,
the "Shareholders' Agreements");
(iii) all material agreements with members of, or with
respect to, the management of the Borrower or any of its Subsidiaries
(collectively, the "Management Agreements");
(iv) all non-compete agreements entered into by the
Borrower or any of its Subsidiaries which restrict the activities of
the Borrower or any of its Subsidiaries (collectively, the "Non-Compete
Agreements");
(v) all tax sharing, tax allocation and other similar
agreements entered into by the Borrower or any of its Subsidiaries
(collectively, the "Tax Sharing Agreements"); and
(vi) all agreements evidencing or relating to Indebtedness
of the Borrower or any of its Subsidiaries which is to remain
outstanding after giving effect to the Transaction (the "Existing
Indebtedness Agreements").
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Non-Compete Agreements, Tax Sharing Agreements and Existing
Indebtedness Agreements shall be in form and substance reasonably satisfactory
to the Administrative Agent and shall be in full force and effect on the
Effective Date.
5.06 Senior Preferred Stock Repurchase. On the Effective
Date, (i) the Borrower shall have repurchased all of its outstanding senior
preferred stock, par value $1.00 per share, for an aggregate cash consideration
of no more than $68,000,000 (the "Senior Preferred Stock Repurchase"), and (A)
such senior preferred stock shall be immediately retired and not thereafter
reissued and (B) the Senior Preferred Stock Repurchase shall be consummated in
accordance with the documentation related thereto and all applicable laws and
(ii) the
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Administrative Agent shall have received evidence, in form and substance
reasonably satisfactory to it, that the Senior Preferred Stock Repurchase has
been consummated.
5.07 Refinancing. (a) On the Effective Date, all
Indebtedness under the Existing Credit Agreement shall have been repaid in full
and all commitments in respect thereof shall have been terminated and all Liens
and guaranties in connection therewith shall have been terminated (and all
appropriate releases, termination statements or other instruments of assignment
with respect thereto shall have been obtained) to the reasonable satisfaction of
the Administrative Agent. The Administrative Agent shall have received
satisfactory evidence (including satisfactory pay-off letters, mortgage
releases, intellectual property releases and UCC-3 termination statements) that
the matters set forth in the immediately preceding sentence have been satisfied
as of the Effective Date.
(b) On the Effective Date, (i) the Borrower shall have
repaid in full all of its outstanding Existing Mezzanine Subordinated Notes in
accordance with the terms of the Existing Mezzanine Subordinated Notes
Agreement, and the Existing Mezzanine Subordinated Notes Agreement shall have
been terminated (the "Existing Mezzanine Subordinated Notes Redemption") and
(ii) the Administrative Agent shall have received evidence, in form and
substance reasonably satisfactory to it, that the Existing Mezzanine
Subordinated Notes Redemption has been consummated.
(c) On the Effective Date, (i) the Borrower shall have
delivered to the Existing Senior Notes Trustee an irrevocable notice of
redemption for all outstanding Existing Senior Notes, which redemption (the
"Existing Senior Notes Redemption") shall be effected on a date (the "Existing
Senior Notes Redemption Date") no later than 30 days following the Effective
Date in accordance with the optional redemption provisions set forth in Article
Three of the Existing Senior Notes Indenture, (ii) the Borrower shall have
irrevocably deposited with the Existing Senior Notes Trustee cash in an amount
sufficient to pay and discharge the entire Indebtedness on the outstanding
Existing Senior Notes for principal of, premium, if any, and interest on such
Existing Senior Notes through the Existing Senior Notes Redemption Date, (iii)
the Borrower shall have paid all other sums that are then payable by the
Borrower under the Existing Senior Notes Indenture, (iv) the Borrower shall have
irrevocably instructed the Existing Senior Notes Trustee in writing to apply the
funds referred to in preceding clause (ii) to the payment of the Existing Senior
Notes on the Existing Senior Notes Redemption Date, and (v) the Administrative
Agent shall have received evidence, in form and substance reasonably
satisfactory to it, that the matters set forth in preceding clauses (i) through
(iv) have been satisfied.
5.08 Senior Notes. On the Effective Date, (i) the Borrower
shall have received gross cash proceeds of $255,000,000 from the issuance by it
of a like principal amount of the Senior Notes and (ii) the Borrower shall have
used the entire amount of such gross cash proceeds to make payments owing in
connection with the Transaction prior to utilizing any proceeds of the Loans for
such purpose. All terms and conditions (and the documentation) in connection
with the issuance of the Senior Notes (including, without limitation,
amortization, maturities, interest rate, interest periods, covenants, defaults,
remedies, sinking fund provisions and other terms) shall be reasonably
satisfactory to the Administrative Agent and the Required Lenders and all
conditions precedent to the issuance of the Senior Notes as set forth in the
Senior Note Documents shall have been satisfied (and not waived without the
consent of the Administrative
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Agent and the Required Lenders) to the reasonable satisfaction of the
Administrative Agent and the Required Lenders. The issuance of the Senior Notes
shall have been consummated in all material respects in accordance with the
terms and conditions of the Senior Note Documents and all applicable laws.
5.09 Adverse Change, Approvals. (a) Since December 31,
2002 (but for this purpose assuming that the Transaction had occurred prior to
December 31, 2002), nothing shall have occurred (and neither the Administrative
Agent nor any Lender shall have become aware of any facts or conditions not
previously known) which the Administrative Agent or the Required Lenders shall
determine has had, or could reasonably be expected to have, (i) a Material
Adverse Effect or (ii) a material adverse effect on the Transaction.
(b) On or prior to the Effective Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the Transaction, the other transactions contemplated hereby and
the granting of Liens under the Credit Documents shall have been obtained and
remain in effect, and all applicable waiting periods with respect thereto shall
have expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transaction or the other transactions contemplated by the
Documents or otherwise referred to herein or therein. On the Effective Date,
there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon the
Transaction or the other transactions contemplated by the Documents or otherwise
referred to herein or therein.
5.10 Litigation. On the Effective Date, there shall be no
actions, suits, investigations or proceedings pending or threatened (i) with
respect to the Transaction, this Agreement or any other Document or (ii) which
the Administrative Agent or the Required Lenders shall determine has had, or
could reasonably be expected to have, a materially adverse effect on the
Transaction or a Material Adverse Effect.
5.11 Pledge Agreement. On the Effective Date, each Credit
Party shall have duly authorized, executed and delivered the Pledge Agreement in
the form of Exhibit G (as amended, modified or supplemented from time to time,
the "Pledge Agreement") and shall have delivered to the Collateral Agent, as
pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to
therein and then owned by such Credit Party, (x) endorsed in blank in the case
of promissory notes constituting Pledge Agreement Collateral and (y) together
with executed and undated endorsements for transfer in the case of equity
interests constituting certificated Pledge Agreement Collateral, along with
evidence that all other actions necessary or, in the reasonable opinion of the
Collateral Agent desirable, to perfect the security interests purported to be
created by the Pledge Agreement have been taken and the Pledge Agreement shall
be in full force and effect.
5.12 Security Agreement. On the Effective Date, each
Credit Party shall have duly authorized, executed and delivered the Security
Agreement in the form of Exhibit H (as amended, modified or supplemented from
time to time, the "Security Agreement") covering all of such Credit Party's
Security Agreement Collateral, together with:
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(i) proper financing statements (Form UCC-1 or the
equivalent) fully authorized for filing under the UCC or other
appropriate filing offices of each jurisdiction as may be necessary or,
in the reasonable opinion of the Collateral Agent desirable, to perfect
the security interests purported to be created by the Security
Agreement;
(ii) certified copies of requests for information or
copies (Form UCC-11), or equivalent reports as of a recent date,
listing all effective financing statements that name the Borrower or
any of its Subsidiaries as debtor and that are filed in the
jurisdictions referred to in clause (i) above and in such other
jurisdictions in which Collateral is located on the Effective Date,
together with copies of such other financing statements that name the
Borrower or any of its Subsidiaries as debtor (none of which shall
cover any of the Collateral except (x) to the extent evidencing
Permitted Liens or (y) those in respect of which the Collateral Agent
shall have received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law fully executed
for filing);
(iii) evidence of the completion of all other recordings
and filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent
desirable, to perfect the security interests intended to be created by
the Security Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken, and the Security Agreement shall be in full
force and effect.
In addition, the Borrower shall have used its commercially reasonable efforts to
obtain "control agreements" in the form attached as Annex G to the Security
Agreement (with such modifications thereto as may be agreed to by the
Administrative Agent) from JP Morgan Chase Bank with respect to those deposit
accounts listed on Annex F-2 to the Security Agreement, and the Borrower shall
have delivered to the Administrative Agent fully executed counterparts of those
"control agreements" so obtained by the Effective Date.
5.13 Subsidiaries Guaranty. On the Effective Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit I (as amended, modified or
supplemented from time to time, the "Subsidiaries Guaranty"), and the
Subsidiaries Guaranty shall be in full force and effect.
5.14 Financial Statements; Pro Forma Financials;
Projections. On or prior to the Effective Date, the Administrative Agent shall
have received true and correct copies of the historical financial statements,
the pro forma financial statements and the Projections referred to in Sections
7.05(a) and (d), which historical financial statements, pro forma financial
statements and Projections shall be in form and substance satisfactory to the
Administrative Agent and the Required Lenders.
5.15 Solvency Opinion; Insurance Certificates. On the
Effective Date, the Administrative Agent shall have received:
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(i) a solvency opinion from American Appraisal
Associates, addressed to the Administrative Agent and each of the
Lenders and dated the Effective Date, in form and substance reasonably
acceptable to the Administrative Agent, setting forth the conclusions
that, after giving effect to the Transaction and the incurrence of all
the financings contemplated herein, the Borrower and its Subsidiaries
(taken as a whole) are not insolvent and will not be rendered insolvent
by the indebtedness incurred in connection therewith, will not be left
with unreasonably small capital with which to engage in their
respective businesses and will not have incurred debts beyond their
ability to pay such debts as they mature; and
(ii) certificates of insurance complying with the
requirements of Section 8.03 for the business and properties of the
Borrower and its Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent and naming the Collateral
Agent as an additional insured and/or as loss payee, and stating that
such insurance shall not be canceled without at least 30 days' prior
written notice by the insurer to the Collateral Agent.
5.16 Fees, etc. On the Effective Date, the Borrower shall
have paid to the Administrative Agent and each Lender all costs, fees and
expenses (including, without limitation, reasonable legal fees and expenses) and
other compensation contemplated hereby payable to the Administrative Agent or
such Lender to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Lender to make Loans (including Loans made on the Effective
Date), and the obligation of each Issuing Lender to issue Letters of Credit
(including Letters of Credit issued on the Effective Date), is subject, at the
time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 Effective Date. The Effective Date shall have
occurred.
6.02 No Default; Representations and Warranties. At the
time of each such Credit Event and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.03 Notice of Borrowing; Letter of Credit Request. (a)
Prior to the making of each Revolving Loan (other than a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received
a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the
making of each Swingline Loan, the Swingline Lender shall have received the
notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit (other
than the Letters of Credit referred to in Section 2.02(b)), the Administrative
Agent and the respective Issuing
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Lender shall have received a Letter of Credit Request meeting the requirements
of Section 2.03(a).
6.04 No Excess Cash. The obligation of each Lender to make
Revolving Loans, and the obligation of the Swingline Lender to make Swingline
Loans, in each case, shall be subject to the satisfaction of the condition that
at the time of each such making of a Revolving Loan or Swingline Loan and
immediately after giving effect thereto the Borrower and its Subsidiaries shall
not hold cash and Cash Equivalents in an aggregate amount (after giving effect
to the incurrence of such Credit Event and the application of proceeds therefrom
and the application of any other cash or Cash Equivalents on hand (to the extent
such proceeds and/or other cash or Cash Equivalents are actually utilized by the
Borrower and/or any other Subsidiary of the Borrower on the respective date of
incurrence of the respective Credit Event for a permitted purpose other than an
investment in Cash Equivalents)) in excess of (i) $25,000,000 at any time on or
prior to December 31, 2003 or (ii) $15,000,000 at any time thereafter.
The occurrence of the Effective Date and the acceptance of the
benefits of each Credit Event shall constitute a representation and warranty by
the Borrower to the Administrative Agent and each of the Lenders that all the
conditions specified in Section 5 (with respect to the occurrence of the
Effective Date and any Credit Events on the Effective Date) and in this Section
6 (with respect to Credit Events on or after the Effective Date) and applicable
to such Credit Event are satisfied as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Administrative Agent at the Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts or copies for each
of the Lenders and shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.
SECTION 7. Representations, Warranties and Agreements. In
order to induce the Lenders to enter into this Agreement and to make the Loans,
and issue (or participate in) the Letters of Credit as provided herein, the
Borrower makes the following representations, warranties and agreements, in each
case after giving effect to the Transaction, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans and the issuance of the Letters of Credit, with the occurrence of the
Effective Date and each Credit Event on or after the Effective Date being deemed
to constitute a representation and warranty that the matters specified in this
Section 7 are true and correct in all material respects on and as of the
Effective Date and on the date of each such other Credit Event (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
7.01 Organizational Status. Each of the Borrower and each
of its Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, (ii) has the corporate,
partnership or limited liability company power and authority, as the case may
be, to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the
ownership, leasing or operation of its property or the
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conduct of its business requires such qualifications, except for failures to be
so qualified which, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
7.02 Power and Authority. Each Credit Party has the
corporate, partnership or limited liability company power and authority, as the
case may be, to execute, deliver and perform the terms and provisions of each of
the Documents to which it is party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of each of such
Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is party, and each of such Documents constitutes its
legal, valid and binding obligation enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will conflict with
or result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of any Credit Party or
any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, in each case to which any Credit Party or any of its
Subsidiaries is a party or by which it or any its property or assets is bound or
to which it may be subject, or (iii) will violate any provision of the
certificate or articles of incorporation, certificate of formation, limited
liability company agreement, partnership agreement or by-laws (or equivalent
organizational documents), as applicable, of any Credit Party or any of its
Subsidiaries.
7.04 Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for (x) those that have otherwise been obtained or made on or prior to
the Effective Date and which remain in full force and effect on the Effective
Date and (y) filings which are necessary to perfect the security interests
created under the Security Documents, which filings will be made within ten days
following the Effective Date), or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to be obtained or made by,
or on behalf of, any Credit Party to authorize, or is required to be obtained or
made by, or on behalf of, any Credit Party in connection with, (i) the
execution, delivery and performance of any Document or (ii) the legality,
validity, binding effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Borrower's Projections. (a) (i) The consolidated
balance sheets of the Borrower and its Subsidiaries for the Borrower's fiscal
years ended on December 31, 2000, December 31, 2001 and December 31, 2002,
respectively, and (in each case) the related consolidated statements of income,
cash flows and shareholders' equity (or deficit, as the case may be) of the
Borrower and
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its Subsidiaries for such fiscal years ended on such dates, copies of which have
been furnished to the Lenders prior to the Effective Date, present fairly in all
material respects the consolidated financial position of the Borrower and its
Subsidiaries at the dates of such balance sheets and the consolidated results of
the operations of the Borrower and its Subsidiaries for the periods covered
thereby. All of the foregoing historical financial statements have been prepared
in accordance with generally accepted accounting principles consistently
applied.
(ii) The pro forma consolidated financial statements of
the Borrower and its Subsidiaries at December 31, 2002 after giving effect to
the Transaction and the financing therefor, copies of which have been furnished
to the Lenders prior to the Effective Date, present fairly in all material
respects the pro forma consolidated financial position of the Borrower and its
Subsidiaries as of December 31, 2002 and the pro forma consolidated results of
operations of the Borrower and its Subsidiaries for the twelve-month period
ended on December 31, 2002. Such pro forma financial statements have been
prepared on a basis consistent with the historical financial statements set
forth in clause (i) of this Section 7.05(a).
(b) On and as of the Effective Date, and after giving
effect to the Transaction and to all Indebtedness (including the Loans and the
Senior Notes) being incurred or assumed and Liens created by the Credit Parties
in connection therewith, (i) the sum of the assets, at a fair valuation, of the
Borrower on a stand-alone basis and of the Borrower and its Subsidiaries taken
as a whole will exceed their respective debts, (ii) each of the Borrower on a
stand-alone basis and the Borrower and its Subsidiaries taken as a whole have
not incurred and do not intend to incur, and do not believe that they will
incur, debts beyond their respective ability to pay such debts as such debts
mature, and (iii) the Borrower on a stand-alone basis and the Borrower and its
Subsidiaries taken as a whole will have sufficient capital with which to conduct
their respective businesses. For purposes of this Section 7.05(b), "debt" means
any liability on a claim, and "claim" means (a) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured or (b) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(c) Except (i) as fully disclosed in the financial
statements referred to in Section 7.05(a) and (ii) for the Obligations and the
Senior Notes, there were as of the Effective Date no liabilities or obligations
with respect to the Borrower or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. As of the Effective Date and except for the
Obligations and the Senior Notes, the Borrower knows of no reasonable basis for
the assertion against it or any of its Subsidiaries of any liability or
obligation of any nature whatsoever that is not fully disclosed in the financial
statements or referred to in Section 7.05(a) which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
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(d) The Projections delivered to the Administrative Agent
and the Lenders prior to the Effective Date have been prepared in good faith and
were based on assumptions reasonable at the time of the preparation thereof (and
which assumptions remain reasonable on the Effective Date). On the Effective
Date, the Borrower believes that the Projections are reasonable and attainable,
it being recognized by the Lenders, however, that projections as to future
events are not to be viewed as facts and that the actual results during the
period or periods covered by the Projections may differ from the projected
results.
(e) After giving effect to the Transaction (but for this
purpose assuming that the Transaction and the related financing had occurred
prior to December 31, 2002), since December 31, 2002, there has been no change
in the condition (financial or otherwise), business, operations, assets,
liabilities or prospects of the Borrower or any of its Subsidiaries that has
had, or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
7.06 Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened (i) with
respect to the Transaction or any Document or (ii) that could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect.
7.07 True and Complete Disclosure. All factual information
(taken as a whole) furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Documents) for purposes of or in connection with
this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds
of the Revolving Loans and the Swingline Loans will be used for the working
capital and general corporate purposes of the Borrower and its Subsidiaries;
provided that no proceeds of Revolving Loans or Swingline Loans may be used to
effect the Transaction or to pay any fees and expenses incurred in connection
therewith.
(b) No part of any Credit Event (or the proceeds thereof)
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the use of the proceeds thereof nor the occurrence of any other Credit
Event will violate or be inconsistent with the provisions of Regulation T, U or
X of the Board of Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of the Borrower and
each of its Subsidiaries has timely filed or caused to be timely filed with the
appropriate taxing authority all federal and state income tax returns and all
other material tax returns, domestic and foreign (the "Returns") required to be
filed by, or with respect to the income, properties or operations of, the
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Borrower and/or any of its Subsidiaries. The Returns accurately reflect in all
material respects all liability for taxes of the Borrower and its Subsidiaries
for the periods covered thereby. Each of the Borrower and each of its
Subsidiaries has paid all taxes and assessments due and payable by it, other
than those that are immaterial and those that are being contested in good faith
and adequately disclosed and fully provided for on the financial statements of
the Borrower and its Subsidiaries in accordance with generally accepted
accounting principles. There is no action, suit, proceeding, investigation,
audit or claim now pending or, to the best knowledge of the Borrower, threatened
by any authority regarding any taxes relating to the Borrower or any of its
Subsidiaries that, either individually or in the aggregate, could reasonably be
expected to result in a material liability to the Borrower and its Subsidiaries
taken as a whole. As of the Effective Date, neither the Borrower nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of the Borrower or any of its Subsidiaries, or is
aware of any circumstances that would cause the taxable years or other taxable
periods of the Borrower or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations. Neither the Borrower nor any of its
Subsidiaries has provided, with respect to themselves or property held by them,
any consent under Section 341 of the Code.
7.10 Compliance with ERISA. (a) Schedule V sets forth, as
of the Effective Date, the name of each Plan. Except to the extent that a breach
of any of the following representations or warranties in this clause (a), either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect: each Plan is in compliance with its terms and with all
applicable laws, including, without limitation, ERISA and the Code; each Plan
(and each related trust, if any) that is intended to be qualified under Section
401(a) of the Code has received a determination letter from the Internal Revenue
Service or has submitted or is within the remedial amendment period for
submitting an application for a determination letter with the Internal Revenue
Service, or is a prototype plan that has received an Internal Revenue Service
opinion letter with respect to the prototype plan document, to the effect that
it meets the requirements of Sections 401(a) and 501(a) of the Code, and, to the
Borrower's knowledge, no event has occurred and no condition or circumstance has
existed that has resulted, or would be likely to result, in the revocation of
any such determination or opinion, rejection of such an application or the
failure to issue such a favorable determination letter; no Reportable Event has
occurred; no Plan that is a multiemployer plan (as defined in Section 4001(a)(3)
of ERISA) is insolvent or in reorganization; no Plan has an Unfunded Current
Liability; no Plan that is subject to Section 412 of the Code or Section 302 of
ERISA has an accumulated funding deficiency, within the meaning of such Sections
of the Code or ERISA, or has applied for or received a waiver of an accumulated
funding deficiency or an extension of any amortization period, within the
meaning of Section 412 of the Code or Section 303 or 304 of ERISA; all
contributions required to be made with respect to a Plan have been timely made;
neither the Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate
has incurred any liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or, to the Borrower's knowledge, expects to
incur any such liability under any of the foregoing sections with respect to any
Plan; no condition exists which presents a material risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; no
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action, suit, proceeding, hearing, audit or investigation with respect to the
administration, operation or the investment of assets of any Plan (other than
routine claims for benefits) is pending, or, to the Borrower's knowledge,
expected or threatened; using actuarial assumptions and computation methods
consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates to all
Plans that are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date hereof could not
reasonably be expected, either individually or in the aggregate, to be material;
each group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) which covers or has covered employees or former
employees of the Borrower, any Subsidiary of the Borrower, or any ERISA
Affiliate has at all times been operated in compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; no lien
imposed under the Code or ERISA on the assets of the Borrower or any Subsidiary
of the Borrower or any ERISA Affiliate exists or is likely to arise on account
of any Plan; and the Borrower and its Subsidiaries do not maintain or contribute
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan the obligations with respect to
which could reasonably be expected to be material.
(b) Except to the extent that a breach of any of the following
representations or warranties in this clause (b), either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect:
each Foreign Pension 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 authorities; all contributions required to be made
with respect to a Foreign Pension Plan have been timely made; neither the
Borrower nor any of its Subsidiaries has incurred any obligation in connection
with the termination of, or withdrawal from, any Foreign Pension Plan; the
present value of the accrued benefit liabilities (whether or not vested) under
each Foreign Pension Plan, determined as of the end of the Borrower's most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
7.11 The Security Documents. (a) The provisions of the
Security Agreement are effective to create in favor of the Collateral Agent for
the benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Collateral Agent, for the
benefit of the Secured Creditors, has (or within 10 days (or 90 days in the case
of filings to be made with the United States Copyright Office or the United
States Patent and Trademark Office) following the Effective Date will have) a
fully perfected security interest in all right, title and interest in all of the
Security Agreement Collateral described therein, subject to no other Liens other
than Permitted Liens. The recordation of (x) the Grant of Security Interest in
U.S. Patents, if applicable, and (y) the Grant of Security Interest in U.S.
Trademarks, if applicable, in the respective form attached to the Security
Agreement, in each case in the United States Patent and Trademark Office,
together with filings on Form UCC-1 made pursuant to the Security Agreement,
will create, as may be perfected by such filings and recordation, a perfected
security interest in the United States trademarks and patents covered by the
Security Agreement, and the
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recordation of the Grant of Security Interest in U.S. Copyrights, if applicable,
in the form attached to the Security Agreement with the United States Copyright
Office, together with filings on Form UCC-1 made pursuant to the Security
Agreement, will create, as may be perfected by such filings and recordation, a
perfected security interest in the United States copyrights covered by the
Security Agreement.
(b) The security interests created under the Pledge
Agreement in favor of the Collateral Agent, as Pledgee, for the benefit of the
Secured Creditors, constitute perfected security interests in the Pledge
Agreement Collateral described in the Pledge Agreement, subject to no security
interests of any other Person. No filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security interests
created in the Pledge Agreement Collateral under the Pledge Agreement other than
with respect to that portion of the Pledge Agreement Collateral constituting a
"general intangible" under the UCC which is not also a "certificated security"
(as defined in the UCC as in effect with New York).
7.12 Properties. All Real Property owned or leased by the
Borrower or any of its Subsidiaries as of the Effective Date, and the nature of
the interest therein, is set forth in Schedule IV. Each of the Borrower and each
of its Subsidiaries has good and marketable title to all material properties
owned by it, and a valid leasehold interest in all material property leased by
it, including (in each case) all material property reflected in the most recent
historical balance sheets referred to in Section 7.05(a) (except as sold or
otherwise disposed of since the date of such balance sheet in the ordinary
course of business or as permitted by the terms of this Agreement), free and
clear of all Liens, other than Permitted Liens.
7.13 Capitalization. On the Effective Date, the authorized
capital stock of the Borrower consists of (i) 2,500,000 shares of Class A common
stock, par value $.001 per share (the "Class A Common Stock"), of which
1,176,042.81 shares are issued and outstanding, (ii) 500,000 shares of Class B
common stock, par value $.001 per share (the "Class B Common Stock"), no shares
of which are issued and outstanding, (iii) 100,000 shares of senior preferred
stock, par value $1.00 per share, no shares of which are issued or outstanding,
(iv) 200,000 shares of Series A preferred stock, par value $1.00 per share, of
which 153,636.54 shares are issued and outstanding, and (v) 200,000 shares of
Series B preferred stock, par value $1.00 per share, of which 109,540.68 shares
are issued or outstanding. All outstanding shares of capital stock of the
Borrower have been duly and validly issued and are fully paid and
non-assessable. The Borrower does not have outstanding any capital stock or
other securities convertible into or exchangeable for its capital stock or any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock,
except for options and warrants to purchase shares of the Borrower's common
stock and/or Qualified Preferred Stock which may be issued from time to time.
7.14 Subsidiaries. The Borrower has no Subsidiaries other
than (i) those Subsidiaries listed on Schedule VI (which Schedule identifies the
direct owner of each such Subsidiary on the Effective Date and their percentage
ownership interest therein) and (ii) new Subsidiaries created in compliance with
Section 9.15.
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7.15 Compliance with Statutes, etc. Each of the Borrower
and each of its Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including, without limitation,
applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls), except such noncompliances as could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
7.16 Investment Company Act. Neither the Borrower nor any
of its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.17 Public Utility Holdings Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holdings Company Act of 1935, as amended.
7.18 Environmental Matters. (a) Each of the Borrower and
each of its Subsidiaries is in compliance with all applicable Environmental Laws
and the requirements of any permits issued under such Environmental Laws. There
are no pending or, to the knowledge of the Borrower, threatened Environmental
Claims against the Borrower or any of its Subsidiaries or any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries (including,
to the knowledge of the Borrower, any such claim arising out of the ownership,
lease or operation by the Borrower or any of its Subsidiaries of any Real
Property formerly owned, leased or operated by the Borrower or any of its
Subsidiaries but no longer owned, leased or operated by the Borrower or any of
its Subsidiaries). There are no facts, circumstances, conditions or occurrences
with respect to the business or operations of the Borrower or any of its
Subsidiaries, or any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries (including, to the knowledge of the Borrower, any Real
Property formerly owned, leased or operated by the Borrower or any of its
Subsidiaries but no longer owned, leased or operated by the Borrower or any of
its Subsidiaries) or, to the knowledge of the Borrower, any property adjoining
or adjacent to any such Real Property that could be reasonably expected (i) to
form the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries or (ii) to cause any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries to be subject to any
restrictions on the ownership, lease, occupancy or transferability of such Real
Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been
generated, used, treated or stored on, or transported to or from, or Released on
or from, any Real Property owned, leased or operated by the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, any property adjoining or
adjacent to any Real Property, where such generation, use, treatment, storage,
transportation or Release has violated or could be reasonably expected to
violate any applicable Environmental Law or give rise to an Environmental Claim.
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(c) Notwithstanding anything to the contrary in this
Section 7.18, the representations and warranties made in this Section 7.18 shall
be untrue only if the effect of any or all conditions, violations, claims,
restrictions, failures and noncompliances of the types described above could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
7.19 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect. There is (i) no unfair labor practice complaint pending against the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries and (iii) no union
representation question exists with respect to the employees of the Borrower or
any of its Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either individually or in the aggregate) such as could
not reasonably be expected to have a Material Adverse Effect.
7.20 Intellectual Property, etc. Each of the Borrower and
each of its Subsidiaries owns or has the right to use all the domestic and
foreign patents, trademarks, permits, domain names, service marks, trade names,
copyrights, licenses, franchises, inventions, trade secrets, proprietary
information and know-how of any type, whether or not written (including, but not
limited to, rights in computer programs, databases and data collections) and
formulas, or has rights with respect to the foregoing, and has obtained
assignments of all licenses and other proprietary rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others which, or the failure to obtain which, as the case may
be, could reasonably be expected, either individually or in the aggregate, to
have a Material Adverse Effect.
7.21 Indebtedness. Schedule VII sets forth a true and
complete list of all Indebtedness (including Contingent Obligations) of the
Borrower and its Subsidiaries as of the Effective Date (excluding the
Obligations and the Senior Notes, the "Existing Indebtedness") and which is to
remain outstanding after giving effect to the Transaction, in each case showing
the aggregate principal amount thereof and the name of the respective borrower
and any Credit Party or any of its Subsidiaries which directly or indirectly
guarantees such debt.
7.22 Insurance. Schedule VIII sets forth a true and
complete listing of all insurance maintained by the Borrower and its
Subsidiaries as of the Effective Date, with the amounts insured (and any
deductibles) set forth therein.
7.23 Representations and Warranties in Other Documents.
All representations and warranties by the Borrower and its Subsidiaries set
forth in the other Documents were true and correct in all material respects at
the time as of which such representations and warranties were made (or deemed
made) and shall be true and correct in all material respects as of the Effective
Date as if such representations or warranties were made on and as of such date
(it being
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understood and agreed that any such representation or warranty which by its
terms is made as of a specified date shall be true and correct in all material
respects as of such specified date).
7.24 Legal Names; Type of Organization (and Whether a
Registered Organization); Jurisdiction of Organization; etc. Schedule IX sets
forth, as of the Effective Date, the legal name of the Borrower and each
Subsidiary Guarantor, the type of organization of the Borrower and each
Subsidiary Guarantor, whether or not the Borrower and each Subsidiary Guarantor
is a registered organization (within the meaning of the New York UCC), the
jurisdiction of organization of the Borrower and each Subsidiary Guarantor, the
location (within the meaning of the New York UCC) of the Borrower and each
Subsidiary Guarantor, and the organizational identification number (if any) of
the Borrower and each Subsidiary Guarantor.
SECTION 8. Affirmative Covenants. The Borrower hereby
covenants and agrees that on and after the Effective Date and until the Total
Revolving Loan Commitment and all Letters of Credit have terminated and the
Loans, Notes and Unpaid Drawings (in each case together with interest thereon),
Fees and all other Obligations (other than indemnities described in Section
13.13 which are not then due and payable) incurred hereunder and thereunder, are
paid in full:
8.01 Information Covenants. The Borrower will furnish to
each Lender:
(a) Monthly Reports. Within 30 days after the end of each
fiscal month of the Borrower (commencing with its fiscal month ending
on April 30, 2003), the consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal month and the related
consolidated statements of income and retained earnings (or accumulated
deficit, as the case may be) and statement of cash flows for such
fiscal month and for the elapsed portion of the fiscal year ended with
the last day of such fiscal month, in each case setting forth
comparative figures for the corresponding fiscal month in the prior
fiscal year and comparable budgeted figures for such fiscal month as
set forth in the respective budget delivered pursuant to Section
8.01(e), all of which shall be certified by an Authorized Financial
Officer of the Borrower that they fairly present in all material
respects in accordance with generally accepted accounting principles
the financial condition of the Borrower and its Subsidiaries as of the
dates indicated and the results of their operations for the periods
indicated, subject to normal year-end audit adjustments and the absence
of footnotes.
(b) Quarterly Financial Statements. Within 45 days after
the close of each of the first three quarterly accounting periods in
each fiscal year of the Borrower (commencing with the quarterly
accounting period ended on March 31, 2003), (i) the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of
such quarterly accounting period and the related consolidated
statements of income and retained earnings (or accumulated deficit, as
the case may be) and statement of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly accounting period, in each case
setting forth comparative figures for the corresponding quarterly
accounting period in the prior fiscal year and comparable budgeted
figures for such quarterly accounting period as set forth in the
respective budget delivered pursuant to Section 8.01(e), all of which
shall be certified
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by an Authorized Financial Officer of the Borrower that they fairly
present in all material respects in accordance with generally accepted
accounting principles the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their
operations for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes, and (ii) management's
discussion and analysis of the important operational and financial
developments during such quarterly accounting period (it being
understood and agreed that any such management's discussion and
analysis set forth in the Borrower's Form 10-Q filed with the SEC for
the respective quarterly accounting period shall satisfy the
requirements of this sub-clause (ii) so long as a copy of such Form
10-Q has been delivered to the Lenders pursuant to this Section 8.01(b)
or Section 8.01(h)).
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of the Borrower, (i) the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings (or accumulated deficit, as the case may be) and statement of
cash flows for such fiscal year setting forth comparative figures for
the preceding fiscal year and certified by PricewaterhouseCoopers LLP
or other independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent,
together with a report of such accounting firm stating that in the
course of its regular audit of the financial statements of the Borrower
and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default or Event of Default relating to financial or
accounting matters which has occurred and is continuing or, if in the
opinion of such accounting firm such a Default or an Event of Default
has occurred and is continuing, a statement as to the nature thereof,
and (ii) management's discussion and analysis of the important
operational and financial developments during such fiscal year (it
being understood and agreed that any such management's discussion and
analysis set forth in the Borrower's Form 10-K filed with the SEC for
the respective fiscal year shall satisfy the requirements of this
sub-clause (ii) so long as a copy of such Form 10-K has been delivered
to the Lenders pursuant to this Section 8.01(c) or Section 8.01(h)).
(d) Management Letters. Promptly after the Borrowers' or
any of its Subsidiaries' receipt thereof, a copy of any "management
letter" received from its certified public accountants and management's
response thereto.
(e) Budgets. No later than 30 days following the first
day of each fiscal year of the Borrower, a budget in form reasonably
satisfactory to the Administrative Agent (including budgeted statements
of income, sources and uses of cash and balance sheets for the Borrower
and its Subsidiaries on a consolidated basis) for each of the twelve
months of such fiscal year prepared in detail setting forth, with
appropriate discussion, the principal assumptions upon which such
budget is based.
(f) Officer's Certificates. At the time of the delivery
of the financial statements provided for in Sections 8.01(b) and (c), a
compliance certificate from an Authorized Financial Officer of the
Borrower in the form of Exhibit J certifying on behalf of the Borrower
that, to such officer's knowledge after due inquiry, no Default or
Event
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of Default has occurred and is continuing or, if any Default or Event
of Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall (i) set forth in reasonable
detail the calculations required to establish whether the Borrower and
its Subsidiaries were in compliance with the provisions of Sections
3.03(d), 3.03(e), 9.02(iv), 9.03(iii), 9.04(iii), 9.04(vi), 9.04(xi),
9.05(vii) (in respect of Intercompany Loans outstanding to Wholly-Owned
Foreign Subsidiaries of the Borrower and to the Captive Insurance
Company and the License Subsidiary), 9.05(viii) (in respect of cash
capital contributions to the Captive Insurance Company and the License
Subsidiary), and 9.07 through 9.10, inclusive, at the end of such
fiscal quarter or year, as the case may be, and (ii) certify that there
have been no changes to Annexes C through F, and Annexes I through K,
in each case of the Security Agreement and Annexes A through F of the
Pledge Agreement, in each case since the Effective Date or, if later,
since the date of the most recent certificate delivered pursuant to
this Section 8.01(f), or if there have been any such changes, a list in
reasonable detail of such changes (but, in each case with respect to
this clause (iii), only to the extent that such changes are required to
be reported to the Collateral Agent pursuant to the terms of such
Security Documents).
(g) Notice of Default, Litigation and Material Adverse
Effect. Promptly, and in any event within three Business Days after any
officer of the Borrower obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of
Default, (ii) any litigation or governmental investigation (including,
without limitation, by the New York Insurance Department) or proceeding
pending against the Borrower or any of its Subsidiaries (x) which,
either individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect or (y) with respect to any Document,
or (iii) any other event, change or circumstance that has had, or could
reasonably be expected to have, a Material Adverse Effect.
(h) Other Reports and Filings. Promptly after the filing
or delivery thereof, copies of all financial information, proxy
materials and reports, if any, which the Borrower or any of its
Subsidiaries shall publicly file with the Securities and Exchange
Commission or any successor thereto (the "SEC") or deliver to holders
(or any trustee, agent or other representative therefor) of its
material Indebtedness (including the Senior Notes) pursuant to the
terms of the documentation governing such Indebtedness.
(i) Environmental Matters. Promptly after any officer of
the Borrower or any of its Subsidiaries obtains knowledge thereof,
notice of one or more of the following environmental matters to the
extent that such environmental matters, either individually or when
aggregated with all other such environmental matters, could reasonably
be expected to have a Material Adverse Effect:
(i) any pending or threatened Environmental
Claim against the Borrower or any of its Subsidiaries or any
Real Property owned, leased or operated by the Borrower or any
of its Subsidiaries;
(ii) any condition or occurrence on or arising
from any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries that (a) results in
noncompliance by the Borrower or any of its Subsidiaries with
any
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applicable Environmental Law or (b) could reasonably be
expected to form the basis of an Environmental Claim against
the Borrower or any of its Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real
Property owned, leased or operated by the Borrower or any of
its Subsidiaries that could reasonably be expected to cause
such Real Property to be subject to any restrictions on the
ownership, lease, occupancy, use or transferability by the
Borrower or any of its Subsidiaries of such Real Property
under any Environmental Law; and
(iv) the taking of any removal or remedial action
in response to the actual or alleged presence of any Hazardous
Material on any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency; provided that in any event the Borrower shall deliver
to each Lender all notices received by the Borrower or any of
its Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify the Borrower or
any of its Subsidiaries as potentially responsible parties for
remediation costs or which otherwise notify the Borrower or
any of its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto.
(j) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to the
Borrower or any of its Subsidiaries as the Administrative Agent or any
Lender may reasonably request.
8.02 Books, Records and Inspections; Annual Meetings. (a)
The Borrower will, and will cause each of its Subsidiaries to, keep proper books
of record and accounts in which full, true and correct entries in conformity
with (and to the extent required by) generally accepted accounting principles
and all applicable requirements of law shall be made in relation to its business
and activities. The Borrower will, and will cause each of its Subsidiaries to,
permit, upon reasonable notice to the Borrower, officers and designated
representatives of the Administrative Agent or the Required Lenders to visit and
inspect, under guidance of officers of the Borrower or such Subsidiary, any of
the properties of the Borrower or such Subsidiary, and to examine the books of
account of the Borrower or such Subsidiary and discuss the affairs, finances and
accounts of the Borrower or such Subsidiary with, and be advised as to the same
by, its and their officers and independent accountants, all upon reasonable
prior notice and at such reasonable times and intervals and to such reasonable
extent as the Administrative Agent or the Required Lenders may reasonably
request.
(b) At a date to be mutually agreed upon between the
Administrative Agent and the Borrower occurring on or prior to the 120th day
after the close of each fiscal year of the Borrower, the Borrower will, at the
request of the Administrative Agent, hold a meeting with all of the Lenders at
which meeting will be reviewed the financial results of the Borrower and its
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Subsidiaries for the previous fiscal year and the budgets presented for the
current fiscal year of the Borrower.
8.03 Maintenance of Property; Insurance. (a) The Borrower
will, and will cause each of its Subsidiaries to, (i) keep, in all material
respects, all material property necessary to the business of the Borrower and
its Subsidiaries in good working order and condition, ordinary wear and tear
excepted, (ii) maintain with financially sound and reputable third party
insurance companies insurance on all such property and against all such risks as
is consistent and in accordance with industry practice for companies similarly
situated owning similar properties and engaged in similar businesses as the
Borrower and its Subsidiaries, and (iii) furnish to the Administrative Agent,
upon its written request therefor, full information as to the insurance carried.
The provisions of this Section 8.03 shall be deemed supplemental to, but not
duplicative of, the provisions of any Security Documents that require the
maintenance of insurance.
(b) The Borrower will, and will cause each of its
Subsidiaries to, at all times keep its property insured in favor of the
Collateral Agent as loss payee and/or additional insured, as applicable, and all
policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by the Borrower and/or such
Subsidiaries) (i) shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee and/or additional insured, as applicable),
(ii) shall state that such insurance policies shall not be canceled without at
least 30 days' prior written notice thereof by the respective insurer to the
Collateral Agent, (iii) shall provide that the respective insurers irrevocably
waive any and all rights of subrogation with respect to the Collateral Agent and
the other Secured Creditors, and (iv) shall be deposited with the Collateral
Agent.
(c) If the Borrower or any of its Subsidiaries shall fail
to maintain insurance in accordance with this Section 8.03, or if the Borrower
or any of its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Administrative Agent shall have the right
(but shall be under no obligation) to procure such insurance and the Borrower
agrees to reimburse the Administrative Agent for all reasonable costs and
expenses of procuring such insurance.
8.04 Existence; Franchises. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its material
rights, franchises, licenses, permits, copyrights, trademarks and patents;
provided, however, that nothing in this Section 8.04 shall prevent (i) sales of
assets and other transactions by the Borrower or any of its Subsidiaries in
accordance with Section 9.02 or (ii) the withdrawal by the Borrower or any of
its Subsidiaries of its qualification as a foreign corporation, partnership or
limited liability company, as the case may be, in any jurisdiction if such
withdrawal could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
8.05 Compliance with Statutes, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliances as
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could not, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
8.06 Compliance with Environmental Laws. (a) The Borrower
will, and will cause each of its Subsidiaries to, comply with all Environmental
Laws and permits applicable to, or required by, the ownership, lease or use of
its Real Property now or hereafter owned, leased or operated by the Borrower or
any of its Subsidiaries, except such noncompliances as could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws. Neither the Borrower nor any of its Subsidiaries will
generate, use, treat, store, Release or dispose of, or permit the generation,
use, treatment, storage, Release or disposal of Hazardous Materials on any Real
Property now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, except for Hazardous Materials
generated, used, treated, stored, Released or disposed of at any such Real
Properties in compliance in all material respects with all applicable
Environmental Laws and as required in connection with the normal operation, use
and maintenance of the business or operations of the Borrower or any of its
Subsidiaries.
(b) (i) After the receipt by the Administrative Agent or
any Lender of any notice of the type described in Section 8.01(i), (ii) at any
time that the Borrower or any of its Subsidiaries are not in compliance with
Section 8.06(a) or (iii) in the event that the Administrative Agent or the
Lenders have exercised any of the remedies pursuant to the last paragraph of
Section 10, the Borrower will (in each case) provide, at the sole expense of the
Borrower and at the request of the Administrative Agent, an environmental site
assessment report concerning any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries, prepared by an environmental consulting
firm reasonably approved by the Administrative Agent, indicating the presence or
absence of Hazardous Materials and the potential cost of any removal or remedial
action in connection with such Hazardous Materials on such Real Property. If the
Borrower fails to provide the same within 30 days after such request was made,
the Administrative Agent may order the same, the cost of which shall be borne by
the Borrower, and the Borrower shall grant and hereby grants to the
Administrative Agent and the Lenders and their respective agents access to such
Real Property and specifically grant the Administrative Agent and the Lenders an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment at any reasonable time upon reasonable notice to
the Borrower, all at the sole expense of the Borrower.
8.07 ERISA. As soon as possible and, in any event, within
fifteen (15) Business Days after the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate knows of the occurrence of any of the following to the
extent that same, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, the Borrower will deliver to each of
the Lenders a certificate of an Authorized Financial Officer of the Borrower
setting forth the full details as to such occurrence and the action, if any,
that the Borrower, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given or
filed by the Borrower, such Subsidiary, the Plan administrator or such ERISA
Affiliate to or with the PBGC or any other governmental agency
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and any notices received by the Borrower, such Subsidiary or such ERISA
Affiliate from the PBGC or any other government agency with respect thereto:
that a Reportable Event has occurred (except to the extent that the Borrower has
previously delivered to the Lenders a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title
IV of ERISA is subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event
described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation
Section 4043 is reasonably expected to occur with respect to such Plan within
the following 30 days; that an accumulated funding deficiency, within the
meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or
an application may be or has been made for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current
Liability; that proceedings have been or are reasonably expected to be
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or is
reasonably likely to incur any liability to or on account of the termination of
or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or
4980 of the Code or Section 409, 502(i) or 502(l) of ERISA or with respect to a
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) under Section 4980B of the Code; or that the Borrower or any
Subsidiary of the Borrower may incur any liability for retiree benefits pursuant
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by the severance pay Plans of the Borrower or any of its Subsidiaries
or Section 601 of ERISA) or any Plan or any Foreign Pension Plan. In addition,
the Borrower will deliver to each of the Lenders copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA. At the request of any Lender, the
Borrower will also deliver to such Lender a complete copy of the annual report
(on Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service. In addition to any certificates
or notices delivered to the Lenders pursuant to the first sentence hereof,
copies of annual reports and any records, documents or other information
required to be furnished to the PBGC, and any material notices received by the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with respect to
any Plan or Foreign Pension Plan or received from any governmental agency or
plan administrator or sponsor or trustee with respect to any multiemployer plan
(as defined in Section 4001(a)(3) of ERISA), shall be delivered to the Lenders
no later than ten (10) days after the date such records, documents and/or
information has been furnished to the PBGC or any other governmental agency or
such notice has been received by the Borrower, the respective Subsidiary or the
ERISA Affiliate, as applicable. The Borrower will ensure, and cause each of its
applicable Subsidiaries to ensure, that all Foreign Pension
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Plans administered by it or into which it makes payments obtains or retains (as
applicable) registered status under and as required by applicable law and is
administered in a timely manner in all respects in compliance with all
applicable laws except where the failure to do any of the foregoing could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower
will cause (i) each of its, and each of its Subsidiaries', fiscal years to end
on December 31 of each year and (ii) each of its, and each of its Subsidiaries',
fiscal quarters to end on March 31, June 30, September 30 and December 31, of
each fiscal year.
8.09 Performance of Obligations. The Borrower will, and
will cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement, loan agreement or credit
agreement and each other agreement, contract or instrument by which it is bound,
except such non-performances as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.10 Payment of Taxes. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims which, if unpaid, might become a Lien or
charge upon any properties of the Borrower or any of its Subsidiaries not
otherwise permitted under Section 9.01(i); provided that neither the Borrower
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with generally accepted accounting principles.
8.11 Use of Proceeds. The Borrower will use the proceeds
of the Loans only as provided in Section 7.08.
8.12 Additional Security; Further Assurances; etc. (a) The
Borrower will, and will cause each of the other Credit Parties to, grant to the
Collateral Agent for the benefit of the Secured Creditors security interests in
such assets and properties (leased or owned) of the Borrower and the other
Credit Parties as are not covered by the original Security Documents and as may
be reasonably requested from time to time by the Administrative Agent or the
Required Lenders (collectively, the "Additional Security Documents"). All such
security interests shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable perfected security interests superior to and
prior to the rights of all third Persons and subject to no other Liens except
for Permitted Liens. The Additional Security Documents 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 Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall be paid in full.
(b) The Borrower will, and will cause each of the other
Credit Parties to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the
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Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require pursuant to this Section 8.12. Additionally, upon the request
of the Collateral Agent or the Required Lenders, the Borrower will take, or
cause to be taken, such action as may be requested in order to perfect (or
maintain the perfection of) the security interests (or take any analogous
actions under the applicable provisions of local law in order to protect such
security interests) in any Collateral located outside the U.S. owned by the
Borrower or the other Credit Parties, in each case to the extent such actions
are permitted to be taken under the laws of the applicable jurisdictions.
Furthermore, the Borrower will cause to be delivered to the Collateral Agent
such opinions of counsel, title insurance, flood certifications and other
related documents as may be reasonably requested by the Collateral Agent to
assure itself that this Section 8.12 has been complied with.
(c) The Borrower agrees to cause each other Credit Party
established or created in accordance with Section 9.15 or acquired pursuant to
Section 8.16, within 10 Business Days after any such establishment, creation or
acquisition, to execute and deliver a counterpart of a Joinder Agreement
pursuant to which such Credit Party shall become a party to the Subsidiaries
Guaranty, the Pledge Agreement and the Security Agreement.
(d) Except as otherwise provided in clause (c) of this
Section 8.12, the Borrower agrees that each action required above by this
Section 8.12 shall be completed as soon as reasonably practicable, but in no
event later than 30 days after such action is requested to be taken by the
Administrative Agent, the Collateral Agent or the Required Lenders.
8.13 Foreign Subsidiaries Security. If following a change
in the relevant sections of the Code or the regulations, rules, rulings, notices
or other official pronouncements issued or promulgated thereunder, counsel for
the Borrower reasonably acceptable to the Administrative Agent does not within
30 days after a request from the Administrative Agent or the Required Lenders
deliver to the Administrative Agent evidence, in form and substance reasonably
satisfactory to the Administrative Agent, with respect to any Foreign Subsidiary
which has not already had all of its stock pledged pursuant to the Pledge
Agreement that (i) a pledge of 66 2/3% or more of the total combined voting
power of all classes of capital stock of such Foreign Subsidiary entitled to
vote or, in the case of a Foreign Subsidiary whose capital stock is held by
another Foreign Subsidiary, a pledge of any of the capital stock of such Foreign
Subsidiary, (ii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement, (iii) the
entering into by such Foreign Subsidiary of a pledge agreement in substantially
the form of the Pledge Agreement and (iv) the entering into by such Foreign
Subsidiary of a guaranty in substantially the form of the Subsidiaries Guaranty,
in any such case would cause (I) the undistributed earnings of such Foreign
Subsidiary (or such Foreign Subsidiary's parent or indirect parent to the extent
that such parent is also a Foreign Subsidiary) as determined for U.S. federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for federal income tax purposes or (II) other
material adverse U.S. federal income tax consequences to the Credit Parties,
then in the case of a failure to deliver the evidence described in clause (i)
above, that portion of such Foreign Subsidiary's outstanding capital stock not
theretofore pledged
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pursuant to the Pledge Agreement shall be pledged to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Pledge Agreement (or
another pledge agreement in substantially similar form, if needed), and in the
case of a failure to deliver the evidence described in clause (ii) or (iii)
above, such Foreign Subsidiary shall execute and deliver the Security Agreement
(or another security agreement in substantially similar form, if needed) or the
Pledge Agreement (or another pledge agreement in substantially similar form, if
needed), as the case may be, granting to the Collateral Agent for the benefit of
the Secured Creditors a security interest in all of such Foreign Subsidiary's
assets or the equity interests and promissory notes owned by such Foreign
Subsidiary, as the case may be, and securing the Obligations of the Borrower
under the Credit Documents and under any Interest Rate Protection Agreement and,
in the event the Subsidiaries Guaranty shall have been executed by such Foreign
Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the
case of a failure to deliver the evidence described in clause (iv) above, such
Foreign Subsidiary shall execute and deliver the Subsidiaries Guaranty (or
another guaranty in substantially similar form, if needed), guaranteeing the
Obligations of the Borrower under the Credit Documents and under any Interest
Rate Protection Agreement, in each case to the extent that the entering into of
such Security Agreement, Pledge Agreement or Subsidiaries Guaranty (or
substantially similar document) is permitted by the laws of the respective
foreign jurisdiction and with all documents delivered pursuant to this Section
8.13 to be in form and substance reasonably satisfactory to the Administrative
Agent and the Required Lenders.
8.14 Ownership of Subsidiaries; etc. Except as otherwise
permitted by Section 9.05(xiii) and the definition of "Permitted Acquisition",
the Borrower will, and will cause each of its Subsidiaries to, own 100% of the
capital stock and other equity interests of each of their Subsidiaries (other
than, in the case of Foreign Subsidiaries, directors' qualifying shares and
other nominal amounts held by local nationals, in each case to the extent
required by applicable law).
8.15 Maintenance of Corporate Separateness. The Borrower
will, and will cause each of its Subsidiaries to, satisfy in all material
respects customary corporate formalities, including the holding of regular board
of directors' and shareholders' meetings or action by directors or shareholders
without a meeting and the maintenance of corporate offices and records. Neither
the Borrower nor any of its Subsidiaries shall take any action, or conduct its
affairs in a manner, which is likely to result in the corporate existence of the
Borrower or any of its Subsidiaries being ignored, or in the assets and
liabilities of the Borrower or any of its Subsidiaries being substantively
consolidated with those of any other such Person in a bankruptcy, reorganization
or other insolvency proceeding.
8.16 Permitted Acquisitions. (a) Subject to the provisions
of this Section 8.16 and the requirements contained in the definition of
Permitted Acquisition, the Borrower and the Subsidiary Guarantors that are
Wholly-Owned Domestic Subsidiaries may from time to time effect Permitted
Acquisitions, so long as (in each case except to the extent the Required Lenders
otherwise specifically agree in writing in the case of a specific Permitted
Acquisition): (i) no Default or Event of Default shall have occurred and be
continuing at the time of the consummation of the proposed Permitted Acquisition
or immediately after giving effect thereto; (ii) the Borrower shall have given
to the Administrative Agent and the Lenders at least 10 Business Days' (or such
shorter period of time as may be reasonably acceptable to the
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Administrative Agent) prior written notice of any Permitted Acquisition, which
notice shall describe in reasonable detail the principal terms and conditions of
such Permitted Acquisition; (iii) the Borrower shall have provided to the
Administrative Agent and the Lenders as soon as available but not later than
five Business Days (or such shorter period of time as may be reasonably
acceptable to the Administrative Agent) after the execution thereof, a copy of
any executed purchase agreement or similar agreement (and the exhibits and
schedules thereto) with respect to each such Permitted Acquisition; (iv) the
Lenders shall have received (x) in the case of a proposed Permitted Acquisition
in which the aggregate Maximum Permitted Consideration is at least $20,000,000,
audited year end financial statements for at least the previous fiscal year and,
to the extent available, interim unaudited quarterly financial statements for
the then current fiscal year of the Acquired Entity or Business being acquired
pursuant to such proposed Permitted Acquisition and (y) in the case of each
proposed Permitted Acquisition, a pro forma consolidated balance sheet of the
Borrower and its Subsidiaries as of the last day of the most recently ended
fiscal quarter of the Borrower and a pro forma consolidated statement of income
of the Borrower and its Subsidiaries for the most recently ended four fiscal
quarter period, in each case on a Pro Forma Basis after giving effect to such
proposed Permitted Acquisition; (v) calculations are made by the Borrower
showing compliance with the financial covenants contained in Sections 9.08
through 9.10, inclusive, for the respective Calculation Period on a Pro Forma
Basis as if the respective Permitted Acquisition (as well as all other Permitted
Acquisitions theretofore consummated after the first day of such Calculation
Period) had occurred on the first day of such Calculation Period, and such
recalculations shall show that (x) such financial covenants would have been
complied with if the respective Permitted Acquisition had occurred on the first
day of such Calculation Period and (y) in the case of any Permitted Acquisition
consummated before December 31, 2005 and in which the Maximum Permitted
Consideration is greater than $10,000,000, the Total Leverage Ratio shall be
less than or equal to 3.60:1.00; (vi) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of the respective Permitted
Acquisition (both before and after giving effect thereto), 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; (vii) the Maximum Permitted Consideration for the respective Permitted
Acquisition, when added to the aggregate Maximum Permitted Consideration paid
for all other Permitted Acquisitions consummated during such fiscal year (or, to
the extent provided in the definition of Permitted Acquisition Basket Amount,
during the respective period), does not exceed the Permitted Acquisition Basket
Amount for such fiscal year (or period, as the case may be); (viii) after giving
effect to such proposed Permitted Acquisition and the payment of all amounts
(including fees and expenses) owing in connection therewith, the Total
Unutilized Revolving Loan Commitment shall equal or exceed the sum of (x)
$15,000,000 plus (y) an amount equal to the aggregate amount reasonably likely
to be payable in respect of all post-closing purchase price adjustments required
or which will be required in connection with such Permitted Acquisition (and all
other Permitted Acquisitions for which such purchase price adjustments may be
required to be made) as determined by the Borrower in good faith; and (ix) the
Borrower shall have delivered to the Administrative Agent and each Lender a
certificate executed by an Authorized Financial Officer of the Borrower,
certifying to the best of such officer's knowledge, compliance with the
requirements of preceding clauses (i) through (viii),
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inclusive, and containing the calculations (in reasonable detail) required by
preceding clauses (v), (vi) and (viii).
(b) At the time of each Permitted Acquisition involving
the creation or acquisition of a Subsidiary, or the acquisition of capital stock
or other equity interest of any Person, the capital stock or other equity
interests thereof created or acquired in connection with such Permitted
Acquisition shall be pledged for the benefit of the Secured Creditors pursuant
to (and to the extent required by) the Pledge Agreement.
(c) The Borrower will cause each Subsidiary which is
formed to effect, or is acquired pursuant to, a Permitted Acquisition to comply
with, and to execute and deliver all of the documentation as and to the extent
required by, Sections 8.12 and 9.15, to the reasonable satisfaction of the
Administrative Agent.
(d) The consummation of each Permitted Acquisition shall
be deemed to be a representation and warranty by the Borrower that the
certifications pursuant to this Section 8.16 are true and correct and that all
conditions thereto have been satisfied and that same is permitted in accordance
with the terms of this Agreement, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 7 and 10.
8.17 Cash on Hand at the Captive Insurance Company and the
License Subsidiary. (a) If at any time the Captive Insurance Company holds cash
or Cash Equivalents in excess of $2,000,000 in the aggregate for a period of
more than five consecutive Business Days, the Borrower will cause the Captive
Insurance Company to immediately pay a cash Dividend up to the Borrower in an
amount equal to such excess.
(b) If at any time the License Subsidiary (to the extent
that it is a Subsidiary of the Captive Insurance Company) holds cash or Cash
Equivalents in excess of $500,000 in the aggregate for a period of more than
five consecutive Business Days, the Borrower will cause the License Subsidiary
to immediately pay a cash Dividend up to the Borrower in an amount equal to such
excess.
8.18 Existing Senior Notes Redemption. The Borrower will,
on the Existing Senior Notes Redemption Date, cause the Existing Senior Notes
Redemption to occur and the Existing Senior Notes Indenture to be satisfied and
discharged in accordance with the terms of Section 8.01 thereof.
SECTION 9. Negative Covenants. The Borrower hereby covenants
and agrees that on and after the Effective Date and until the Total Revolving
Loan Commitment and all Letters of Credit have terminated and the Loans, Notes
and Unpaid Drawings (in each case, together with interest thereon), Fees and all
other Obligations (other than any indemnities described in Section 13.13 which
are not then due and payable) incurred hereunder and thereunder, are paid in
full:
9.01 Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now
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owned or hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to the Borrower
or any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 9.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the
Borrower or any of its Subsidiaries 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 and
mechanics' liens and other similar Liens arising in the ordinary course
of business, and (x) which do not in the aggregate materially detract
from the value of the Borrowers' or such Subsidiary's property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or such Subsidiary or (y) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, in Schedule X, but
only to the respective date, if any, set forth in such Schedule X for
the removal, replacement and termination of any such Liens without
giving effect to any renewals, replacements and extensions thereof;
(iv) Liens created pursuant to the Security Documents;
(v) licenses, sublicenses, leases or subleases granted to
other Persons not materially interfering with the conduct of the
business of the Borrower and its Subsidiaries taken as a whole;
(vi) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Section 9.04(iii),
provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y)
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrower or any
Subsidiary of the Borrower;
(vii) Liens placed upon equipment or machinery acquired
after the Effective Date and used in the ordinary course of business of
the Borrower or any of its Subsidiaries and placed at the time of the
acquisition thereof by the Borrower or such Subsidiary or within 90
days thereafter to secure Indebtedness incurred to pay all or a portion
of the purchase price thereof or to secure Indebtedness incurred solely
for the purpose of financing the acquisition of any such equipment or
machinery or extensions,
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renewals or replacements of any of the foregoing for the same or a
lesser amount, provided that (x) the Indebtedness secured by such Liens
is permitted by Section 9.04(iii) and (y) in all events, the Lien
encumbering the equipment or machinery so acquired does not encumber
any other asset of the Borrower or any Subsidiary of the Borrower;
(viii) easements, rights-of-way, restrictions, encroachments
and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing Indebtedness and not materially
interfering with the ordinary conduct of the business of the Borrower
or any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing
statement filings regarding operating leases entered into in the
ordinary course of business;
(x) Liens arising out of the existence of judgments or
awards in respect of which the Borrower or any of its Subsidiaries
shall in good faith be prosecuting an appeal or proceedings for review
and in respect of which there shall have been secured a subsisting stay
of execution pending such appeal or proceedings, provided that the
aggregate amount of all cash (including the stated amount of all
letters of credit supporting such judgments or awards) and the fair
market value of all other property subject to such Liens does not
exceed $5,000,000 at any time outstanding;
(xi) statutory and common law landlords' liens under
leases to which the Borrower or any of its Subsidiaries is a party;
(xii) Liens (other than Liens imposed under ERISA) incurred
in the ordinary course of business in connection with workers'
compensation claims, unemployment insurance and social security
benefits and Liens securing the performance of bids, tenders, leases
and contracts in the ordinary course of business, statutory
obligations, surety bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business and consistent
with past practice (exclusive of appeal bonds and obligations in
respect of the payment for borrowed money);
(xiii) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of the
Borrower in existence at the time such Subsidiary is acquired pursuant
to a Permitted Acquisition, provided that (x) any Indebtedness that is
secured by such Liens is permitted to exist under Section 9.04(vi), and
(y) such Liens are not incurred in connection with, or in contemplation
or anticipation of, such Permitted Acquisition and do not attach to any
other asset of the Borrower or any of its Subsidiaries;
(xiv) Liens on property or assets acquired pursuant to a
Permitted Acquisition (other than the capital stock of any Subsidiary
of the Borrower) securing any Seller Financing incurred by the Borrower
or a Subsidiary Guarantor to finance (in whole or in part) the
respective Permitted Acquisition, provided that (x) such Liens only
serve to secure the Seller Financing incurred as part of such Permitted
Acquisition, (y) any Seller Financing that is secured by such Liens is
permitted to exist under Section 9.04(iii), and
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(z) such Liens do not attach to any other asset of the Borrower or any
of its Subsidiaries; and
(xv) Liens not otherwise permitted pursuant to this
Section 9.01 which secure obligations permitted under this Agreement
(other than Indebtedness for, or in respect of, borrowed money or for
the deferred purchase price of a Permitted Acquisition or an
Investment) not exceeding $500,000 in the aggregate at any time
outstanding and which apply to property and/or assets with an aggregate
fair market value (as determined by the Borrower in good faith) not to
exceed at any time the amount referenced above in this clause (xv).
In connection with the granting of Liens of the type described in clauses (vi),
(vii), (xiii) and (xiv) of this Section 9.01 by the Borrower of any of its
Subsidiaries, the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate by it in connection therewith
(including, without limitation, by executing appropriate lien releases or lien
subordination agreements in favor of the holder or holders of such Liens, in
either case solely with respect to the item or items of equipment or other
assets subject to such Liens).
9.02 Consolidation, Merger, Purchase or Sale of Assets,
etc. The Borrower will not, and will not permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any partnership, joint
venture, or transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of all or any part of its property or assets, or enter into
any sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials, equipment and
intellectual property in the ordinary course of business) of any Person (or
agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures by the Borrower and its
Subsidiaries shall be permitted to the extent not in violation of
Section 9.07;
(ii) each of the Borrower and its Subsidiaries may make
sales of inventory in the ordinary course of business;
(iii) Investments may be made to the extent permitted by
Section 9.05;
(iv) the Borrower and its Subsidiaries may consummate the
Swiss Clubs Sale and may sell other assets (including the capital stock
or other equity interests of any Subsidiary but otherwise subject to
the proviso to this clause (iv) in the case of a Subsidiary Guarantor),
so long as (v) no Default or Event of Default then exists or would
result therefrom, (w) each such sale is in an arm's-length transaction
and the Borrower or the respective Subsidiary receives at least fair
market value (as determined in good faith by the Borrower or such
Subsidiary, as the case may be), (x) the consideration received by the
Borrower or such Subsidiary consists of at least 75% cash and is paid
at the time of the closing of such sale, (y) the Net Sale Proceeds
therefrom are applied and/or reinvested as (and to the extent) required
by Section 3.03(d) and (z) the aggregate amount of the proceeds
received from all assets sold pursuant to this clause (iv) (exclusive
of any proceeds received from the Swiss Clubs Sale) shall not exceed
$10,000,000 in any fiscal
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year of the Borrower, provided that the sale of the capital stock or
other equity interests of any Subsidiary Guarantor shall not be
permitted pursuant to this clause (iv) unless such sale is for all of
the outstanding capital stock or other equity interests of such
Subsidiary Guarantor;
(v) each of the Borrower and its Subsidiaries may lease
(as lessee) or license (as licensee) real or personal property (so long
as any such lease or license does not create a Capitalized Lease
Obligation except to the extent permitted by Section 9.04(iii));
(vi) each of the Borrower and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection
thereof and not as part of any financing transaction;
(vii) each of the Borrower and its Subsidiaries may grant
licenses, sublicenses, leases or subleases to other Persons not
materially interfering with the conduct of the business of the Borrower
and its Subsidiaries taken as a whole, in each case so long as no such
grant otherwise affects the Collateral Agent's security interest in the
asset or property subject thereto;
(viii) any Subsidiary of the Borrower (other than the
Captive Insurance Company and the License Subsidiary) may merge with
and into, or be dissolved or liquidated into, the Borrower or any
Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary
Guarantor so long as (i) in the case of any such merger, dissolution or
liquidation involving the Borrower, the Borrower is the surviving
corporation of any such merger, dissolution or liquidation, (ii) in all
other cases, a Wholly-Owned Domestic Subsidiary which is a Subsidiary
Guarantor is the surviving corporation of any such merger, dissolution
or liquidation, and (iii) in all cases, the security interests granted
to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in the assets of such Subsidiary
shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such merger, dissolution
or liquidation);
(ix) Permitted Acquisitions may be made to the extent
permitted by Section 8.16;
(x) the Borrower and its Subsidiaries may sell or
exchange specific items of equipment (including pursuant to trade
up/trade in transactions), so long as the purpose of each such sale or
exchange is to acquire (and results within 90 days of such sale or
exchange in the acquisition of) replacement items of equipment which
are the functional equivalent of the item of equipment so sold or
exchanged;
(xi) (A) the Borrower may transfer assets to any
Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary
Guarantor (other than the Captive Insurance Company and the License
Subsidiary) and any Subsidiary of the Borrower may transfer assets to
the Borrower or to any Wholly-Owned Domestic Subsidiary of the Borrower
which is a Subsidiary Guarantor (other than the Captive Insurance
Company
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and the License Subsidiary) and (B) the Borrower and its Subsidiaries
may transfer intellectual property to the License Subsidiary, in each
case so long as the security interests granted to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the Security
Documents in the assets so transferred shall remain in full force and
effect and perfected (to at least the same extent as in effect
immediately prior to such transfer); and
(xii) the Borrower and its Subsidiaries may, in the
ordinary course of business, sell, transfer or otherwise dispose of
patents, trademarks, service marks, trade names and copyrights which,
in the reasonable judgment of the Borrower or such Subsidiary, are
determined to be uneconomical, negligible or obsolete in the conduct of
its business.
To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02 (other than to the Borrower or a Subsidiary
thereof), such Collateral shall be sold free and clear of the Liens created by
the Security Documents, and the Administrative Agent and the Collateral Agent
shall be authorized to take any actions deemed appropriate in order to effect
the foregoing.
9.03 Dividends. The Borrower will not, and will not permit
any of its Subsidiaries to, authorize, declare or pay any Dividends with respect
to the Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends
to the Borrower or to any Wholly-Owned Domestic Subsidiary of the
Borrower and any Foreign Subsidiary of the Borrower also may pay cash
Dividends to any Wholly-Owned Foreign Subsidiary of the Borrower;
(ii) any non-Wholly-Owned Subsidiary of the Borrower may
pay cash Dividends to its shareholders generally so long as the
Borrower or its respective Subsidiary which owns the equity interest in
the Subsidiary paying such Dividends receives at least its
proportionate share thereof (based upon its relative holding of the
equity interest in the Subsidiary paying such Dividends and taking into
account the relative preferences, if any, of the various classes of
equity interests of such Subsidiary);
(iii) the Borrower may redeem or repurchase outstanding
shares of its common stock (or options to purchase such common stock)
following the death, disability, retirement or termination of
employment of officers, directors or employees of the Borrower or any
of its Subsidiaries, provided that (x) the only consideration paid by
the Borrower in respect of such redemptions or repurchases shall be
cash, (y) the aggregate amount paid by the Borrower in respect of all
such redemptions or repurchases shall not exceed (I) $750,000 in any
fiscal year of the Borrower plus (II) the aggregate amount of cash
proceeds received by the Borrower in connection with the issuance of
its common stock to officers, directors or employees of the Borrower
and its Subsidiaries after the Effective Date plus (III) any cash
proceeds received from key man life insurance policies obtained solely
for the purpose of making such redemptions or repurchases and (z) at
the time of any redemption or repurchase permitted to be made pursuant
to this Section 9.03(iii), no Default or Event of Default shall then
exist or result therefrom;
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(iv) the Borrower may pay regularly scheduled Dividends on
its Qualified Preferred Stock pursuant to the terms thereof solely
through the issuance of additional shares of such Qualified Preferred
Stock rather than in cash; and
(v) the Senior Preferred Stock Repurchase shall be
permitted as part of the Transaction.
9.04 Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Indebtedness of the Borrower under Interest Rate
Protection Agreements entered into with respect to other Indebtedness
permitted under this Section 9.04 so long as the entering into of such
Interest Rate Protection Agreements are bona fide hedging activities
and are not for speculative purposes;
(iii) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations (to the extent permitted
pursuant to Section 9.07), purchase money Indebtedness described in
Section 9.01(vii) and Seller Financing, provided that in no event shall
the sum of the aggregate principal amount of all Capitalized Lease
Obligations, purchase money Indebtedness and Seller Financing permitted
by this clause (iii) exceed $20,000,000 at any time outstanding;
(iv) (A) unsecured Indebtedness of the Credit Parties
under the Senior Note Documents in an initial aggregate principal
amount not to exceed $255,000,000 (less the amount of any repayments of
principal thereof made after the Effective Date) and (B) additional
unsecured Indebtedness of the Credit Parties under the Senior Note
Documents (the "Additional Senior Note Indebtedness") in an aggregate
principal amount not to exceed $50,000,000 (less the amount of any
repayments of principal thereof made after the issuance thereof), so
long as (I) no Default or Event of Default is in existence immediately
prior to, or would result from, the issuance of such Additional Senior
Note Indebtedness, (II) calculations are made by the Borrower with
respect to the financial covenants contained in Sections 9.08 through
9.10, inclusive, for the respective Calculation Period on a Pro Forma
Basis as if the issuance of such Additional Senior Note Indebtedness
had occurred on the first day of such Calculation Period, and such
calculations shall show that such financial covenants would have been
complied with if the issuance of such Additional Senior Note
Indebtedness had occurred on the first day of such Calculation Period,
(III) such Additional Senior Note Indebtedness is permitted to be
incurred under, and in accordance with, the Senior Note Documents, (IV)
100% of the Net Debt Proceeds received from the issuance of such
Additional Senior Note Indebtedness are used to (x) finance Permitted
Acquisitions and to pay any fees and expenses incurred in connection
therewith and/or (y) to voluntarily prepay Revolving Loans in
accordance with Section 4.01(a) and (V) prior to the issuance of such
Additional Senior Note Indebtedness, the Borrower shall have delivered
to the Administrative Agent an officer's certificate executed by an
Authorized Financial Officer of the Borrower,
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certifying that the preceding clauses (I) through (IV) have been, or
will be, complied with, and containing the calculations (in reasonable
detail) required by the preceding clauses (II) and (III);
(v) Existing Indebtedness outstanding on the Effective
Date and listed on Schedule VII (as reduced by any repayments thereof
on or after the Effective Date), without giving effect to any
subsequent extension, renewal or refinancing thereof (provided that the
Existing Senior Notes shall only be permitted to remain outstanding
through the Existing Senior Notes Redemption Date);
(vi) Indebtedness of a Subsidiary of the Borrower acquired
pursuant to a Permitted Acquisition or Indebtedness assumed at the time
of a Permitted Acquisition involving the purchase of an asset or assets
securing such Indebtedness) (such Indebtedness, in either case,
"Permitted Acquired Debt"), provided that (x) such Indebtedness was not
incurred in connection with, or in anticipation or contemplation of,
such Permitted Acquisition and (y) the aggregate principal amount of
all Indebtedness permitted by this clause (vi) shall not exceed
$10,000,000 at any one time outstanding;
(vii) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Sections 9.05(vii) and (xiii);
(viii) Indebtedness consisting of guaranties by the Borrower
of lease obligations of Wholly-Owned Subsidiaries of the Borrower;
(ix) Contingent Obligations of the Borrower or any
Subsidiary Guarantor with respect to Indebtedness and lease obligations
of the Borrower or any Subsidiary Guarantor otherwise permitted under
this Agreement;
(x) Indebtedness of the Borrower or any of its
Subsidiaries under any foreign exchange contracts or currency swap
agreements constituting Other Hedging Agreements entered into in
connection with the Borrower's or any of its Subsidiaries foreign
operations so long as entering into of such Other Hedging Agreements
are bona fide hedging activities and are not for speculative purposes;
and
(xi) so long as no Default or Event of Default then exists
or would result therefrom, additional Indebtedness of the Borrower and
its Subsidiaries not to exceed $7,500,000 in aggregate principal amount
at any time outstanding, which Indebtedness shall be unsecured unless
otherwise permitted under Section 9.01(xv).
9.05 Advances, Investments and Loans. The Borrower will
not, and will not permit any of its Subsidiaries to, 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, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
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(i) the Borrower and its Subsidiaries may 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 trade terms of the Borrower or such
Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and
hold cash and Cash Equivalents, provided that during any time that
Revolving Loans or Swingline Loans are outstanding, the aggregate
amount of cash and Cash Equivalents permitted to be held by the
Borrower and its Subsidiaries shall not exceed (x) $25,000,000 for any
period of five consecutive Business Days during the Borrower's fiscal
year ending December 31, 2003 or (y) $15,000,000 for any period of five
consecutive Business Days during any fiscal year thereafter;
(iii) the Borrower and its Subsidiaries may hold the
Investments held by them on the Effective Date and described on
Schedule XI, provided that any additional Investments made with respect
thereto shall be permitted only if permitted under the other provisions
of this Section 9.05;
(iv) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in good
faith settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and
advances to their officers and employees for moving, relocation and
travel expenses and other similar expenditures, in each case in the
ordinary course of business in an aggregate amount not to exceed
$200,000 at any time (determined without regard to any write-downs or
write-offs of such loans and advances);
(vi) the Borrower may enter into Interest Rate Protection
Agreements to the extent permitted by Section 9.04(ii);
(vii) (A) the Borrower and the Subsidiary Guarantors that
are Wholly-Owned Domestic Subsidiaries may make intercompany loans and
advances (I) between and among one another and (II) to Wholly-Owned
Foreign Subsidiaries of the Borrower in an aggregate amount not to
exceed $3,000,000 at any time (determined without regard to any
write-downs or write-offs of such loans and advances) and (B)
Wholly-Owned Foreign Subsidiaries of the Borrower may make intercompany
loans and advances between and among one another (all such intercompany
loans and advances referred to in preceding clauses (A) and (B),
collectively, the "Intercompany Loans"), so long as (x) any note held
by a Credit Party and evidencing any such Intercompany Loan is pledged
to the Collateral Agent pursuant to, and to the extent required by, the
Pledge Agreement, (y) the aggregate outstanding principal amount of all
Intercompany Loans made pursuant to this clause (vii) to the Captive
Insurance Company and the License Subsidiary, when added to the
aggregate amount of all capital contributions made to such Credit
Parties pursuant to clause (viii) of this Section 9.05, shall not
exceed $2,500,000 at any time outstanding (determined without regard to
any write-downs or write-offs of any such
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Investments) and no such Intercompany Loans may be made at a time when
a Default or an Event of Default exists, and (z) any Intercompany Loans
made by the Captive Insurance Company or the License Subsidiary to any
other Credit Party shall be subject to the subordination provisions set
forth in Exhibit M;
(viii) the Borrower and the Subsidiary Guarantors that are
Wholly-Owned Domestic Subsidiaries may make capital contributions to
their respective Subsidiaries that are also Subsidiary Guarantors that
are Wholly-Owned Domestic Subsidiaries, provided that (i) the aggregate
amount of all capital contributions made to the Captive Insurance
Company and the License Subsidiary pursuant to this clause (viii), when
added to the aggregate outstanding principal amount of all Intercompany
Loans made to such Credit Parties pursuant to clause (vii) of this
Section 9.05, shall not exceed $2,500,000 at any time outstanding
(determined without regard to any write-downs or write-offs of any such
Investments), and (ii) no such Investments may be made to the Captive
Insurance Company or the License Subsidiary pursuant to this clause
(viii) at a time when a Default or an Event of Default exists;
(ix) Permitted Acquisitions shall be permitted in
accordance with Section 8.16;
(x) the Borrower and its Subsidiaries may acquire and
hold non-cash consideration received from Asset Sales to the extent
permitted pursuant to Section 9.02(iv);
(xi) the Borrower may acquire and hold obligations of one
or more officers, directors or employees of the Borrower or any of its
Subsidiaries in connection with such officers', directors' or
employees' acquisition of shares of capital stock of the Borrower so
long as no cash is paid by the Borrower or any of its Subsidiaries to
such officers, directors or employees in connection with the
acquisition of any such obligations;
(xii) the Borrower and its Subsidiaries may enter into
Other Hedging Agreements to the extent permitted by Section 9.04(x);
and
(xiii) the Borrower and its Subsidiaries may make
Investments not otherwise permitted by this Section 9.05 in an
aggregate amount not to exceed $10,000,000 (determined without regard
to any write-downs or write-offs thereof), net of cash payments of
principal in the case of loans and cash equity returns (whether as a
dividend or redemption) in the case of equity investments.
9.06 Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions with any Affiliate of the Borrower or any of its
Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted:
(i) Dividends may be paid to the extent provided in
Section 9.03;
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(ii) loans may be made and repaid and other transactions
may be entered into by the Borrower and its Subsidiaries to the extent
permitted by Sections 9.02, 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors
of the Borrower and its Subsidiaries;
(iv) the Borrower and its Subsidiaries may enter into, and
may make payments under, employment agreements, employee benefits
plans, stock option plans, indemnification provisions and other similar
compensatory arrangements (including arrangements made with respect to
bonuses) with officers, employees and directors of the Borrower and its
Subsidiaries in the ordinary course of business;
(v) so long as no Default or Event of Default shall
exist, the Borrower may pay management fees to BRS and its Affiliates
in any fiscal year in an aggregate for all such Persons taken together
not to exceed 1.5% of Consolidated EBITDA for the immediately preceding
fiscal year of the Borrower; and
(vi) the (A) Borrower and its Subsidiaries may make
payments to (x) the Captive Insurance Company for the sole purpose of
paying insurance premiums owed to the Captive Insurance Company and (y)
the License Subsidiary for the sole purpose of paying any license fees
owed to the License Subsidiary, and (B) (x) the Captive Insurance
Company may pay out claims to (or on behalf of) the Borrower and its
Subsidiaries in respect of the Designated Insured Risks and (y) the
License Subsidiary may pay intellectual property maintenance fees to
the Borrower and its other Subsidiaries.
Notwithstanding anything to the contrary contained above in this Section 9.06,
(x) in no event shall the Borrower or any of its Subsidiaries pay any
management, consulting or similar fee to any of their respective Affiliates
(other than to the Borrower or a Wholly-Owned Domestic Subsidiary thereof that
is a Subsidiary Guarantor (other than the Captive Insurance Company or the
License Subsidiary)), except as specifically provided in clause (v) of this
Section 9.06 and (y) neither the Borrower nor any Subsidiary of the Borrower
shall make any payments to the Captive Insurance Company and the License
Subsidiary except as specifically provided in clause (vi) of this Section 9.06
and as otherwise permitted by Section 9.05.
9.07 Capital Expenditures. (a) The Borrower will not, and
will not permit any of its Subsidiaries to, make any Capital Expenditures,
except that the Borrower and its Subsidiaries (other than the Captive Insurance
Company and the License Subsidiary) may make Capital Expenditures so long as the
aggregate amount of all such Capital Expenditures does not exceed (such amount,
the "Applicable Capital Expenditure Amount") (i) for the period from January 1,
2003 through December 31, 2003 (taken as one accounting period), the remainder
of (x) $50,000,000 minus (y) the aggregate amount of all Permitted Acquisitions
made during such period in which the Maximum Permitted Consideration paid in
connection with any such Permitted Acquisition was equal to or less than
$5,000,000, and (ii) for each fiscal year of the Borrower (taken as one
accounting period) ending thereafter, the remainder of (x) the sum of (I)
$60,000,000 plus (II) the respective amount set forth in the table below
opposite the respective
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Level (i.e., Level 1, Level 2, Level 3, Level 4, Level 5, Level 6, Level 7 or
Level 8, as the case may be) indicated to have been achieved on the last day of
the immediately preceding fiscal year of the Borrower (in each case, as shown in
the respective officer's certificate delivered pursuant to Section 8.01(f) in
respect of such immediately preceding fiscal year) minus (y) the aggregate
amount of all Permitted Acquisitions made during the then current fiscal year of
the Borrower in which the Maximum Permitted Consideration paid in connection
with any such Permitted Acquisition was equal to or less than $5,000,000:
Level Total Leverage Ratio Amount
- ----- -------------------- ------
1 Less than 2.00:1.00 $35,000,000
2 Greater than or equal to 2.00:1.00 but less $30,000,000
than 2.25:1.00
3 Greater than or equal to 2.25:1.00 but less $25,000,000
than 2.75:1.00
4 Greater than or equal to 2.75:1.00 but less $20,000,000
than 3.00:1.00
5 Greater than or equal to 3.00:1.00 but less $15,000,000
than 3.25:1.00
6 Greater than or equal to 3.25:1.00 but less $10,000,000
than 3.50:1.00
7 Greater than or equal to 3.50:1.00 but less $ 5,000,000
than 3.60:1.00
8 Greater than or equal to 3.60:1.00 $ 0
; provided, however, that until the Borrower has delivered the financial
statements required to be delivered pursuant to Section 8.01(c) (accompanied by
the officer's certificate required to be delivered pursuant to Section 8.01(f)
showing the applicable Total Leverage Ratio on the last day of the immediately
preceding fiscal year of the Borrower), the Borrower shall not be permitted to
make Capital Expenditures in excess of $60,000,000 for any fiscal year of the
Borrower plus the Rollover Amount (if any) that is permitted to be used in such
fiscal year.
(b) In addition to the foregoing, in the event that the
Applicable Capital Expenditure Amount permitted to be made by the Borrower and
its Subsidiaries pursuant to clause (a) above in any fiscal year of the Borrower
(before giving effect to any increase in such Applicable Capital Expenditure
Amount pursuant to this clause (b)) is greater than the amount of Capital
Expenditures actually made by the Borrower and its Subsidiaries during such
fiscal year, such excess (the "Rollover Amount") may be carried forward and
utilized to make Capital Expenditures in the immediately succeeding fiscal year,
provided that no amounts once carried
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forward pursuant to this Section 9.07(b) may be carried forward to any fiscal
year of the Borrower thereafter.
(c) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures with the amount of Net Sale Proceeds
received by the Borrower or any of its Subsidiaries from any Asset Sale so long
as such Net Sale Proceeds are reinvested within 359 days following the date of
such Asset Sale, but only to the extent that such Net Sale Proceeds are not
otherwise required to be applied to reduce the Total Revolving Loan Commitment
pursuant to Section 3.03(d).
(d) In addition to the foregoing, the Borrower or any of
its Subsidiaries may make Capital Expenditures with the amount of Net Recovery
Event Proceeds received by the Borrower or any of its Subsidiaries from any
Recovery Event so long as such Net Recovery Event Proceeds are used to replace
or restore any properties or assets in respect of which such Net Recovery Event
Proceeds were paid within 180 days following the date of receipt of such Net
Recovery Event Proceeds from such Recovery Event, but only to the extent that
such Net Recovery Event Proceeds are not otherwise required to reduce the Total
Revolving Loan Commitment pursuant to Section 3.03(e).
(e) In addition to the foregoing, the Borrower and its
Wholly-Owned Domestic Subsidiaries that are Subsidiary Guarantors may consummate
Permitted Acquisitions in accordance with the requirements of Section 8.16.
9.08 Consolidated Interest Coverage Ratio. The Borrower
will not permit the Consolidated Interest Coverage Ratio for any Test Period
ending on the last day of a fiscal quarter of the Borrower set forth below to be
less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
- --------------------- -----
June 30, 2003 2.25:1.00
September 30, 2003 2.25:1.00
December 31, 2003 2.25:1.00
March 31, 2004 2.50:1.00
June 30, 2004 2.50:1.00
September 30, 2004 2.50:1.00
December 31, 2004 2.50:1.00
March 31, 2005 2.75:1.00
June 30, 2005 2.75:1.00
September 30, 2005 2.75:1.00
December 31, 2005 2.75:1.00
March 31, 2006 3.00:1.00
June 30, 2006 3.00:1.00
September 30, 2006 3.00:1.00
December 31, 2006 3.00:1.00
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March 31, 2007 3.25:1.00
June 30, 2007 3.25:1.00
September 30, 2007 3.25:1.00
December 31, 2007 3.25:1.00
March 31, 2008 and the last day of each fiscal
quarter of the Borrower ending thereafter 3.50:1.00
9.09 Maximum Total Leverage Ratio. The Borrower will not
permit the Total Leverage Ratio at any time during a period set forth below to
be greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
From the Effective Date through and including
December 30, 2004 4.00:1.00
December 31, 2004 through and including
December 30, 2005 3.75:1.00
December 31, 2005 through and including
September 29, 2006 3.50:1.00
September 30, 2006 through and including
September 29, 2007 3.25:1.00
September 30, 2007 through and including
March 30, 2008 3.00:1.00
March 31, 2008 through and including the Revolving
Loan Maturity Date 2.75:1.00
9.10 Maximum Senior Secured Leverage Ratio. The Borrower
will not permit the Senior Secured Leverage Ratio at any time to be greater than
1.00:1.00.
9.11 Limitations on Payments of Senior Notes;
Modifications of Senior Note Documents, Certificate of Incorporation, By-Laws
and Certain Other Agreements, etc. The Borrower will not, and will not permit
any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption, repurchase or
acquisition for value of, or any prepayment or redemption as a result
of any asset sale, change of control or similar event of (including, in
each case without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of
paying when due), any Senior Notes;
(ii) amend or modify, or permit the amendment or
modification of any provision of, any Senior Note Document other than
any amendments or modifications which could not reasonably be expected
to be adverse to the interests of the Lenders in any material respect
and which do not require the payment of any fees to the holders of the
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Senior Notes in connection therewith, provided that the prior written
consent of the Administrative Agent is obtained in connection with any
such amendment or modification;
(iii) amend, modify or change its certificate or articles
of incorporation (including, without limitation, by the filing or
modification of any certificate or articles of designation),
certificate of formation, limited liability company agreement or
by-laws (or the equivalent organizational documents), as applicable, or
any agreement entered into by it with respect to its capital stock or
other equity interests (including any Shareholders' Agreement), or
enter into any new agreement with respect to its capital stock or other
equity interests, unless such amendment, modification, change or other
action contemplated by this clause (iii) could not reasonably be
expected to be adverse to the interests of the Lenders in any material
respect;
(iv) amend, modify or change any provision of (x) any
Management Agreement unless such amendment, modification or change
could not reasonably be expected to be adverse to the interests of the
Lenders in any material respect (although no amendment, modification or
change may be made to any monetary term thereof other than to increase
the annual fees thereof up to that amount permitted to be paid by
Section 9.06(v)) or (y) any Tax Sharing Agreement or enter into any new
tax sharing agreement, tax allocation agreement or similar agreement
without the prior written consent of the Administrative Agent (other
than any Tax Sharing Agreement or similar tax agreement entered into
exclusively among the Borrower and its Subsidiaries);
(v) repay any Intercompany Loan owed to the Captive
Insurance Company or the License Subsidiary at any time that a Default
or an Event of Default exists; or
(vi) increase in any material respect the basis on which
the insurance premiums and licensing fees paid to the Captive Insurance
Company and the License Subsidiary are calculated, as the case may be.
9.12 Limitation on Certain Restrictions on Subsidiaries.
The Borrower will not, and will not permit any of its Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such 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 the Borrower or any of its
Subsidiaries, or pay any Indebtedness owed to the Borrower or any of its
Subsidiaries, (b) make loans or advances to the Borrower or any of its
Subsidiaries or (c) transfer any of its properties or assets to the Borrower or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law (including, in the case of the Captive
Insurance Company, the New York Insurance Law and the regulations promulgated
thereunder), (ii) this Agreement and the other Credit Documents, (iii) the
Senior Note Documents, (iv) customary provisions restricting subletting or
assignment of any lease governing any leasehold interest of the Borrower or any
of its Subsidiaries, (v) customary provisions restricting assignment of any
licensing agreement (in which the Borrower or any of its Subsidiaries is the
licensee) or other contract entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business, (vi) restrictions on the
transfer of any asset pending the close of the sale of such asset,
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(vii) restrictions on the transfer of any asset subject to a Lien permitted by
Section 9.01(iii), (vi), (vii), (xiii) or (xiv), and (viii) restrictions or
encumbrances with respect to a Subsidiary of the Borrower imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the capital stock or other equity interests or all or
substantially all of the assets of such Subsidiary, so long as such sale or
disposition is permitted under this Agreement and the other Credit Documents.
9.13 Limitation on Issuance of Capital Stock. (a) The
Borrower will not, and will not permit any of its Subsidiaries to, issue (i) any
preferred stock or other preferred equity interests other than Qualified
Preferred Stock of the Borrower or (ii) any redeemable common stock or other
redeemable common equity interests other than common stock or other redeemable
common equity interests that is redeemable at the sole option of the Borrower or
such Subsidiary, as the case may be.
(b) The Borrower will not permit any of its Subsidiaries
to issue any capital stock or other equity interests (including by way of sales
of treasury stock) or any options or warrants to purchase, or securities
convertible into, capital stock or other equity interests, except (i) for
transfers and replacements of then outstanding shares of capital stock or other
equity interests, (ii) for stock splits, stock dividends and similar issuances
which do not decrease the percentage ownership of the Borrower or any of its
Subsidiaries in any class of the capital stock or other equity interests of such
Subsidiary, (iii) in the case of Foreign Subsidiaries of the Borrower, to
qualify directors and for nominal shares required to be held by local nationals,
in each case to the extent required by applicable law or (iv) for issuances by
Subsidiaries of the Borrower which are newly created or acquired in accordance
with the terms of this Agreement.
9.14 Business, etc. (a) The Borrower will not, and will
not permit any of its Subsidiaries to, engage in any business other than the
businesses engaged in by the Borrower and its Subsidiaries as of the Effective
Date and reasonable extensions thereof.
(b) Notwithstanding the foregoing or anything else in
this Agreement to the contrary, the Borrower will not permit (I) the Captive
Insurance Company to engage in any business or own any significant assets or
have any material liabilities other than (x) its ownership of the capital stock
or other equity interests of the License Subsidiary and its holding of any
Intercompany Loans owed to it as permitted by this Agreement, (y) having those
liabilities which it is responsible for under this Agreement and the other
Documents to which it is a party and in respect of any Intercompany Loans owed
by it as permitted by this Agreement and (z) providing insurance only to, and
collecting related premiums only from, the Borrower and its Subsidiaries with
respect to the Designated Insured Risks (it being understood that in no event
shall the Borrower permit the Captive Insurance Company to assume any
reinsurance from any other insurance company, including any reinsurance of the
Borrower's and its Subsidiaries' risks that are directly insured by any other
insurance company) and (II) the License Subsidiary to engage in any business or
own any significant assets or have any material liabilities other than (x)
owning the intellectual property owned by the License Subsidiary and its holding
of any Intercompany Loans owed to it as permitted by this Agreement, (y) the
licensing of such intellectual property to the Borrower, its other Subsidiaries
and third Persons as permitted by this Agreement pursuant to customary licensing
arrangements and the receipt of license fees from the Borrower, its Subsidiaries
and such other Persons with respect thereto, and (z) having those
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liabilities which it is responsible for under this Agreement and the other
Documents to which it is a party and in respect of any Intercompany Loans and
intellectual property maintenance fees owed by it as permitted by this Agreement
provided that, in addition to the foregoing, each of the Captive Insurance
Company and the License Subsidiary may engage in those activities that are
incidental to (a) the maintenance of its existence in compliance with applicable
law and (b) legal, tax and accounting matters in connection with any of the
foregoing activities.
9.15 Limitation on Creation of Subsidiaries, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, establish,
create or acquire after the Effective Date any additional Subsidiaries; provided
that the Borrower and its Wholly-Owned Subsidiaries (other than the Captive
Insurance Company and the License Subsidiary) shall be permitted to establish,
create and, to the extent permitted by this Agreement, acquire Wholly-Owned
Subsidiaries and, to the extent permitted by Section 9.05(xiii) and the
definition of Permitted Acquisition, non-Wholly-Owned Subsidiaries, in each case
so long as (i) the equity interests of each such new Subsidiary (to the extent
owned by a Credit Party) is pledged pursuant to, and to the extent required by,
the Pledge Agreement, (ii) each such new Domestic Subsidiary (and, to the extent
required by Section 8.13, each such new Foreign Subsidiary), within 10 Business
Days after the establishment, creation or acquisition thereof, executes a
counterpart of a Joinder Agreement pursuant to which such new Subsidiary shall
become a party to the Subsidiaries Guaranty, the Pledge Agreement and the
Security Agreement, and (iii) each such new Domestic Subsidiary (and, to the
extent required by Section 8.13, each such new Foreign Subsidiary), to the
extent requested by the Administrative Agent or the Required Lenders, takes all
other actions required pursuant to Section 8.12. In addition, each such new
Subsidiary which is required to become a Credit Party will execute and deliver,
or cause to be executed and delivered, all other relevant documentation of the
type described in Section 5 as such new Subsidiary would have had to deliver if
such new Subsidiary were a Credit Party on the Effective Date.
9.16 Change of Legal Names; Type of Organization (and
Whether a Registered Organization); Jurisdiction of Organization etc. The
Borrower will not, and will not permit any Subsidiary Guarantor to, change its
legal name, its type of organization, its status as a registered organization
(in the case of a registered organization), its jurisdiction of organization,
its location, or its organizational identification number (if any), except that
any such changes shall be permitted (so long as not in violation of the
applicable requirements of the Security Documents and so long as same do not
involve (x) a registered organization ceasing to constitute the same or (y) the
Borrower or any Subsidiary Guarantor changing its jurisdiction of organization
or location from the United States or a State thereof to a jurisdiction of
organization or location, as the case may be, outside the United States or a
State thereof) if (i) it shall have given to the Collateral Agent not more than
15 days' written notice after each change to the information listed on Schedule
IX (as adjusted for any subsequent changes thereto previously made in accordance
with this sentence), together with a supplement to Schedule IX which shall
correct all information contained therein for the Borrower or the respective
Subsidiary Guarantor, and (ii) in connection with the respective such change or
changes, it shall have taken all action reasonably requested by the Collateral
Agent to maintain the security interests of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
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9.17 Certain Deposit Accounts. Without limiting the
provisions of Section 9.05(ii), the Borrower will not, and will not permit any
of its Subsidiaries to, maintain Deposit Accounts (as defined in the Security
Agreement) in which the Borrower or any such Subsidiary holds more than (i)
$750,000 in the aggregate for the Borrower or any such Subsidiary (on an
individual basis) for any consecutive period in excess of five Business Days or
(ii) $50,000 (or $200,000 for the first 45 days following the Effective Date in
the case of the Fleet Deposit Accounts) in the aggregate for the Borrower or any
such Subsidiary (on an individual basis) at any other time unless, in either
case, such Deposit Account or Deposit Accounts are either subject to a "control
agreement" referred to in Section 3.9 of the Security Agreement or otherwise
under the "control" (within the meaning of Section 9-104 of the New York UCC) of
the Administrative Agent.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the
payment when due of any principal of any Loan or any Note or (ii) default, and
such default shall continue unremedied for three or more Business Days, in the
payment when due of any interest on any Loan or Note, any Unpaid Drawing or any
Fees or any other amounts owing hereunder or under any other Credit Document; or
10.02 Representations, etc. Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any certificate delivered to the Administrative Agent or any
Lender pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
10.03 Covenants. The Borrower or any of its Subsidiaries
shall (i) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 8.01(g)(i), 8.08, 8.11, 8.16, 8.18 or
Section 9 or (ii) default in the due performance or observance by it of any
other term, covenant or agreement contained in this Agreement or in any other
Credit Document (other than those set forth in Sections 10.01 and 10.02) and
such default shall continue unremedied for a period of 30 days after written
notice thereof to the defaulting party by the Administrative Agent or the
Required Lenders; or
10.04 Default Under Other Agreements. (i) The Borrower or
any of its Subsidiaries shall (x) default in any payment of any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided in an
instrument or agreement under which such Indebtedness was created or (y) default
in the observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Obligations) of the Borrower or any of its Subsidiaries shall be declared to
be (or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an
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Event of Default under this Section 10.04 unless (A) the principal amount of any
one issue of such Indebtedness is at least $2,500,000 or (B) the aggregate
principal amount of all Indebtedness as described in preceding clauses (i) and
(ii) is at least $5,000,000; or
10.05 Bankruptcy, etc. The Borrower or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Subsidiaries, and the petition is
not controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries, or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries (including, but not
limited to, in the case of the Captive Insurance Company, Article 74 of the New
York Insurance Law), or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate, limited liability company or similar action is
taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is reasonably likely to
incur any liability to or on account of a Plan under Section 409, 502(i),
502(l), 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or on account of a group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code, or the Borrower or any Subsidiary of the Borrower has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or Plans or Foreign Pension Plans, a "default" within
the
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meaning of Section 4219(c)(5) of ERISA shall occur with respect to any Plan; (b)
there shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability, either
individually and/or in the aggregate, has had, or could reasonably be expected
to have, a Material Adverse Effect; or
10.07 Security Documents. Any of the Security Documents
shall cease to be in full force and effect, or shall cease to give the
Collateral Agent for the benefit of the Secured Creditors the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on, all of the
Collateral, in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 9.01), and subject
to no other Liens (except as permitted by Section 9.01), or any Credit Party
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any such Security
Document and such default shall continue beyond the period of grace, if any,
specifically applicable thereto pursuant to the terms of such Security Document
or, if no such period of grace is provided in such Security Document, such
default shall continue unremedied for a period of 30 days after written notice
to the Borrower by the Administrative Agent or the Required Lenders; or
10.08 Subsidiaries Guaranty. The Subsidiaries Guaranty or
any provision thereof shall cease to be in full force or effect as to any
Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting for or on
behalf of such Subsidiary Guarantor shall deny or disaffirm such Subsidiary
Guarantor's obligations under the Subsidiaries Guaranty or any Subsidiary
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any Subsidiary of the Borrower involving in the
aggregate for the Borrower and its Subsidiaries a liability (to the extent not
paid or fully covered by a reputable and solvent third party insurance company)
and such judgments and decrees either shall be final and non-appealable or shall
not be vacated, discharged or stayed or bonded pending appeal for any period of
60 consecutive days, and (I) any one such judgment or decree equals or exceeds
$2,500,000 or (II) the aggregate amount of all such judgments or decrees equals
or exceeds $5,000,000; or
10.10 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Revolving Loan Commitment terminated, whereupon the
Revolving Loan Commitment of each Lender shall forthwith terminate immediately
and any Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in
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respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter of Credit
which may be terminated in accordance with its terms; (iv) direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower, it will pay) to the Collateral Agent at the Payment Office such
additional amount of cash or Cash Equivalents, to be held as security by the
Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrower and then outstanding; (v) enforce,
as Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents; and (vi) apply any cash collateral held by the
Administrative Agent pursuant to Section 4.02 to the repayment of the
Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Entity or Business" shall mean either (x) the assets
and liabilities constituting a business, division or product line of any Person
not already a Subsidiary of the Borrower or (y) 100% of the capital stock or
other equity interests of any such Person, which Person shall, as a result of
such stock acquisition, become a Wholly-Owned Domestic Subsidiary of the
Borrower (or shall be merged with and into the Borrower or a Subsidiary
Guarantor which is a Wholly-Owned Domestic Subsidiary of the Borrower, with the
Borrower or such Subsidiary Guarantor which is a Wholly-Owned Domestic
Subsidiary being the surviving Person), provided that any foreign operations of
any such Person may be held by a Wholly-Owned Foreign Subsidiary of such Person
to the extent otherwise permitted under this Agreement.
"Additional Security Documents" shall have the meaning
provided in Section 8.12.
"Additional Senior Note Indebtedness" shall have the meaning
provided in Section 9.04(iv).
"Administrative Agent" shall mean DBTCA, in its capacity as
Administrative Agent for the Lenders hereunder, and shall include any successor
to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to, all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power (i)
to vote 5% or more of the securities having ordinary voting power for the
election of directors (or equivalent governing body) of such Person or (ii) to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by
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contract or otherwise; provided, however, that neither the Administrative Agent
nor any Affiliate thereof shall be considered an Affiliate of the Borrower or
any Subsidiary thereof.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended or renewed from time to time.
"Applicable Capital Expenditure Amount" shall have the meaning
provided in Section 9.07(a).
"Applicable Margin" shall mean (i) in the case of Revolving
Loans that are maintained as (x) Base Rate Loans, a percentage per annum equal
to 3.00%, and (y) Eurodollar Loans, a percentage per annum equal to 4.00%, and
(ii) in the case of Swingline Loans, a percentage per annum equal to 3.00%.
"Asset Sale" shall mean any sale, transfer or other
disposition by the Borrower or any of its Subsidiaries to any Person (including
by way of redemption by such Person) other than to the Borrower or a
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of, or equity interests in,
another Person) other than sales of assets pursuant to Sections 9.02(ii), (vi),
(vii), (x) and (xii).
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Authorized Financial Officer" of any Person shall mean the
chief financial officer, the vice-president finance, the treasurer or assistant
treasurer of such Person or, if there is no chief financial officer,
vice-president finance, treasurer or assistant treasurer of such Person, any
other senior executive officer of such Person designated by the president of
such Person as being a financial officer authorized to deliver and certify
financial information under this Agreement.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" shall mean, at any time, the higher of (i) the
Prime Lending Rate at such time and (ii) 1/2 of 1% in excess of the overnight
Federal Funds Rate at such time.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
each Revolving Loan designated or deemed designated as such by the Borrower at
the time of the incurrence thereof or conversion thereto.
"Borrower" shall have the meaning set forth in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Revolving
Loan from all the Lenders (or from the Swingline Lender in the case of Swingline
Loans) on a given date (or resulting from a conversion or conversions on such
date) having in the case of Eurodollar Loans the same Interest Period, provided
that Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered
part of the related Borrowing of Eurodollar Loans.
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"BRS" shall mean Bruckmann, Rosser, Sherrill & Co., L.P.
"BRS Investors" shall mean each of the "BRS Investors" (as
such term is defined in the Stockholders Agreement as in effect on the Effective
Date).
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York, New York, a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) above and which is also a day for
trading by and between banks in U.S. dollar deposits in the interbank Eurodollar
market.
"Calculation Period" shall mean, in the case of any Permitted
Acquisition or the issuance of any Additional Senior Note Indebtedness, the Test
Period most recently ended prior to the date of any such Permitted Acquisition
or the issuance of any such Additional Senior Note Indebtedness for which
financial statements are available.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to
any Person, all rental obligations of such Person which, under generally
accepted accounting principles, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.
"Captive Insurance Company" shall mean TSI Insurance, Inc., a
New York captive insurance company and a Wholly-Owned Domestic Subsidiary of the
Borrower.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly 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 six months from the date of acquisition, (ii) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within six months from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either S&P or
Moody's, (iii) Dollar denominated time deposits, certificates of deposit and
bankers acceptances of any Lender or any commercial bank having, or which is the
principal banking subsidiary of a bank holding company having, a long-term
unsecured debt rating of at least "A" or the equivalent thereof from S&P or "A2"
or the equivalent thereof from Moody's with maturities of not more than six
months from the date of acquisition by such Person, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iii) above, (v) commercial paper issued by
any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
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Moody's and in each case maturing not more than six months after the date of
acquisition by such Person, and (vi) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same has been amended and may
hereafter be amended from time to time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean any of (i) prior to the date on
which a Qualified IPO occurs, (x) the Management Investors, BRS, the BRS
Investors and their Permissible Transferees shall in the aggregate cease to own
Common Stock representing more than 50% of the common voting equity interest in
the Borrower's capital stock on a fully-diluted basis (assuming the exercise of
all securities, exercisable, convertible or exchangeable for or into common
equity interests of the Borrower) or (y) BRS, the BRS Investors and their
Permissible Transferees shall in the aggregate cease to own Common Stock
representing at least 35% of the voting common equity interests in the
Borrower's capital stock on a fully-diluted basis (assuming the exercise of all
securities exercisable, convertible or exchangeable for or into common equity
interests of the Borrower), (ii) from and after the date on which a Qualified
IPO occurs, (w) the Management Investors, BRS, the BRS Investors and their
Permissible Transferees shall cease to own Common Stock representing not less
than 33% of the common voting equity interest in the Borrower's capital stock on
a fully-diluted basis (assuming the exercise of all securities, exercisable,
convertible or exchangeable for or into common equity interest of the Borrower)
or (x) BRS, the BRS Investors and their Permissible Transferees shall in the
aggregate cease to own Common Stock representing at least 20% of the common
voting equity interests in the Borrower's capital stock on a fully diluted basis
(assuming the exercise of all securities exercisable, convertible or
exchangeable for into common equity interests of the Borrower) or (y) any
"Person" or "Group" (within the meaning of sections 13(d) and 14(d) under the
Exchange Act as in effect on the Effective Date) of Persons, owns (beneficially
or of record) a greater percentage than BRS, the BRS Investors and their
Permissible Transferees of common equity interest in the Borrower's capital
stock, in each case, on a fully-diluted basis (assuming the exercise of all
securities exercisable, convertible or exchangeable for or into common equity
interests of the Borrower), or (iii) a "change of control" pursuant to, and as
defined in, the Senior Note Documents shall occur.
"Class A Common Stock" shall have the meaning provided in
Section 7.13.
"Class B Common Stock" shall have the meaning provided in
Section 7.13.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code as in effect at the
date of this Agreement and any subsequent provisions of the Code amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including, without
limitation, all Pledge Agreement Collateral, all Security
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Agreement Collateral and all cash and Cash Equivalents delivered as collateral
pursuant to Section 4.02 or 10.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Security
Documents.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Common Stock" shall mean, collectively, the Class A Common
Stock and the Class B Common Stock.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income for such period before deducting therefrom consolidated interest
expense of the Borrower and its Subsidiaries for such period and provision for
taxes based on income that were included in arriving at Consolidated Net Income
for such period and without giving effect (x) to any extraordinary gains or any
extraordinary non-cash losses (except to the extent that any such extraordinary
non-cash losses will require a cash payment in a future period) and (y) to any
gains or losses from sales of assets other than from sales of inventory in the
ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period, adjusted by (x) adding thereto (i) the amount of all
amortization of intangibles and depreciation to the extent that same was
deducted in arriving at Consolidated Net Income for such period, (ii) the amount
of all Transaction Expenses to the extent that same were deducted in arriving at
Consolidated Net Income for such period, (iii) the amount of all deferred rent
expense to the extent that same was deducted in arriving at Consolidated Net
Income for such period, (iv) the amount of all non-cash deferred compensation
expense resulting from the issuance of capital stock, stock options or stock
appreciation rights to former or current directors, officers or employees of the
Borrower or any Subsidiary of the Borrower, or the exercise of such options or
rights, in each case, to the extent that same were deducted in arriving at
Consolidated Net Income for such period, (v) the amount of all non-cash deferred
compensation expense resulting from the repurchase of capital stock, options and
rights described in preceding clause (iv) of this definition to the extent that
same were deducted in arriving at Consolidated Net Income for such period, and
(vi) the amount of all non-cash charges resulting from discontinued operations
to the extent otherwise permitted by FAS 141 to the extent that same were
deducted in arriving at Consolidated Net Income for such period, and (y)
subtracting therefrom the amount of all cash payments and cash charges made
during such period relating to any non-cash charges taken in a previous period
pursuant to preceding clause (x)(vi) to the extent not otherwise deducted in
arriving at the Consolidated Net Income for such current period; it being
understood that in determining the Total Leverage Ratio and the Senior Secured
Leverage Ratio only, Consolidated EBITDA for any period shall be calculated on a
Pro Forma Basis to give effect to any Acquired Entity or Business acquired
during such period pursuant to a Permitted Acquisition and not subsequently sold
or otherwise disposed of by the Borrower or any of its Subsidiaries during such
period.
"Consolidated Indebtedness" shall mean, at any time, the
aggregate amount of all Indebtedness of the Borrower and its Subsidiaries at
such time determined on a consolidated
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basis (but excluding, to the extent otherwise included therein, Contingent
Obligations in respect of operating leases of the Borrower and its
Subsidiaries).
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of Consolidated EBITDA to Consolidated Interest Expense for
such period.
"Consolidated Interest Expense" shall mean, for any period,
the sum of the total consolidated interest expense of the Borrower and its
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of the Borrower and its Subsidiaries representing the interest
factor for such period; provided that the amortization of deferred financing,
legal and accounting costs with respect to this Agreement and the Senior Notes
in each case shall be excluded from Consolidated Interest Expense to the extent
same would otherwise have been included therein.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of the Borrower and its Subsidiaries for such period,
determined on a consolidated basis (after any deduction for minority interests),
provided that (i) in determining Consolidated Net Income, the net income of any
other Person which is not a Subsidiary of the Borrower or is accounted for by
the Borrower by the equity method of accounting shall be included only to the
extent of the payment of cash dividends or cash distributions by such other
Person to the Borrower or a Subsidiary thereof during such period, (ii) the net
income of any Subsidiary of the Borrower shall be excluded to the extent that
the declaration or payment of cash dividends or similar cash distributions by
that Subsidiary of that net income is not at the date of determination permitted
by operation of its charter or any agreement, instrument or law applicable to
such Subsidiary and (iii) the net income (or loss) of any other Person acquired
by the Borrower or a Subsidiary of the Borrower in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded.
"Contingent Obligation" shall mean, as to any Person, without
duplication, any obligation of such Person as a result of such Person being a
general partner of any other Person, unless the underlying obligation is
expressly made non-recourse as to such general partner, and any obligation 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,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of 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. 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 not stated or determinable, the maximum
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reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty, each Security Document and each Joinder
Agreement.
"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary
Guarantor.
"DBTCA" shall mean Deutsche Bank Trust Company Americas, in
its individual capacity, and any successor corporation thereto by merger,
consolidation or otherwise.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to
which a Lender Default is in effect.
"Designated Insured Risks" shall mean those categories of
risks that are not covered by the Borrower's and its Subsidiaries third party
insurance coverage required to be maintained pursuant to Section 8.03 (such as,
but not limited to, war, sabotage, terrorism, reputation and deceptive practices
and other coverages in excess of those amounts required to be maintained by such
Section 8.03) and which are not generally available at commercially reasonable
rates as determined in good faith by the Board of Directors of the Borrower.
"Dividend" shall mean, with respect to any Person, that such
Person has declared or paid a dividend, distribution or returned any equity
capital to its stockholders, partners or members or authorized or made any other
distribution, payment or delivery of property (other than common equity of such
Person) or cash to its stockholders, partners or members in their capacity as
such, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock or
any partnership or membership interests outstanding on or after the Effective
Date (or any options or warrants issued by such Person with respect to its
capital stock or other 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 the capital
stock or any partnership or membership interests of such Person outstanding on
or after the Effective Date (or any options or warrants issued by such Person
with respect to its capital stock or other equity interests). 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.
"Documents" shall mean the Credit Documents and the Senior
Note Documents.
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"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower incorporated or organized in the United States or any State thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section
13.10.
"Eligible Transferee" shall mean and include a commercial
bank, an insurance company, a finance company, a financial institution, any fund
that invests in loans or any other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in
Section 5.05.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.;
the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act,
42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section
2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Hazardous Material Transportation
Act, 49 U.S.C. Section 1801 et seq.; the Occupational Safety and Health Act, 29
U.S.C. Section 651 et seq.; and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the
Borrower is deemed to be a "single employer" within the meaning of Section
414(b), (c), (m) or (o) of the Code.
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"Eurodollar Loan" shall mean each Revolving Loan designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by the
Administrative Agent for Dollar deposits of amounts in immediately available
funds comparable to the outstanding principal amount of the Eurodollar Loan of
the Administrative Agent (in its capacity as a Lender) with maturities
comparable to the Interest Period applicable to such Eurodollar Loan commencing
two Business Days thereafter as of 11:00 A.M. (New York time) on the applicable
Interest Determination Date, divided (and rounded upward to the nearest 1/16 of
1%) by (b) a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
10.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Existing Credit Agreement" shall mean the Amended and
Restated Credit Agreement, dated as of October 16, 1997, among the Borrower, the
lenders party thereto and DBTCA (formerly known as Bankers Trust Company), as
administrative agent (as in effect on the Effective Date).
"Existing Indebtedness" shall have the meaning provided in
Section 7.21.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.05.
"Existing Mezzanine Subordinated Notes" shall mean the
Borrower's existing mezzanine subordinated notes issued pursuant to the Existing
Mezzanine Subordinated Notes Agreement.
"Existing Mezzanine Subordinated Notes Agreement" shall mean
that certain Subordinated Credit Agreement, dated as of November 3, 2000,
between the Borrower and CapitalSource Finance, LLC (as in effect on the
Effective Date).
"Existing Mezzanine Subordinated Notes Redemption" shall have
the meaning provided in Section 5.07.
"Existing Senior Notes" shall mean the Borrower's existing
unsecured 9.75% Notes due December 16, 2004.
"Existing Senior Notes Indenture" shall mean the Indenture,
dated as of October 16, 1997, entered into by and between the Borrower and the
Existing Senior Notes Trustee (as in effect on the Effective Date).
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"Existing Senior Notes Redemption" shall have the meaning
provided in Section 5.07.
"Existing Senior Notes Redemption Date" shall have the meaning
provided in Section 5.07.
"Existing Senior Notes Trustee" shall mean the United States
Trust Company of New York, as trustee under the Existing Senior Notes Indenture.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Farallon" shall mean, collectively, Farallon Capital
Partners, L.P., Farallon Capital Institutional Partners, L.P., RR Capital
Partners, L.P., and Farallon Capital Institutional Partners II, L.P.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to 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 for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"Fleet Deposit Accounts" shall mean those deposit accounts
maintained with Fleet Bank as set forth in Annex F-2 to the Security Agreement.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the Borrower
or any one or more of its Subsidiaries primarily for the benefit of employees of
the Borrower or such Subsidiaries residing outside the United States, which
plan, fund or other similar program provides, or results in, retirement income,
a deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower that is incorporated or organized under the laws of any jurisdiction
other than the United States of America or any State thereof.
"Hazardous Materials" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, dielectric fluid containing
levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials
or substances defined as or included in the definition of "hazardous
substances," "hazardous waste," "hazardous materials," "extremely hazardous
substances," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import, under
any applicable Environmental Law; and (c) any
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other chemical, material or substance, the exposure to, or Release of which is
prohibited, limited or regulated by any governmental authority.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price of
property or services, (ii) the maximum amount available to be drawn under all
letters of credit, bankers' acceptances and similar obligations issued for the
account of such Person and all unpaid drawings in respect of such letters of
credit, bankers' acceptances and similar obligations, (iii) all Indebtedness of
the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person (provided that, if the
Person has not assumed or otherwise become liable in respect of such
Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the
fair market value of the property to which such Lien relates as determined in
good faith by such Person), (iv) the aggregate amount of all Capitalized Lease
Obligations of such Person, (v) all obligations of such Person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person, and (vii) all obligations under any Interest Rate
Protection Agreement, any Other Hedging Agreement or under any similar type of
agreement. Notwithstanding the foregoing, Indebtedness shall not include trade
payables and accrued expenses incurred by any Person in accordance with
customary practices and in the ordinary course of business of such Person.
"Intercompany Loan" shall have the meaning provided in Section
9.05(vii).
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Lender" shall mean each of DBTCA (except as otherwise
provided in Section 12.09) and any other Lender reasonably acceptable to the
Administrative Agent which agrees to issue Letters of Credit hereunder, provided
that until such time as it agrees otherwise, DBTCA shall not be an Issuing
Lender with respect to any trade Letter of Credit. Any Issuing Lender may, in
its discretion, arrange for one or more Letters of Credit to be issued by one or
more Affiliates of such Issuing Lender.
"Joinder Agreement" shall mean a Joinder Agreement
substantially in the form of Exhibit L (appropriately completed).
"L/C Supportable Obligations" shall mean (i) obligations of
the Borrower or any of its Subsidiaries with respect to workers' compensation,
surety bonds and other similar
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statutory obligations, (ii) rental obligations of the Borrower or any of its
Subsidiaries under Real Property leases to which the Borrower or any of its
Subsidiaries are a party to and (iii) such other obligations of the Borrower or
any of its Subsidiaries as are reasonably acceptable to the respective Issuing
Lender and otherwise permitted to exist pursuant to the terms of this Agreement
(other than obligations in respect of the Senior Notes (including any guarantees
thereof) and any capital stock).
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall mean each financial institution listed on
Schedule I, as well as any Person that becomes a "Lender" hereunder pursuant to
Section 1.13 or 13.04(b).
"Lender Default" shall mean (i) the refusal (which has not
been retracted) or the failure of a Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified in
writing the Borrower and/or the Administrative Agent that such Lender does not
intend to comply with its obligations under Section 1.01(a), 1.01(c) or 2.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"License Subsidiary" shall mean TSI Holdings (IP), LLC, a
Delaware limited liability company and a Wholly-Owned Domestic Subsidiary of the
Borrower.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in
Section 5.05.
"Management Investors" shall mean the directors, executive
officers and other senior management investors of the Borrower party to the
Stockholders Agreement on the Effective Date or who become party thereto after
the Effective Date with the approval of the Board of Directors of the Borrower.
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"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(c).
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean (i) a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole or (ii) a material adverse effect (x) on the rights or remedies of
the Lenders or the Administrative Agent hereunder or under any other Credit
Document or (y) on the ability of the Credit Parties taken as a whole to perform
their obligations to the Lenders or Administrative Agent hereunder or under any
other Credit Document.
"Maximum Permitted Consideration" shall mean, with respect to
any Permitted Acquisition, the sum (without duplication) of (i) the fair market
value of the common stock of the Borrower (based on (x) the closing and/or
trading price of the common stock of the Borrower on the date of such Permitted
Acquisition on the stock exchange on which the common stock of the Borrower is
listed or the automated quotation system on which the common stock is quoted, or
(y) if the common stock of the Borrower is not listed on an exchange or quoted
on a quotation system, the bid and asked prices of the common stock in the
over-the-counter market at the close of trading or (z) if the common stock of
the Borrower is not so listed, based on a good faith determination of the Board
of Directors of the Borrower) issued as consideration in connection with such
Permitted Acquisition, (ii) the fair market value of all Qualified Preferred
Stock of the Borrower (based on a good faith determination of the Board of
Directors of the Borrower) issued as consideration in connection with such
Permitted Acquisition, (iii) the aggregate principal amount of, and other
obligations due under, all Seller Financing and Permitted Acquired Debt
incurred, issued, acquired and/or assumed by the Borrower or any of its
Subsidiaries in connection with such Permitted Acquisition, (iv) the aggregate
amount of all cash paid by the Borrower or any of its Subsidiaries in connection
with such Permitted Acquisition (including payments of fees, costs, expenses and
taxes in connection therewith), (v) the aggregate principal amount of, and other
obligations due under, all other Indebtedness assumed, incurred and/or issued by
the Borrower or any of its Subsidiaries in connection with such Permitted
Acquisition to the extent permitted by Section 9.04, (vi) the aggregate amount
that could reasonably be expected to be paid (based on good faith projections
prepared by the Borrower) pursuant to any earn-out, non-compete, consulting or
deferred compensation or purchase price adjustment) for such Permitted
Acquisition and (vii) the fair market value (based on good faith projections
prepared by the Borrower) of all other consideration payable in connection with
such Permitted Acquisition.
"Maximum Swingline Amount" shall mean $2,000,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans
maintained as (x) Base Rate Loans, $500,000, and (y) Eurodollar Loans,
$1,000,000, and (ii) for Swingline Loans, $100,000.
"Moody's" shall mean Moody's Investors Service, Inc.
"NAIC" shall mean the National Association of Insurance
Commissioners.
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"Net Debt Proceeds" shall mean, with respect to any incurrence
of Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Recovery Event Proceeds" shall mean, with respect to any
Recovery Event, the cash proceeds (net of reasonable costs, expenses and taxes
incurred in connection with such Recovery Event) received by the respective
Person in connection with such Recovery Event.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs and expenses of
such sale (including fees and commissions, payments of unassumed liabilities
relating to the assets sold and required payments of any Indebtedness (other
than Indebtedness secured pursuant to the Security Documents) which is secured
by the respective assets which were sold), and the incremental taxes paid or
payable as a result of such Asset Sale.
"Non-Compete Agreements" shall have the meaning provided in
Section 5.05.
"Non-Defaulting Lender" shall mean and include each Lender
other than a Defaulting Lender.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion/Continuation" shall have the meaning
provided in Section 1.06.
"Notice Office" shall mean (i) for credit notices, the office
of the Administrative Agent located at 31 West 52nd Street, 7th Floor, New York,
New York 10019, Attention: Carin Grisafi, Telephone No.: (646) 324-2201, and
Telecopier No.: (646) 324-7456, and (ii) for operational notices, the office of
the Administrative Agent located at 90 Hudson Street, 5th Floor, Jersey City,
New Jersey 07302, Attention: John Quinn, Telephone No.: (201) 593-2177, and
Telecopier No.: (201) 593-2310, or such other office or person as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Collateral Agent, any Issuing Lender, the Swingline
Lender or any Lender pursuant to the terms of this Agreement or any other Credit
Document.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
arrangements, or arrangements designed to protect against fluctuations in
currency values or commodity prices.
"Participant" shall have the meaning provided in Section
2.04(a).
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"Payment Office" shall mean the office of the Administrative
Agent located at 90 Hudson Street, 5th Floor, Jersey City, New Jersey or such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Lender at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the Percentage of any
Lender is to be determined after the Total Revolving Loan Commitment has been
terminated, then the Percentage of such Lender shall be determined immediately
prior (and without giving effect) to such termination.
"Permissible Transferees" shall mean (i) in the case of BRS or
any BRS Investor, (A) any Affiliate of BRS, (B) any managing director, general
partner, limited partner (but, in the case of any limited partner, only to the
extent that such limited partner receives its shares of equity in the Borrower
through a pro rata in-kind distribution from the existing fund through which
such limited partner's investment in the Borrower is held), director, officer or
employee of BRS or any Affiliate thereof (collectively, "BRS Associates"), and
his or her spouse, parents, siblings, members of his or her immediate family
(including adopted children) and/or direct lineal descendants or (C) the heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries of
any BRS Associate and (D) any trust, the beneficiaries of which, or a
corporation or partnership, the stockholders or partners of which, include only
a BRS Associate, his or her spouse, parents, siblings, or direct lineal
descendants, and (ii) in the case of any Management Investor, (A) his or her
executor, administrator, testamentary trustee, legatee or beneficiaries, (B) his
or her spouse, parents, siblings, members of his or her immediate family
(including adopted children) and/or direct lineal descendants or (C) a trust,
the beneficiaries of which, or a corporation or partnership, the stockholders or
partners of which, include only the Management Investor, as the case may be, and
his or her spouse, parents, siblings, members of his or her immediate family
(including adopted children) and/or direct lineal descendants.
"Permitted Acquired Debt" shall have the meaning provided in
Section 9.04(vi).
"Permitted Acquisition" shall mean the acquisition by the
Borrower or a Wholly-Owned Domestic Subsidiary of the Borrower which is a
Subsidiary Guarantor of an Acquired Entity or Business (including by way of
merger of such Acquired Entity or Business with and into the Borrower (so long
as the Borrower is the surviving corporation) or a Wholly-Owned Domestic
Subsidiary of the Borrower which is a Subsidiary Guarantor (so long as the
Subsidiary Guarantor is the surviving corporation)), provided that (in each
case) (A) the consideration paid or to be paid by the Borrower or such
Wholly-Owned Domestic Subsidiary consists solely of the type of consideration
set forth in the definition of "Maximum Permitted Consideration", (B) in the
case of the acquisition of 100% of the capital stock or other equity interests
of any Person (including way of merger), such Person shall own no capital stock
or other equity interests of any other Person (excluding de minimis amounts)
unless either (x) such Person owns 100% of the capital stock or other equity
interests of such other Person or (y) (1) such Person and/or its Wholly-Owned
Subsidiaries own at least 80% of the consolidated assets of such Person and its
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Subsidiaries and (2) any non-Wholly Owned Subsidiary of such Person was
non-Wholly Owned prior to the date of such Permitted Acquisition of such Person,
(C) at least 90% of the consolidated assets and consolidated revenues of the
business, division or product line acquired pursuant to the respective Permitted
Acquisition, or of the business of the Person acquired pursuant to the
respective Permitted Acquisition and its Subsidiaries taken as a whole, is in
the United States, (D) the Acquired Entity or Business acquired pursuant to the
respective Permitted Acquisition is in a business permitted by Section 9.14 and
(E) all requirements of Sections 8.16, 9.02 and 9.15 applicable to Permitted
Acquisitions are satisfied. Notwithstanding anything to the contrary contained
in the immediately preceding sentence, an acquisition which does not otherwise
meet the requirements set forth above in the definition of "Permitted
Acquisition" shall constitute a Permitted Acquisition if, and to the extent, the
Required Lenders agree in writing, prior to the consummation thereof, that such
acquisition shall constitute a Permitted Acquisition for purposes of this
Agreement.
"Permitted Acquisition Basket Amount" shall mean (i) for the
period from the Effective Date through and including April 16, 2004,
$80,000,000, (ii) for the period from April 17, 2004 through and including
December 31, 2004, $30,000,000, and (iii) for each fiscal year of the Borrower
ending after December 31, 2004, $40,000,000; provided, however, (A) in the event
that the Maximum Permitted Consideration paid in respect of all Permitted
Acquisitions consummated during any fiscal year or period (as the case may be)
referenced above is less than the Permitted Acquisition Basket Amount for such
fiscal year or period, as the case may be (without giving effect to any increase
in such Permitted Acquisition Basket Amount pursuant to this clause (A) or
clause (B) below), the lesser of (x) such excess and (y) $20,000,000 may be
carried forward and utilized to make Permitted Acquisitions in the immediately
succeeding fiscal year or period (as the case may be) of the Borrower (it being
understood that no amounts once carried forward pursuant to this clause (A) may
be carried forward to any fiscal year or period (as the case may be) of the
Borrower thereafter), and (B) in the event that the Maximum Permitted
Consideration paid in respect of all Permitted Acquisitions consummated during
any fiscal year or period (as the case may be) referenced above equals the
Permitted Acquisition Basket Amount for such fiscal year or period (as the case
may be), additional Permitted Acquisitions may be consummated during such fiscal
year or period (as the case may be) by utilizing up to $20,000,000 of
expenditure amounts permitted to be made in the immediately succeeding fiscal
year or period (as the case may be) (and with any such additional Permitted
Acquisitions made pursuant to this clause (B) in such current fiscal year or
period (as the case may be) to reduce the Permitted Acquisition Basket Amount
for such immediately succeeding fiscal year or period (as the case may be) on a
dollar-for-dollar basis), provided further, the Permitted Acquisition Basket
Amount in any fiscal year or period referred to above may not be increased by
more than $20,000,000 (whether by operation of clause (A) or (B) of the
preceding proviso or a combination thereof).
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, limited liability company, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
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"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, a Subsidiary of the Borrower or
an ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.11.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge
Agreement.
"Prime Lending Rate" shall mean the rate which the
Administrative Agent announces from time to time as its prime lending rate, the
Prime Lending Rate to change when and as such prime lending rate changes. The
Prime Lending Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer by the Administrative
Agent, which may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, in connection with any
calculation of compliance with any financial covenant or financial term, the
calculation thereof after giving effect on a pro forma basis to (x) the
incurrence of any Indebtedness (other than revolving Indebtedness, except to the
extent same is incurred to refinance other outstanding Indebtedness or to
finance a Permitted Acquisition) after the first day of the relevant Calculation
Period as if such Indebtedness had been incurred (and the proceeds thereof
applied) on the first day of the relevant Calculation Period, (y) the permanent
repayment of any Indebtedness (other than revolving Indebtedness) after the
first day of the relevant Calculation Period as if such Indebtedness had been
retired or redeemed on the first day of the relevant Calculation Period or (z)
the respective Permitted Acquisition, if any, then being consummated as well as
any other Permitted Acquisition consummated after the first day of the relevant
Calculation Period and on or prior to the date of the respective Permitted
Acquisition then being effected, as the case may be, with the following rules to
apply in connection therewith:
(i) all Indebtedness (x) (other than revolving
Indebtedness, except to the extent same is incurred to refinance other
outstanding Indebtedness or to finance a Permitted Acquisition)
incurred or issued after the first day of the relevant Calculation
Period (whether incurred to finance a Permitted Acquisition, to
refinance Indebtedness or otherwise) shall be deemed to have been
incurred or issued (and the proceeds thereof applied) on the first day
of the respective Calculation Period and remain outstanding through the
date of determination and (y) (other than revolving Indebtedness),
except to the extent accompanied by a corresponding permanent
commitment reduction) permanently retired or redeemed after the first
day of the relevant Calculation Period shall be deemed to have been
retired or redeemed on the first day of the respective Calculation
Period and remain retired through the date of determination;
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(ii) all Indebtedness assumed to be outstanding pursuant
to preceding clause (i) shall be deemed to have borne interest at (x)
the rate applicable thereto, in the case of fixed rate indebtedness or
(y) at the rate which would have been applicable thereto on the last
day of the respective Calculation Period, in the case of floating rate
Indebtedness (although interest expense with respect to any
Indebtedness for periods while same was actually outstanding during the
respective period shall be calculated using the actual rates applicable
thereto while same was actually outstanding); and
(iii) in making any determination of Consolidated EBITDA,
pro forma effect shall be given to any Permitted Acquisition
consummated during the periods described above, with such Consolidated
EBITDA to be determined as if such Permitted Acquisition was
consummated on the first day of the relevant Calculation Period, taking
into account factually supportable and identifiable cost savings and
expenses which would otherwise be permitted to be accounted for as an
adjustment pursuant to Article 11 of Regulation S-X under the
Securities Act, as if such cost savings or expenses were realized on
the first day of the respective Calculation Period.
"Projections" shall mean the projections that are contained in
the Confidential Information Memorandum dated March 2003 and that were prepared
by or on behalf of the Borrower in connection with the Transaction and delivered
to the Administrative Agent and the Lenders prior to the Effective Date.
"Qualified IPO" shall mean a bona fide underwritten sale to
the public of common stock of the Borrower pursuant to a registration statement
(other than on Form S-8 or any other form relating to securities issuable under
any benefit plan of the Borrower or any of its Subsidiaries, as the case may be)
that is declared effective by the SEC and such offering results in gross cash
proceeds to the Borrower (exclusive of underwriter's discount and commissions
and other expenses) of at least $75,000,000.
"Qualified Preferred Stock" shall mean any preferred stock of
the Borrower so long as the terms of any such preferred stock (i) do not contain
any mandatory put, redemption, repayment, sinking fund or other similar
provision, (ii) do not require the cash payment of dividends, (iii) do not
contain any covenants (other than financial reporting covenants), (iv) do not
grant the holders thereof any voting rights except for (x) voting rights
required to be granted to such holders under applicable law and (y) limited
customary voting rights on fundamental matters such as mergers, consolidations,
sales of all or substantially all of the assets of the Borrower, or liquidations
involving the Borrower, and (v) are otherwise reasonably satisfactory to the
Administrative Agent.
"Quarterly Payment Date" shall mean the last Business Day of
each September, December, March and June occurring after the Effective Date,
commencing on June 30, 2003.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any
of its Subsidiaries of any cash insurance proceeds or condemnation awards
payable (i) by reason of
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theft, loss, physical destruction, damage, taking or any other similar event
with respect to any property or assets of the Borrower or any of its
Subsidiaries and (ii) under any policy of insurance required to be maintained
under Section 8.03 (in either case, excluding any business interruption
insurance proceeds).
"Refinancing" shall mean (i) the repayment of all outstanding
loans and all other obligations (and the termination of all commitments) under
the Existing Credit Agreement, (ii) the consummation of the Existing Mezzanine
Subordinated Notes Redemption, and (iii) the satisfaction and discharge of the
Existing Senior Notes Indenture as part of the Existing Senior Notes Redemption,
in each case as described in Sections 5.07 and 8.18.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Release" shall mean actively or passively disposing,
discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting,
escaping, emptying, pouring, seeping, migrating or the like, into or upon any
land or water or air, or otherwise entering into the environment.
"Replaced Lender" shall have the meaning provided in Section
1.13.
"Replacement Lender" shall have the meaning provided in
Section 1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum
of whose outstanding Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Percentages of (x) outstanding
Swingline Loans and (y) Letter of Credit Outstandings) represent at least 50.1%
of the Total Revolving Loan Commitment less the Revolving Loan Commitments of
all Defaulting Lenders (or after the termination thereof, the sum of then total
outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate
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Percentages of all Non-Defaulting Lenders of the total outstanding Swingline
Loans and Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section
1.01(a).
"Revolving Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time or terminated pursuant to Sections 3.02, 3.03 and/or 10, as
applicable, or (y) adjusted from time to time as a result of assignments to or
from such Lender pursuant to Section 1.13 or 13.04(b).
"Revolving Loan Maturity Date" shall mean April 16, 2008.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"Rollover Amount" shall have the meaning provided in Section
9.07(b).
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term
in the respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in
Section 5.12.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Document" shall mean and include each of the
Security Agreement, the Pledge Agreement and, after the execution and delivery
thereof, each Additional Security Document.
"Seller Financing" shall mean Indebtedness of the Borrower or
a Subsidiary Guarantor issued as consideration to a seller of assets (including
equity) pursuant to a Permitted Acquisition.
"Senior Note Documents" shall mean the Senior Note Indenture,
the Senior Notes and each other document or agreement relating to the issuance
of the Senior Notes.
"Senior Note Indenture" shall mean the Indenture, dated as of
April 16, 2003, among the Borrower, the Subsidiary Guarantors and The Bank of
New York, as trustee
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thereunder, as in effect on the Effective Date and as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
"Senior Notes" shall mean the Borrower's 9-5/8% Senior Notes
due 2011 issued pursuant to the Senior Note Indenture (including all Additional
Senior Note Indebtedness).
"Senior Preferred Stock Repurchase" shall have the meaning
provided in Section 5.06.
"Senior Secured Leverage Ratio" shall mean, at any date of
determination, the ratio of Total Senior Secured Indebtedness on such date to
Consolidated EBITDA for the Test Period last ended on or prior to such date.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"Specified Default" shall mean any Default under Section 10.01
or 10.05.
"Stated Amount" of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Stockholders Agreement" shall mean the Amended and Restated
Shareholders Agreement, dated as of November 13, 1998, by and among BRS, the BRS
Investors, Farallon, Canterbury Detroit Partners, L.P., Canterbury Mezzanine
Capital, L.P., Rosewood Capital, L.P., the Management Investors and each other
shareholder of the Borrower party thereto, as the same may be amended, modified
or supplemented from time to time in accordance with the terms hereof and
thereof.
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.13.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
"Subsidiary Guarantor" shall mean each Domestic Subsidiary of
the Borrower and, to the extent required by Section 8.13, each Foreign
Subsidiary of the Borrower.
"Swingline Expiry Date" shall mean that date which is five
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Lender" shall mean DBTCA for so long as DBTCA is
the Administrative Agent hereunder and thereafter shall mean the successor
Administrative Agent in its individual capacity.
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"Swingline Loan" shall have the meaning provided in Section
1.01(b).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Swiss Clubs Sale" shall mean either (i) the sale of any or
all of the clubs owned by the Swiss Subsidiary on the Effective Date or (y) the
sale of all of the capital stock of the Swiss Subsidiary so long as the only
clubs included in such sale are those clubs owned by the Swiss Subsidiary on the
Effective Date (it being understood that, in the case of this clause (y), to the
extent that clubs other than those owned by the Swiss Subsidiary on the
Effective Date are included in such sale, the sale of such clubs shall only be
permitted to the extent such clubs could be sold at such time pursuant to (and
shall utilize the basket under) Section 9.02(iv)).
"Swiss Subsidiary" shall mean Town Sports, A.G., a corporation
organized under the laws of Switzerland and a Wholly-Owned Foreign Subsidiary of
the Borrower.
"Tax Benefit" shall have the meaning provided in Section
4.04(c).
"Tax Sharing Agreements" shall have the meaning provided in
Section 5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean each period of four consecutive
fiscal quarters of the Borrower then last ended (in each case taken as one
accounting period); provided, however, (i) for the purposes of determining
compliance with Section 9.08 for any Test Period ending on or prior to the
Borrower's fiscal quarter ending June 30, 2004, each such Test Period shall mean
the period from April 1, 2003 to the last day of the fiscal quarter of the
Borrower then last ended (in each case taken as one accounting period but
determined on a pro forma basis as if the Transaction had occurred on the first
day of the Borrower's fiscal quarter beginning April 1, 2003) and (ii) for
purposes of determining compliance with Sections 9.09 and 9.10, Consolidated
EBITDA for the fiscal quarters ended closest to June 30, 2002, September 30,
2002 and December 31, 2002 shall be $18,990,000, $18,280,000 and $18,024,000,
respectively.
"Total Leverage Ratio" shall mean, at any date of
determination, the ratio of Consolidated Indebtedness on such date to
Consolidated EBITDA for the Test Period last ended on or prior to such date.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Lenders at such time.
"Total Senior Secured Indebtedness" shall mean, at any time,
the aggregate amount of all Consolidated Indebtedness at such time that is
secured by any Lien on any asset of the Borrower or any of its Subsidiaries
(including, without limitation and duplication, all Loans, Letters of Credit,
Capitalized Lease Obligations, purchase money Indebtedness, secured Seller
Financing and items 1 and 2 on Schedule VII).
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less
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(y) the sum of the aggregate principal amount of all Revolving Loans and
Swingline Loans then outstanding plus the aggregate amount of all Letter of
Credit Outstandings.
"Transaction" shall mean, collectively, (i) the issuance of
the Senior Notes, (ii) the consummation of the Refinancing, (iii) the entering
into of the Credit Documents on the Effective Date and (iv) the payment of all
fees and expenses in connection with the foregoing.
"Transaction Expenses" shall mean all fees and expenses
incurred in connection with, and payable prior to or in connection with the
closing of, the Transaction and the transactions contemplated in connection with
the Transaction, including all closing fees paid to any of the Lenders and the
Administrative Agent hereunder, attorney's fees, accountants' fees, placement
agents' fees, discounts, commissions and brokerage fees and consultant fees.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated benefits
under the Plan as of the close of its most recent plan year exceeds the fair
market value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided in Section
2.05(a).
"Unutilized Revolving Loan Commitment" shall mean, with
respect to any Lender at any time, such Lender's Revolving Loan Commitment at
such time less the sum of (i) the aggregate outstanding principal amount of all
Revolving Loans made by such Lender at such time and (ii) such Lender's
Percentage of the Letter of Credit Outstandings at such time.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is also a Domestic
Subsidiary of such Person.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is also a Foreign
Subsidiary of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than, in the case of a
Foreign Subsidiary, director's qualifying shares and nominal amount of shares
held by local nationals, in each case to the extent required by applicable law)
is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries
of such Person and (ii) any partnership, limited liability company, association,
joint venture or other entity in which such Person and/or one or more
Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time. Unless otherwise indicated herein, or the context otherwise requires, all
references herein to any Wholly-Owned
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Subsidiary or Wholly-Owned Subsidiaries shall mean and be deemed to be
references to a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries, as the
case may be, of the Borrower.
SECTION 12. The Administrative Agent.
12.01 Appointment. The Lenders hereby irrevocably designate
and appoint DBTCA as Administrative Agent (for purposes of this Section 12 and
Section 13.01, the term "Administrative Agent" also shall include (x) DBTCA in
its capacity as Collateral Agent pursuant to the Security Documents and (y)
Deutsche Bank Securities Inc., an affiliate of DBTCA, in its capacity as a Joint
Lead Arranger and Book Manager in connection with this Agreement and the
financings contemplated hereby) to act as specified herein and in the other
Credit Documents. Each Lender hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Administrative Agent to take such action on its behalf under the
provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The
Administrative Agent may perform any of its respective duties hereunder by or
through its officers, directors, agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Administrative Agent
nor any of its officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision). The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Lender or the holder
of any Note; and nothing in this Agreement or in any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent.
Independently and without reliance upon the Administrative Agent, each Lender
and the holder of each Note, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of the Borrower and its Subsidiaries in connection with
the making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of the Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document,
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certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower or any of its Subsidiaries
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of the Borrower or any of
its Subsidiaries or the existence or possible existence of any Default or Event
of Default.
12.04 Certain Rights of the Administrative Agent. If the
Administrative Agent requests instructions from the Required Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders;
and the Administrative Agent shall not incur liability to any Lender by reason
of so refraining. Without limiting the foregoing, neither any Lender nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders.
12.05 Reliance. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and thereunder,
upon advice of counsel selected by the Administrative Agent.
12.06 Indemnification. To the extent the Administrative
Agent (or any affiliate thereof) is not reimbursed and indemnified by the
Borrower, the Lenders will reimburse and indemnify the Administrative Agent (and
any affiliate thereof) in proportion to their respective "percentage" as used in
determining the Required Lenders (determined as if there were no Defaulting
Lenders) for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature (including, without limitation, any customary
indemnifications provided to a deposit account bank pursuant to a "control
agreement" referred to in the Security Agreement) which may be imposed on,
asserted against or incurred by the Administrative Agent (or any affiliate
thereof) in performing its duties hereunder or under any other Credit Document
(including with respect to any agreements or other instruments referred to
herein or therein) or in any way relating to or arising out of this Agreement or
any other Credit Document; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's (or such affiliate's) gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
12.07 The Administrative Agent in its Individual Capacity.
With respect to its obligation to make Loans, or issue or participate in Letters
of Credit, under this Agreement, the Administrative Agent shall have the rights
and powers specified herein for a "Lender" and may
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exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Lender," "Required Lenders," "holders of Notes"
or any similar terms shall, unless the context clearly indicates otherwise,
include the Administrative Agent in its respective individual capacities. The
Administrative Agent and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, investment banking, trust or other
business with, or provide debt financing, equity capital or other services
(including financial advisory services) to any Credit Party or any Affiliate of
any Credit Party (or any Person engaged in a similar business with any Credit
Party or any Affiliate thereof) as if they were not performing the duties
specified herein, and may accept fees and other consideration from any Credit
Party or any Affiliate of any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.
12.08 Holders. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its respective
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days' prior written notice to the Lenders and, unless
a Default or an Event of Default under Section 10.05 then exists, the Borrower.
Any such resignation by an Administrative Agent hereunder shall also constitute
its resignation as an Issuing Lender and the Swingline Lender, in which case the
resigning Administrative Agent (x) shall not be required to issue any further
Letters of Credit or make any additional Swingline Loans hereunder and (y) shall
maintain all of its rights as Issuing Lender or Swingline Lender, as the case
may be, with respect to any Letters of Credit issued by it, or Swingline Loans
made by it, in either case, prior to the date of such resignation. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation by the
Administrative Agent, the Required Lenders shall appoint a successor
Administrative Agent hereunder or thereunder who shall be a commercial bank or
trust company reasonably acceptable to the Borrower, which acceptance shall not
be unreasonably withheld or delayed (provided that the Borrower's approval shall
not be required if an Event of Default then exists).
(c) If a successor Administrative Agent shall not have
been so appointed within such 15 Business Day period, the Administrative Agent,
with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed, provided that the Borrower's consent shall not be required
if an Event of Default then exists), shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above.
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(d) If no successor Administrative Agent has been
appointed pursuant to clause (b) or (c) above by the 20th Business Day after the
date such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Lenders shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
(e) Upon a resignation of the Administrative Agent
pursuant to this Section 12.09, the Administrative Agent shall remain
indemnified to the extent provided in this Agreement and the other Credit
Documents and the provisions of this Section 12 shall continue in effect for the
benefit of the Administrative Agent for all of its actions and inactions while
serving as the Administrative Agent.
12.10 Syndication Agent and Documentation Agents.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Credit Document, neither BNP Paribas solely in its
capacity as Syndication Agent hereunder nor CIT Lending Services Corporation nor
Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services
Inc., solely in their respective capacities as Co-Documentation Agents
hereunder, shall have any duties or responsibilities under the Credit Documents,
nor shall any such Person have or be deemed to have any fiduciary relationship
with any Lender in respect of the Credit Documents, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Credit Document or otherwise exist against any
such Person in respect of such capacities.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower hereby agrees
to: (i) whether or not the transactions herein contemplated are consummated, pay
all reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of White &
Case LLP and the Administrative Agent's other counsel and consultants) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the Administrative Agent in connection with its syndication efforts and
administration functions with respect to this Agreement and of the
Administrative Agent and, after the occurrence of an Event of Default, each of
the Issuing Lenders and Lenders in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings
(including, in each case without limitation, the reasonable fees and
disbursements of counsel and consultants for the Administrative Agent and, after
the occurrence of an Event of Default, counsel for each of the Issuing Lenders
and Lenders); (ii) pay and hold the Administrative Agent, each of the Issuing
Lenders and each of the Lenders harmless from and against any and all present
and future stamp, excise and other similar documentary taxes with respect to the
foregoing matters and save the Administrative Agent, each of the Issuing Lenders
and each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to the
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Administrative Agent, such Issuing Lender or such Lender) to pay such taxes; and
(iii) indemnify the Administrative Agent, each Issuing Lender and each Lender,
and each of their respective officers, directors, employees, representatives,
agents, affiliates, trustees and investment advisors from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Administrative Agent, any Issuing Lender or any Lender is a party thereto
and whether or not such investigation, litigation or other proceeding is brought
by or on behalf of any Credit Party) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
the Transaction or any other transactions contemplated herein or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, or (b) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property at any time owned, leased or operated
by the Borrower or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials by the Borrower or
any of its Subsidiaries at any location, whether or not owned, leased or
operated by the Borrower or any of its Subsidiaries, the non-compliance by the
Borrower or any of its Subsidiaries with any Environmental Law (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Borrower, any of its Subsidiaries or
any Real Property at any time owned, leased or operated by the Borrower or any
of its Subsidiaries, including, in each case, without limitation, the reasonable
fees and disbursements of counsel and other consultants incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified (as determined by a court of competent jurisdiction in a final and
non-appealable decision)). To the extent that the undertaking to indemnify, pay
or hold harmless the Administrative Agent, any Issuing Lender or any Lender set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, the Borrower shall make the maximum contribution to
the payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent, each Issuing Lender and each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit Party or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by the Administrative Agent, such
Issuing Lender or such Lender (including, without limitation, by branches and
agencies of the Administrative Agent, such Issuing Lender or such Lender
wherever located) to or for the credit or the account of the Borrower or any of
its Subsidiaries against and on account of the Obligations and liabilities of
the Credit Parties to the Administrative Agent, such Issuing Lender or such
Lender under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations purchased
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by such Lender pursuant to Section 13.06(b), and all other claims of any nature
or description arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not the Administrative Agent, such
Issuing Lender or such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
13.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, telecopier or cable communication) and
mailed, telegraphed, telexed, telecopied, cabled or delivered: if to any Credit
Party, at the address specified opposite its signature below or in the other
relevant Credit Documents; if to any Lender, at its address specified on
Schedule II; and if to the Administrative Agent, at the Notice Office; or, as to
any Credit Party or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties hereto and, as
to each Lender, at such other address as shall be designated by such Lender in a
written notice to the Borrower and the Administrative Agent. All such notices
and communications shall, when mailed, telegraphed, telexed, telecopied, or
cabled or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to (x) each Lender in the case of Sections 1.01(c), 1.03(a) and
2.04(c) and (y) the Administrative Agent and the Borrower (in either case) shall
not be effective until received by such Lender, the Administrative Agent or the
Borrower, as the case may be.
13.04 Benefit of Agreement; Assignments; Participations.
(a) This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
provided, however, the Borrower may not assign or transfer any of its rights,
obligations or interest hereunder or under the other Credit Documents without
the prior written consent of the Lenders and, provided further, that, although
any Lender may transfer, assign or grant participations in its rights hereunder,
such Lender shall remain a "Lender" for all purposes hereunder (and may not
transfer or assign all or any portion of its Revolving Loan Commitment hereunder
except as provided in Sections 1.13 and 13.04(b)) and the transferee, assignee
or participant, as the case may be, shall not constitute a "Lender" hereunder
and, provided further, that no Lender shall transfer or grant any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final scheduled maturity of any
Revolving Loan, Note or Letter of Credit (unless such Letter of Credit is not
extended beyond the Revolving Loan Maturity Date) in which such participant is
participating, or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof
(it being understood that any amendment or modification to the financial
definitions in this Agreement or to Section 13.07(a) shall not constitute a
reduction in the rate of interest or Fees payable hereunder), or increase the
amount of the participant's participation over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Revolving Loan Commitment shall not constitute
a change in the terms of such participation, and that an increase in the
Revolving Loan Commitment (or the available portion thereof) or Revolving Loan
shall be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights
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and obligations under this Agreement or (iii) release all or substantially all
of the Collateral under all of the Security Documents (except as expressly
provided in the Credit Documents) supporting the Loans or Letters of Credit
hereunder in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant's rights against such Lender
in respect of such participation to be those set forth in the agreement executed
by such Lender in favor of the participant relating thereto) and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any
Lender together with one or more other Lenders) may (x) assign all or a portion
of its Revolving Loan Commitment and related outstanding Obligations hereunder
to (i)(A) its parent company and/or any affiliate of such Lender which is at
least 50% owned by such Lender or its parent company or (B) to one or more other
Lenders or any affiliate of any such other Lender which is at least 50% owned by
such other Lender or its parent company (provided that any fund that invests in
loans and is managed or advised by the same investment advisor of another fund
which is a Lender (or by an Affiliate of such investment advisor) shall be
treated as an affiliate of such other Lender for the purposes of this sub-clause
(x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests in
loans, any other fund that invests in loans and is managed or advised by the
same investment advisor of any Lender or by an Affiliate of such investment
advisor or (y) assign all, or if less than all, a portion equal to at least
$1,000,000 in the aggregate for the assigning Lender or assigning Lenders, of
such Revolving Loan Commitment and related outstanding Obligations hereunder to
one or more Eligible Transferees (treating any fund that invests in loans and
any other fund that invests in loans and is managed or advised by the same
investment advisor of such fund or by an Affiliate of such investment advisor as
a single Eligible Transferee), each of which assignees shall become a party to
this Agreement as a Lender by execution of an Assignment and Assumption
Agreement, provided that (i) at such time, Schedule I shall be deemed modified
to reflect the Revolving Loan Commitments and/or outstanding Revolving Loans, as
the case may be, of such new Lender and of the existing Lenders, (ii) upon the
surrender of the relevant Revolving Notes by the assigning Lender (or, upon such
assigning Lender's indemnifying the Borrower for any lost Revolving Note
pursuant to a customary indemnification agreement) new Revolving Notes will be
issued, at the Borrower's expense, to such new Lender and to the assigning
Lender upon the request of such new Lender or assigning Lender, such new
Revolving Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised Revolving
Loan Commitments and/or outstanding Revolving Loans, as the case may be, (iii)
the consent of the Administrative Agent and, so long as no Default or Event of
Default then exists, the consent of the Borrower in each case shall be required
in connection with any such assignment pursuant to clause (y) above (each of
which consents shall not be unreasonably withheld or delayed), (iv) the
Administrative Agent shall receive at the time of each such assignment, from the
assigning or assignee Lender, the payment of a non-refundable assignment fee of
$3,500 and (v) no such transfer or assignment will be effective until recorded
by the Administrative Agent on the Register pursuant to Section 13.15. To the
extent of any assignment pursuant to this Section 13.04(b), the assigning Lender
shall be relieved of its obligations hereunder with respect to its assigned
Revolving Loan Commitment and outstanding Revolving Loans. At the time of each
assignment pursuant to this Section 13.04(b) to a Person which is not already a
Lender hereunder and which is not a United States person (as such term is
defined in Section 7701(a)(30) of the
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Code) for U.S. federal income tax purposes, the respective assignee Lender
shall, to the extent legally entitled to do so, provide to the Borrower the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Lender's Revolving Loan Commitment and
related outstanding Obligations pursuant to Section 1.13 or this Section
13.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10, 2.06 or 4.04 from those being charged by the respective assigning
Lender prior to such assignment, then the Borrower shall not be obligated to pay
such increased costs (although the Borrower, in accordance with and pursuant to
the other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit
any Lender from pledging its Revolving Loans and Revolving Notes hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank and, with prior notification to the Administrative Agent
(but without the consent of the Administrative Agent or the Borrower), any
Lender which is a fund may pledge all or any portion of its Revolving Loans and
Revolving Notes to its trustee or to a collateral agent providing credit or
credit support to such Lender in support of its obligations to such trustee,
such collateral agent or a holder of such obligations, as the case may be. No
pledge pursuant to this clause (c) shall release the transferor Lender from any
of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay
on the part of the Administrative Agent, the Collateral Agent, any Issuing
Lender or any Lender in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between the Borrower or
any other Credit Party and the Administrative Agent, the Collateral Agent, any
Issuing Lender or any Lender shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Administrative Agent, the Collateral Agent, any Issuing Lender or any
Lender would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender to
any other or further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided
in this Agreement, the Administrative Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
Obligations hereunder, the Administrative Agent shall distribute such payment to
the Lenders entitled thereto (other than any Lender that has consented in
writing to waive its pro rata share of any such payment) pro rata based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Lenders agrees that, if it should receive
any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of
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setoff or banker's lien, by counterclaim or cross action, by the enforcement of
any right under the Credit Documents, or otherwise), which is applicable to the
payment of the principal of, or interest on, the Loans, Unpaid Drawings,
Commitment Commission or Letter of Credit Fees, of a sum which with respect to
the related sum or sums received by other Lenders is in a greater proportion
than the total of such Obligation then owed and due to such Lender bears to the
total of such Obligation then owed and due to all of the Lenders immediately
prior to such receipt, then such Lender receiving such excess payment shall
purchase for cash without recourse or warranty from the other Lenders an
interest in the Obligations of the respective Credit Party to such Lenders in
such amount as shall result in a proportional participation by all the Lenders
in such amount; provided that if all or any portion of such excess amount is
thereafter recovered from such Lenders, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding Sections 13.06(a) and (b) shall be
subject to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting
Lenders.
13.07 Calculations; Computations. (a) The financial
statements to be furnished to the Lenders pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Lenders); provided that, (i) except as otherwise specifically
provided herein, all computations and all definitions (including accounting
terms) used in determining compliance with Sections 8.16 and 9.07 through 9.10,
inclusive, shall utilize generally accepted accounting principles and policies
in conformity with those used to prepare the December 31, 2002 year-end
historical financial statements of the Borrower and its Subsidiaries referred to
in Section 7.05(a), (ii) to the extent expressly provided herein, certain
calculations shall be made on a Pro Forma Basis, and (iii) for the period from
the Effective Date through and including the earlier of the Existing Senior
Notes Redemption Date and the 30th day following the Effective Date, all
computations and all definitions (including accounting terms) used in
determining compliance with Sections 8.16 and 9.08 through 9.10, inclusive,
shall be calculated as if the Existing Senior Notes were not outstanding and as
if there was no interest expense associated therewith.
(b) All computations of interest, Commitment Commission
and other Fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day;
except that in the case of Letter of Credit Fees and Facing Fees, the last day
shall be included) occurring in the period for which such interest, Commitment
Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY
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BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY
OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT
SUCH COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER
AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER
ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT,
ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
HOLDINGS OR THE BORROWER IN ANY OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the
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same instrument. A set of counterparts executed by all the parties hereto shall
be lodged with the Borrower and the Administrative Agent.
13.10 Effectivene Section This Agreement shall become
effective on the date (the "Effective Date") on which (i) the Borrower, the
Administrative Agent and each of the Lenders shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same to the Administrative Agent at the Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written or telex notice (actually received) at such office that the
same has been signed and mailed to it and (ii) the conditions contained in
Section 5 are met to the satisfaction of the Administrative Agent and the
Required Lenders. Unless the Administrative Agent has received actual notice
from any Lender that the conditions described in clause (ii) of the preceding
sentence have not been met to its satisfaction, upon the satisfaction of the
condition described in clause (i) of the immediately preceding sentence and upon
the Administrative Agent's good faith determination that the conditions
described in clause (ii) of the immediately preceding sentence have been met,
then the Effective Date shall have deemed to have occurred. The Administrative
Agent will give the Borrower and each Lender prompt written notice of the
occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party hereto
or thereto and the Required Lenders (although additional parties may be added to
(and annexes may be modified to reflect such additions), and Subsidiaries of the
Borrower may be released from, the Subsidiaries Guaranty and the Security
Documents in accordance with the provisions hereof and thereof without the
consent of the other Credit Parties party thereto or the Required Lenders),
provided that no such change, waiver, discharge or termination shall, without
the consent of each Lender (other than a Defaulting Lender) (with Obligations
being directly affected in the case of following clause (i)), (i) extend the
final scheduled maturity of any Loan or Note or extend the stated expiration
date of any Letter of Credit beyond the Revolving Loan Maturity Date, or reduce
the rate or extend the time of payment of interest or Fees thereon (except in
connection with the waiver of applicability of any post-default increase in
interest rates), or reduce the principal amount thereof (it being understood
that any amendment or modification to the financial definitions in this
Agreement or to Section 13.07(a) shall not constitute a reduction in the rate of
interest or Fees for the purposes of this clause (i)), (ii) release all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents) under all the Security Documents, (iii) amend, modify or waive any
provision of this Section 13.12 (except for technical amendments with respect to
additional extensions of credit pursuant to this Agreement which afford the
protections to such additional extensions of credit of the type provided to the
Revolving Loan Commitments on the Effective Date), (iv) reduce the percentage
specified in the definition of Required Lenders (it being understood that, with
the consent of the Required Lenders, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the extensions of Revolving Loan Commitments are
included on
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the Effective Date) or (v) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement; provided further,
that no such change, waiver, discharge or termination shall (1) increase the
Revolving Loan Commitment of any Lender over the amount thereof then in effect
without the consent of such Lender (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Revolving Loan Commitment shall not
constitute an increase of the Revolving Loan Commitment of any Lender, and that
an increase in the available portion of any Revolving Loan Commitment of any
Lender shall not constitute an increase of the Revolving Loan Commitment of such
Lender), (2) without the consent of each Issuing Lender, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (3) without the consent of the Swingline Lender, alter the
Swingline Lender's rights or obligations with respect to Swingline Loans, (4)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the rights or
obligations of the Administrative Agent, or (5) without the consent of
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination of any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), 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 the Borrower shall have the right, so long as all non-consenting
Lenders whose individual consent is required are treated as described in either
clauses (A) or (B) below, to either (A) replace each such non-consenting Lender
or Lenders with one or more Replacement Lenders pursuant to Section 1.13 so long
as at the time of such replacement, each such Replacement Lender consents to the
proposed change, waiver, discharge or termination or (B) terminate such
non-consenting Lender's Revolving Loan Commitment and/or repay the outstanding
Revolving Loans of such Lender in accordance with Sections 3.02(b) and/or
4.01(b), provided that, unless the Revolving Loan Commitments that are
terminated, and Loans repaid, pursuant to preceding clause (B) are immediately
replaced in full at such time through the addition of new Lenders or the
increase of the Revolving Loan Commitments and/or outstanding Revolving Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Required Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto, provided further, that in any event the Borrower shall not have
the right to replace a Lender, terminate its Revolving Loan Commitment or repay
its Revolving Loans solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender) pursuant to the
further proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Obligations.
13.14 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 13.14 would, at the
time of such transfer, result in increased costs under Section 1.10, 1.11, 2.06
or 4.04 from those being charged by the respective Lender prior to such
transfer, then
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the Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Register. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this Section
13.15, to maintain a register (the "Register") on which it will record the
Revolving Loan Commitment from time to time of each of the Lenders, the
Revolving Loans made by each of the Lenders and each repayment in respect of the
principal amount of the Revolving Loans of each Lender. Failure to make any such
recordation, or any error in such recordation, shall not affect the Borrower's
obligations in respect of such Revolving Loans. With respect to any Lender, the
transfer of the Revolving Loan Commitment of such Lender and the rights to the
principal of, and interest on, any Revolving Loan made pursuant to such
Revolving Loan Commitment shall not be effective until such transfer is recorded
on the Register maintained by the Administrative Agent with respect to ownership
of such Revolving Loan Commitment and Revolving Loans and prior to such
recordation all amounts owing to the transferor with respect to such Revolving
Loan Commitments and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Revolving Loan
Commitments and Revolving Loans shall be recorded by the Administrative Agent on
the Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Revolving Loan, or as soon thereafter
as practicable, the assigning or transferor Lender shall surrender the Revolving
Note (if any) evidencing such Revolving Loan, and thereupon one or more new
Revolving Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Lender and/or the new Lender at the request of any such
Lender. The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing its duties under this Section 13.15, provided that the
Borrower will not be liable for any portion of such losses, claims, damages or
liabilities to the extent resulting from the Administrative Agent's gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).
13.16 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 13.16, each Lender agrees that it will not disclose
without the prior consent of the Borrower (other than to its employees,
auditors, advisors or counsel or to another Lender if such Lender or such
Lender's holding or parent company in its sole discretion determines that any
such party should have access to such information, provided such Persons shall
be subject to the provisions of this Section 13.16 to the same extent as such
Lender) any information with respect to the Borrower or any of its Subsidiaries
which is now or in the future furnished pursuant to this Agreement or any other
Credit Document, provided that any Lender may disclose any such information (i)
as has become generally available to the public other than by virtue of a breach
of this Section 13.16(a) by the respective Lender, (ii) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or
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elsewhere) or their successors, (iii) as may be required or appropriate in
respect to any summons or subpoena or in connection with any litigation, (iv) in
order to comply with any law, order, regulation or ruling applicable to such
Lender, (v) to the Administrative Agent or the Collateral Agent, (vi) to any
direct or indirect contractual counterparty in any swap, hedge or similar
agreement (or to any such contractual counterparty's professional advisor), so
long as such contractual counterparty (or such professional advisor) agrees to
be bound by the provisions of this Section 13.16, and (vii) to any prospective
or actual transferee or participant in connection with any contemplated transfer
or participation of any of the Notes or Revolving Loan Commitments or any
interest therein by such Lender otherwise permitted by this Agreement, provided
that such prospective transferee agrees to be bound by the confidentiality
provisions contained in this Section 13.16.
(b) The Borrower hereby acknowledges and agrees that each
Lender may share with any of its affiliates, and such affiliates may share with
such Lender, any information related to the Borrower or any of its Subsidiaries
(including, without limitation, any non-public customer information regarding
the creditworthiness of the Borrower and its Subsidiaries), provided such
Persons shall be subject to the provisions of this Section 13.16 to the same
extent as such Lender.
(c) Neither the Administrative Agent nor the Lenders
provide accounting, tax or legal advice. Notwithstanding any express or implied
claims of exclusivity or proprietary rights, each Credit Party, each Lender and
the Administrative Agent hereby agree and acknowledge that each Credit Party,
each Lender and the Administrative Agent (and each of their employees,
representatives or other agents) are authorized to disclose to any and all
Persons, beginning immediately upon commencement of their discussions with
respect to the transactions contemplated by this Agreement and the other Credit
Documents and without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and the other
Credit Documents, and all materials of any kind (including opinions or other tax
analyses) that are provided to each Credit Party, each Lender and the
Administrative Agent relating to such tax treatment and tax structure. In this
regard, each Credit Party, each Lender and the Administrative Agent acknowledge
and agree that the disclosure of the tax treatment and tax structure of the
transactions contemplated by this Agreement and the other Credit Documents is
not limited in any way by an express or implied understanding or agreement, oral
or written (whether or not such understanding or agreement is legally binding).
For purposes of this authorization, "tax" means United States Federal income
tax, "tax treatment" means the purported or claimed Federal income tax treatment
of the transaction, and "tax structure" means any fact that may be relevant to
understanding the purported or claimed Federal income tax treatment of the
transaction. This Section 13.16(c) is intended to reflect the understanding of
each Credit Party, each Lender and the Administrative Agent that no transaction
contemplated by this Agreement or any other Credit Document is a "confidential
transaction" as that phrase is used in Treasury Regulation Section
1.6011-4(b)(3)(i), and shall be interpreted in a manner consistent therewith.
Nothing herein is intended to imply that any of the Credit Parties, the Lenders
or the Administrative Agent made or provided a statement, oral or written, to,
or for the benefit of, any of each other as to the potential tax consequences
that are related to, or may result from the transactions contemplated by, this
Agreement or any other Credit Document. Each Credit Party, each Lender and the
Administrative Agent confirms that none of the other parties to this Agreement
or any other Credit Document has made or provided
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to it, or for its benefit, any oral or written statement as to any potential tax
consequences that are related to, or may result from, the transaction.
13.17 Existing Senior Notes. Notwithstanding anything to
the contrary contained in this Agreement, for the 30 day period following the
Effective Date (or, if sooner, through the Existing Senior Notes Redemption
Date), the representation and warranty set forth in Section 7.03(ii) will not be
breached, and no Default or Event of Default under Sections 8.09 and 10.04 will
occur, in either case solely as a result of any technical violation of the
Existing Senior Notes Indenture as a result of the consummation of the
Transaction; it being understood and agreed, however, that the provisions of
this Section 13.17 shall cease to be effective, and any breach of any such
representation or warranty and any such Default or Event of Default (in each
case) shall automatically occur after the earlier of the dates set forth above
in this Section 13.17 to the extent that the Existing Senior Notes Indenture has
not been satisfied and discharged on such earlier date in accordance with the
terms thereof and hereof.
13.18 Town Sports AG Stock Certificates. Notwithstanding
anything to the contrary contained in this Agreement or in the Pledge Agreement,
the Borrower shall have until 180 days following the Effective Date to deliver
to the Collateral Agent the stock certificates (and related stock powers)
representing 65% of the total voting power of Town Sports AG.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
888 Seventh Avenue TOWN SPORTS INTERNATIONAL, INC.
25th Floor
New York, New York 10106 By: /s/ Richard Pyle
Attention: Richard Pyle ------------------------
Title: Chief Financial Officer
Tel. No.: (212) 246-6700
Fax No.: (212) 664-8906 DEUTSCHE BANK TRUST COMPANY
AMERICAS, Individually and as
Administrative Agent
By: /s/ Mary Kay Coyle
------------------------
Title: Managing Director
BNP PARIBAS
By: /s/ Kathryn B. Swintak
------------------------
Title: Head of Merchant Banking
of North America
By: /s/ Michael Finkelman
------------------------
Title: Managing Director
CIT LENDING SERVICES CORPORATION
By: /s/ John P. Sirico, II
-------------------------
Title: Vice President
MERRILL LYNCH CAPITAL , a division of
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.
By: /s/ Francois Delangle
-------------------------
Title: Vice President
SCHEDULE I
COMMITMENTS
Revolving Loan
Lender Commitment
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Deutsche Bank Trust Company
Americas $12,500,000
BNP Paribas $12,500,000
CIT Lending Services Corporation $12,500,000
Merrill Lynch Capital, a division of
Merrill Lynch Business Financial
Services Inc. $12,500,000
TOTAL: $50,000,000
SCHEDULE II
LENDER ADDRESSES
Lender Address
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Deutsche Bank Trust Company Americas 31 West 52nd Street
New York, New York 10019
Attention: Carin Grisafi
Telephone: (646) 324-2201
Telecopier No.: (646) 324-7456
BNP Paribas 787 Seventh Avenue
New York, New York 10019
Attention: Michael Finkelman
Telephone: (212) 841-3067
Telecopier No.: (212) 841-3065
CIT Lending Service Corporation c/o CIT Group Inc.
Business Credit/Corporate Finance Group
1 CIT Drive
3rd Floor
Livingston, New Jersey 07039
Attention: Mark S O'Keeffe
Telephone: (973) 740-5541
Telecopier No.: (973) 740-5721
Merrill Lynch Capital, a division of Merrill Lynch 225 Liberty Street
Business Financial Services Inc. 5th Floor
New York, New York 10281
Attention: Francois Delangle
Telephone: (212) 236-4651
Telecopier No.: (212) 236-0048
SCHEDULE III
EXISTING LETTERS OF CREDIT
SCHEDULE IV
REAL PROPERTY
SCHEDULE V
PLANS
SCHEDULE VI
SUBSIDIARIES
SCHEDULE VII
EXISTING INDEBTEDNESS
SCHEDULE VIII
INSURANCE
SCHEDULE IX
LEGAL NAMES, TYPE OF ORGANIZATION (AND WHETHER A REGISTERED
ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC.
SCHEDULE X
EXISTING LIENS
SCHEDULE XI
EXISTING INVESTMENTS