EXECUTION COPY
EXHIBIT 10.62
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ALLIANCE LAUNDRY HOLDINGS LLC
ALLIANCE LAUNDRY SYSTEMS LLC
_________________________________________________
$238,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 2, 2002
________________________________________________
LEHMAN BROTHERS INC.,
as Sole Advisor, Sole Lead Arranger and Sole Bookrunner
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent
FLEET NATIONAL BANK
and
LASALLE BANK NATIONAL ASSOCIATION,
as Documentation Agents
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
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TABLE OF CONTENTS
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TABLE OF CONTENTS..................................................................... i
SECTION 1. DEFINITIONS................................................................ 1
1.1 Defined Terms.......................................................... 1
1.2 Other Definitional Provisions.......................................... 30
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................................ 30
2.1 Term Loan Commitments.................................................. 30
2.2 Procedure for Term Loan Borrowing...................................... 30
2.3 Repayment of Term Loans................................................ 31
2.4 Revolving Credit Commitments........................................... 31
2.4A Revolving Credit Commitment Increases.................................. 32
2.5 Procedure for Revolving Credit Borrowing............................... 33
2.6 Swing Line Commitment.................................................. 34
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans...... 35
2.8 Repayment of Loans; Evidence of Debt................................... 36
2.9 Commitment Fees, etc................................................... 37
2.10 Termination or Reduction of Revolving Credit Commitments............... 37
2.11 Optional Prepayments................................................... 38
2.12 Mandatory Prepayments and Commitment Reductions........................ 38
2.13 Conversion and Continuation Options.................................... 39
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.............. 40
2.15 Interest Rates and Payment Dates....................................... 40
2.16 Computation of Interest and Fees....................................... 41
2.17 Inability to Determine Interest Rate................................... 41
2.18 Pro Rata Treatment and Payments........................................ 42
2.19 Requirements of Law.................................................... 44
2.20 Taxes.................................................................. 45
2.21 Indemnity.............................................................. 47
2.22 Illegality............................................................. 48
2.23 Change of Lending Office............................................... 48
2.24 Replacement of Lenders under Certain Circumstances..................... 48
SECTION 3. LETTERS OF CREDIT.......................................................... 49
3.1 L/C Commitment......................................................... 49
3.2 Procedure for Issuance of Letter of Credit............................. 50
3.3 Fees and Other Charges................................................. 50
3.4 L/C Participations..................................................... 51
3.5 Reimbursement Obligation of the Borrower............................... 52
3.6 Obligations Absolute................................................... 53
3.7 Letter of Credit Payments.............................................. 54
3.8 Applications........................................................... 54
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SECTION 4. REPRESENTATIONS AND WARRANTIES............................................. 54
4.1 Financial Condition.................................................... 54
4.2 No Change.............................................................. 55
4.3 Existence; Compliance with Law......................................... 55
4.4 Power; Authorization; Enforceable Obligations.......................... 55
4.5 No Legal Bar........................................................... 56
4.6 No Material Litigation................................................. 56
4.7 No Default............................................................. 56
4.8 Ownership of Property; Liens........................................... 56
4.9 Intellectual Property.................................................. 56
4.10 Taxes.................................................................. 57
4.11 Federal Regulations.................................................... 57
4.12 Labor Matters.......................................................... 57
4.13 ERISA.................................................................. 58
4.14 Investment Company Act; Other Regulations.............................. 58
4.15 Subsidiaries........................................................... 58
4.16 Use of Proceeds........................................................ 58
4.17 Environmental Matters.................................................. 58
4.18 Accuracy of Information, etc........................................... 60
4.19 Security Documents..................................................... 60
4.20 Solvency............................................................... 61
4.21 Senior Indebtedness.................................................... 61
4.22 Regulation H........................................................... 61
SECTION 5. CONDITIONS PRECEDENT....................................................... 61
5.1 Conditions to Initial Extension of Credit.............................. 61
5.2 Conditions to Each Extension of Credit................................. 64
SECTION 6. AFFIRMATIVE COVENANTS...................................................... 65
6.1 Financial Statements................................................... 65
6.2 Certificates; Other Information........................................ 66
6.3 Payment of Obligations................................................. 67
6.4 Conduct of Business and Maintenance of Existence, etc.................. 68
6.5 Maintenance of Property; Insurance..................................... 68
6.6 Inspection of Property; Books and Records; Discussions................. 68
6.7 Notices................................................................ 68
6.8 Environmental Laws..................................................... 69
6.9 Interest Rate Protection............................................... 69
6.10 Additional Collateral, etc............................................. 69
6.11 Further Assurances..................................................... 71
SECTION 7. NEGATIVE COVENANTS......................................................... 72
7.1 Financial Condition Covenants.......................................... 72
7.2 Limitation on Indebtedness............................................. 73
7.3 Limitation on Liens.................................................... 76
7.4 Limitation on Fundamental Changes...................................... 78
7.5 Limitation on Disposition of Property.................................. 79
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7.6 Limitation on Restricted Payments................................................. 81
7.7 Limitation on Capital Expenditures................................................ 82
7.8 Limitation on Investments......................................................... 83
7.9 Limitation on Optional Payments and Modifications of Debt Instruments............. 85
7.10 Limitation on Transactions with Affiliates........................................ 86
7.11 Limitation on Sales and Leasebacks................................................ 87
7.12 Limitation on Changes in Fiscal Periods........................................... 87
7.13 Limitation on Negative Pledge Clauses............................................. 87
7.14 Limitation on Restrictions on Subsidiary Distributions............................ 88
7.15 Limitation on Lines of Business................................................... 88
7.16 Limitation on Amendments to Recapitalization Documents............................ 89
7.17 Limitation on Activities of Holdings and Alliance Laundry Corporation............. 89
SECTION 8. EVENTS OF DEFAULT.................................................................. 89
SECTION 9. THE AGENTS ....................................................................... 93
9.1 Appointment....................................................................... 93
9.2 Delegation of Duties.............................................................. 93
9.3 Exculpatory Provisions............................................................ 94
9.4 Reliance by the Agents............................................................ 94
9.5 Notice of Default................................................................. 95
9.6 Non-Reliance on Agents and Other Lenders.......................................... 95
9.7 Indemnification................................................................... 95
9.8 Agent in Its Individual Capacity.................................................. 96
9.9 Successor Administrative Agent.................................................... 96
9.10 Authorization to Release Liens.................................................... 97
9.11 The Arranger...................................................................... 97
9.12 The Administrative Agent and the Secured Parties.................................. 97
SECTION 10. MISCELLANEOUS..................................................................... 97
10.1 Amendments and Waivers............................................................ 97
10.2 Notices........................................................................... 98
10.3 No Waiver; Cumulative Remedies.................................................... 100
10.4 Survival of Representations and Warranties........................................ 100
10.5 Payment of Expenses............................................................... 100
10.6 Successors and Assigns; Participations and Assignments............................ 101
10.7 Adjustments; Set-off.............................................................. 104
10.8 Counterparts...................................................................... 104
10.9 Severability...................................................................... 105
10.10 Integration....................................................................... 105
10.11 GOVERNING LAW..................................................................... 105
10.12 Submission To Jurisdiction; Waivers............................................... 105
10.13 Acknowledgments................................................................... 106
10.14 Confidentiality................................................................... 106
10.15 Enforceability; Usury............................................................. 107
10.16 WAIVERS OF JURY TRIAL............................................................. 107
10.17 Effect of Amendment and Restatement of the Existing Credit Agreement.............. 107
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10.18 Special Provisions............................................ 108
10.19 Delivery of Lender Addenda.................................... 109
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ANNEXES:
A Pricing Grid
SCHEDULES:
1.1 Mortgaged Property
4.1(b) Undisclosed Liabilities
4.6 Material Litigation
4.15 Subsidiaries
4.17 Environmental Matters
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8 Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D-1 Form of Mortgage
D-2 Form of Mortgage Amendment
E Form of Assignment and Acceptance
F Form of Legal Opinion of Kirkland & Ellis
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
J Form of Lender Addendum
K Form of Revolving Credit Commitment Increase Supplement
L Form of New Lender Supplement
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August __, 2002,
among ALLIANCE LAUNDRY HOLDINGS LLC, a Delaware limited liability company
("Holdings"), ALLIANCE LAUNDRY SYSTEMS LLC, a Delaware limited liability company
(the "Borrower"), the several banks and other financial institutions or entities
from time to time parties to this Agreement (the "Lenders"), LEHMAN BROTHERS
INC., as sole advisor, sole lead arranger and sole bookrunner (in such capacity,
the "Arranger"), LEHMAN COMMERCIAL PAPER INC., as syndication agent (in such
capacity, the "Syndication Agent"), FLEET NATIONAL BANK and LASALLE BANK
NATIONAL ASSOCIATION, as documentation agents (together, in such capacity, the
"Documentation Agents") and GENERAL ELECTRIC CAPITAL CORPORATION, as
administrative agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, Holdings and the Borrower are parties to the Credit
Agreement, dated as of May 5, 1998 (as heretofore amended, supplemented or
otherwise modified, the "Existing Credit Agreement"), with the lenders parties
thereto, the arrangers and syndication agent identified therein, and General
Electric Capital Corporation, as administrative agent; and
WHEREAS, Holdings and the Borrower have requested that the Existing
Credit Agreement be amended and restated;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto agree that on the Effective Date, as
provided in Section 10.17, the Existing Credit Agreement shall be amended and
restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"Accepting Lenders": as defined in Section 2.18(d).
"Accounts Receivable": as to the Borrower or any of its Subsidiaries,
any right to payment (including interest payments) for goods sold or leased
or for services rendered by the Borrower or such Subsidiary in the ordinary
course of business.
"Acquired Person": as to any Person, any other Person (i) at least 80%
of the Capital Stock of which is owned by such Person and (ii) which is
consolidated with such Person in accordance with GAAP.
"Acquisition": as to any Person, the acquisition by such Person of (a)
Capital Stock of any other Person if, after giving effect to the
acquisition of such Capital Stock, such other Person would be (i) an
Acquired Person of such Person and (ii) a Subsidiary Guarantor, (b) all or
substantially all of the assets of any other Person or (c) assets
constituting one or more business units of any other Person.
"Adjustment Date": as defined in the Pricing Grid.
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"Administrative Agent": as defined in the Preamble to this Agreement.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, to direct or cause the direction
of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent and the
Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Effective Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loan and (ii)
the amount of such Lender's Revolving Credit Commitment then in effect or,
if the Revolving Credit Commitments have been terminated, the amount of
such Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all the Lenders at such
time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alliance Laundry Corporation": Alliance Laundry Corporation, a
Delaware corporation.
"ALSA": Alliance Laundry S.A. (formerly known as Raytheon Appliances
S.A.), an Argentina corporation.
"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Base Rate Loans Eurodollar Loans
Revolving Credit Loans 2.50% 3.50%
Swing Line Loans 2.50% 3.50%
Term Loans 2.50% 3.50%
provided, that, on and after the first Adjustment Date occurring after the
Effective Date, the Applicable Margin with respect to Revolving Credit
Loans and Swing Line Loans will be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the relevant Issuing
Lender may specify from time to time, requesting such Issuing Lender to
open a Letter of Credit.
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"Arranger": as defined in the Preamble to this Agreement.
"Approved Fund": means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (e), (f), (g), (m), (o), (q), (r) or (s)(i) of
Section 7.5) which yields gross proceeds to Holdings, the Borrower or any
of its Subsidiaries (valued at the initial principal amount thereof in the
case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in
excess of $500,000.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment then in effect over (b) such Lender's
Revolving Extensions of Credit then outstanding; provided, that (i) in
calculating any Lender's (other than the Swing Line Lender's) Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Credit Commitment pursuant to Section 2.9(a), the aggregate
principal amount of Swing Line Loans then outstanding shall be deemed to be
zero and (ii) in calculating the Swing Line Lender's Revolving Extensions
of Credit for the purpose of determining the Swing Line Lender's Available
Revolving Credit Commitment pursuant to Section 2.9(a), the Swing Line
Lender's Revolving Extensions of Credit shall be deemed to include the
aggregate principal amount of the Swing Line Loans then outstanding.
"Bain Investors": collectively, Bain/RCL, BCIP Associate, II, BCIP
Associates II, BCIP Associates II-B, Bain Capital Fund V, L.P., Bain
Capital Fund V-B, L.P., BCIP Trust Associates II, and BCIP Trust Associate,
II-B.
"Bain/RCL": Bain/RCL, L.L.C., a Delaware limited liability company.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" means,
for any day, a floating rate equal to the rate publicly quoted from time to
time by The Wall Street Journal as the "base rate on corporate loans posted
by at least 75% of the nation's 30 largest banks" (or, if The Wall Street
Journal ceases quoting a base rate of the type described, the highest per
annum rate of interest published by the Federal Reserve Board in Federal
Reserve statistical release H.15 (519) entitled "Selected Interest Rates"
as the Bank prime loan rate or its equivalent). Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate respectively.
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"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the Preamble to this Agreement.
"Borrowing Date": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BRS": Bruckman, Rosser, Sherrill and Co., L.P.
"Business": as defined in Section 4.17(b).
"Business Day": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law 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) and which is also a day for
trading by and between banks in Dollar deposits in the interbank eurodollar
market.
"CapEx Carryforward Amount": as defined in Section 7.7.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of such Person and
its Subsidiaries.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Cash Equivalents": (a) (i) with respect to the Borrower or any
Domestic Subsidiary, marketable direct obligations issued by, or
unconditionally guaranteed by, the
5
United States government or issued by any agency thereof and backed by the
full faith and credit of the United States or (ii) with respect to any
Foreign Subsidiary, marketable direct obligations issued by, or
unconditionally guaranteed by, the national government of the jurisdiction
of organization of such Foreign Subsidiary or issued by any agency thereof
and backed by the full faith and credit of such government, in each case
maturing within one year from the date of acquisition; (b) certificates of
deposit, bankers' acceptances, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of one year or less from the date
of acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States of America or any state thereof having
combined capital and surplus of not less than $500,000,000 (or, in the case
of any certificate of deposit, bankers' acceptances, time deposits,
eurodollar time deposits or overnight time deposits of any Foreign
Subsidiary, issued by any commercial bank having capital and surplus of not
less than $500,000,000 (or the equivalent thereof)); (c) commercial paper
rated at least A-2 (or the equivalent thereof) by Standard & Poor's Ratings
Services ("S&P") or P-2 (or the equivalent thereof) by Moody's Investors
Service, Inc. ("Moody's"), or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper generally, and maturing within one
year from the date of acquisition; (d) repurchase obligations of any Lender
or of any commercial bank satisfying the applicable requirements of clause
(b) of this definition, having a term of not more than 30 days with respect
to securities of the types described in clauses (a) and (b) of this
definition; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A (or the equivalent thereof) by S&P or A (or
the equivalent thereof) by Moody's or carry an equivalent rating by a
nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of such type generally; (f) securities
with maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; or (g) shares
of money market mutual or similar funds which invest substantially in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is created or purported to be created by any
Security Document.
"Commitment": as to any Lender, the sum of the Term Loan Commitment
and the Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": 0.50% per annum.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA
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or is part of a group which includes the Borrower and which is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated June, 2002 and furnished to the Lenders.
"Consolidated Cash Interest Expense": for any period, the Consolidated
Interest Expense payable in cash during such period, provided, that the
Consolidated Interest Expense accrued with respect to the Senior
Subordinated Notes during such period shall be deemed to be payable in cash
during such period.
"Consolidated Current Assets": at any date, all amounts (other than
cash, Cash Equivalents and deferred income taxes) which would, in
conformity with GAAP, be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts which
would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet
of the Borrower and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt (including accrued but unpaid interest)
of the Borrower and its Subsidiaries and (b) without duplication of clause
(a) above, all Indebtedness (including accrued but unpaid interest)
consisting of Term Loans, Revolving Credit Loans, Letters of Credit or
Swing Line Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
such period plus the sum of (a) cash interest margin of the Borrower and
its Subsidiaries (including the Securitization Entities) from Notes
Receivable (after giving effect to any Hedge Agreements relating to such
Notes Receivables) and (b) without duplication and to the extent reflected
as a charge in the statement of such Consolidated Net Income for such
period, the sum of (i) income tax expense (including franchise taxes
imposed in lieu of income taxes), (ii) interest expense associated with
Indebtedness (including the Loans and the Letters of Credit) and Hedge
Agreements, but excluding any interest expense associated with any
Indebtedness (including Letters of Credit) issued in connection with any
Permitted Receivables Financing, (iii) amortization or writeoff of deferred
financing fees, debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans, the Letters of Credit and any Indebtedness issued in
connection with any Permitted Receivables Financing) and Hedge Agreements,
(iv) depreciation and amortization expense, (v) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (vi) any
extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of
such Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business, and charges for the writeoff of
any step-up in basis of inventory required in a transaction
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which is accounted for under the purchase method of accounting), provided
that, if any such expense or loss is not includable as a separate item in
the statement of Consolidated Net Income for such period under GAAP, such
expense or loss is reasonably acceptable to the Administrative Agent and
(vii) any other non-cash charges (other than writeoffs or write-downs of
inventory (other than any writeoffs of any step-up in basis of inventory)
unless reasonably acceptable to the Administrative Agent) and minus, to the
extent included in the statement of such Consolidated Net Income for such
period, the sum of (x) interest income, (y) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income for such period, gains on the sales of assets outside of the
ordinary course of business), provided that, if any such income or gain is
not includable as a separate item in the statement of Consolidated Net
Income for such period under GAAP, such income or gain is reasonably
acceptable to the Administrative Agent and (z) any other non-cash income,
all as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Cash Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing
and net costs under Hedge Agreements in respect of interest rates to the
extent such net costs are allocable to such period in accordance with GAAP,
but excluding any interest expense associated with any Indebtedness
(including Letters of Credit) issued in connection with any Permitted
Receivables Financing).
"Consolidated Leverage Ratio": as at the last day of any period of
four consecutive fiscal quarters of the Borrower, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for such
period; provided that for purposes of calculating Consolidated EBITDA for
any period, the Consolidated EBITDA of any Person or assets acquired by the
Borrower or any of its Subsidiaries during such period pursuant to an
Acquisition or Subsidiary Acquisition permitted hereunder (including the
portion of such period prior to the consummation of such Acquisition or
Subsidiary Acquisition) shall be included on a pro forma basis for such
period (assuming that (i) the consummation of such acquisition and the
incurrence, assumption or repayment of any Indebtedness in connection
therewith occurred on the first day of such period and (ii) any cost
savings to be implemented in connection with such Acquisition or Subsidiary
Acquisition as to which the Borrower shall have provided support for the
calculation thereof which is reasonably acceptable to the Administrative
Agent in conformity with Regulation S-X under the Securities Act as in
effect on the date hereof had been effected on the first day of such
period) if the Borrower shall deliver to the Administrative Agent a
certificate of a Responsible Officer setting forth, consistent with Article
11 of Regulation S-X under the Securities Act as in effect on the date
hereof, the calculations required to support such pro forma adjustments.
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"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary of the Borrower or is merged into or consolidated
with the Borrower or any of its Subsidiaries pursuant to an Acquisition
permitted hereunder, (b) the income (or loss) of any Person (other than a
Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form
of dividends or similar distributions and (c) the undistributed earnings of
any Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at
the time permitted by the terms of any Contractual Obligation (other than
under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
"Consolidated Senior Debt": all Funded Debt under this Agreement and
all other Funded Debt of the Borrower and its Subsidiaries (excluding all
other Funded Debt of the Borrower and its Subsidiaries which is
subordinated to the Funded Debt under this Agreement on terms no less
favorable than the terms of the Senior Subordinated Notes).
"Consolidated Senior Debt Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters of the Borrower, the ratio of
(a) Consolidated Senior Debt on such day to (b) Consolidated EBITDA for
such period; provided that for purposes of calculating Consolidated EBITDA
for any period, the Consolidated EBITDA of any Person or assets acquired by
the Borrower or any of its Subsidiaries during such period pursuant to an
Acquisition or Subsidiary Acquisition permitted hereunder (including the
portion of such period prior to the consummation of such Acquisition or
Subsidiary Acquisition) shall be included on a pro forma basis for such
period (assuming that (i) the consummation of such acquisition and the
incurrence, assumption or repayment of any Indebtedness in connection
therewith occurred on the first day of such period and (ii) any cost
savings to be implemented in connection with such Acquisition or Subsidiary
Acquisition as to which the Borrower shall have provided support for the
calculation thereof which is reasonably acceptable to the Administrative
Agent in conformity with Regulation S-X under the Securities Act as in
effect on the date hereof had been effected on the first day of such
period) if the Borrower shall deliver to the Administrative Agent a
certificate of a Responsible Officer setting forth, consistent with Article
11 of Regulation S-X under the Securities Act as in effect on the date
hereof, the calculations required to support such pro forma adjustments.
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Funded Debt of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date, excluding any increases or decreases in Notes
Receivable.
9
"Continuing Term Loan Lenders": each of the Term Loan Lenders (as
defined in the Existing Credit Agreement) under the Existing Credit
Agreement immediately prior to the Effective Date that is a Term Loan
Lender hereunder.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person whether
by contract or otherwise.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Designated Equity Amounts": at any date, the amount equal to the
aggregate amount of Net Cash Proceeds received by Holdings from the
issuance of Capital Stock (other than to the Borrower or any Subsidiary of
Holdings or the Borrower) or from any capital contribution to Holdings by a
Person other than the Borrower or any Subsidiary of Holdings or the
Borrower which have been designated in writing by the Borrower to the
Administrative Agent as "Permitted Expenditure Amounts" so long as such Net
Cash Proceeds are utilized by Holdings, the Borrower or any of its
Subsidiaries within 45 days after such receipt for an Expenditure Use
Amount.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof
(excluding the sale by Holdings of its own Capital Stock); the terms
"Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agents": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized or
incorporated under the laws of any jurisdiction within the United States of
America.
"ECF Percentage": 75%; provided that, with respect to any fiscal year
of the Borrower, the ECF Percentage with respect to such fiscal year shall
be reduced to 50% if the Consolidated Leverage Ratio at the last day of
such fiscal year of the Borrower is not greater than 4.0 to 1.0.
"Effective Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied or waived.
"Eligible Assignee": means (a) a Lender or an Affiliate of a Lender,
(b) a commercial bank organized under the laws of the United States or any
state and having
10
total assets in excess of $500,000,000 or an Affiliate of any such bank or
(c) any other fund or financial institution or Affiliate or Approved Fund
thereof that in the ordinary course of business extends credit or invests
in extensions of credit of a type similar to the Revolving Credit Loans and
has total assets of at least $100,000,000.
"Endorsements": as defined in Section 5.1(j)(ii).
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment, as now or
at any time hereafter in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Dow Jones Markets screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period. In the event that such rate does not appear on Page 3750 of the Dow
Jones Markets screen (or otherwise on such screen), the "Eurodollar Base
Rate" for purposes of this definition shall mean, with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, the rate at
which the Administrative Agent is offered Dollar deposits by first class
banks at or about 11:00 A.M., New York City time, two Business Days prior
to the beginning of such Interest Period in the interbank eurodollar market
for delivery on the first day of such Interest Period for the number of
days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
11
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i)
Consolidated Net Income for such fiscal year, (ii) an amount equal to
the amount of all non-cash charges (including depreciation and
amortization, but excluding any non-cash charges associated with any
Permitted Receivables Financing) deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working
Capital for such fiscal year, (iv) an amount equal to the aggregate net
non-cash loss on the Disposition of Property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in
the ordinary course of business and sales of Receivables pursuant to
any Permitted Receivables Financing), to the extent deducted in
determining such Consolidated Net Income, (v) the net increase during
such fiscal year (if any) in deferred tax accounts of the Borrower,
(vi) the amount by which Consolidated Working Capital was increased as
a result of the payment in such fiscal year of items referred to in
clause (b)(xv) below, (vii) any unused CapEx Carryforward Amount from
the prior fiscal year, (viii) decreases during such fiscal year in the
retained interest of the Borrower and its Subsidiaries in any
Securitization Entity resulting from the sale of Receivables to such
Securitization Entity in connection with a Permitted Receivables
Financing, (ix) any cash deposits returned to the Borrower and its
Subsidiaries in respect of the Limited Originator Recourse during such
fiscal year and (x) any decrease in the Notes Receivable during such
fiscal year over (b) the sum, without duplication, of (i) an amount
equal to the amount of all non-cash credits included in determining
such Consolidated Net Income, (ii) the aggregate amount actually paid
by the Borrower and its Subsidiaries in cash during such fiscal year on
account of Capital Expenditures (excluding the principal amount of
Indebtedness incurred in connection with such expenditures and any such
expenditures financed with the proceeds of any portion of any
Reinvestment Deferred Amount that exceeded any gain included in the
determination of Consolidated Net Income recognized as a result of the
event that gave rise to such Reinvestment Deferred Amount or Permitted
Expenditure Amounts), (iii) the CapEx Carryforward Amount for such
fiscal year, (iv) the aggregate amount of all prepayments of Revolving
Credit Loans and Swing Line Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Credit
Commitments and all optional prepayments of the Term Loans and other
Funded Debt (to the extent such Funded Debt may not be reborrowed under
the terms of such Funded Debt) during such fiscal year, (v) the
aggregate amount of all regularly scheduled principal payments of
Funded Debt (including, without limitation, the Term Loans) of the
Borrower and its Subsidiaries made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not
an equivalent permanent reduction in commitments thereunder), (vi)
increases in Consolidated Working Capital for such fiscal year, (vii)
an amount equal to the aggregate net non-cash gain on the Disposition
of Property by the Borrower and its Subsidiaries during such fiscal
year (other than sales of
12
inventory in the ordinary course of business), to the extent included
in determining such Consolidated Net Income, (viii) the net decrease
during such fiscal year (if any) in deferred tax accounts of the
Borrower, (ix) any cash payments made during such period in permanent
satisfaction of non-current liabilities of the Borrower and its
Subsidiaries, (x) any cash payments made during such fiscal year in
respect of restructuring charges to the extent not deducted in
determining such Consolidated Net Income, (xi) any Restricted Payments
permitted under Section 7.6 and made in cash during such fiscal year,
(xii) increases during such fiscal year in the retained interest of the
Borrower and its Subsidiaries in any Securitization Entity resulting
from the sale of Receivables to such Securitization Entity in
connection with a Permitted Receivables Financing, (xiii) any cash
payments made during such fiscal year pursuant to Investments permitted
under Sections 7.8(d), 7.8(i) (other than in respect of Acquisitions
consummated in accordance with clause (i)(A)(y) of the proviso to
Section 7.8(i)), 7.8(l) and 7.8(p) and which results in a net increase
during such fiscal year in the outstanding or unreturned cash balance
of such Investments, (xiv) any gain recognized as a result of any Asset
Sale or Recovery Event to the extent such gain was included in
determining such Consolidated Net Income, (xv) the amount of non-cash
charges that decreased Consolidated Working Capital during such fiscal
year which resulted from items that the Borrower reasonably determines
in good faith are expected to be paid in cash in the immediately
following fiscal year, (xvi) any cash deposits made by the Borrower and
its subsidiaries pursuant to the Limited Originator Recourse during
such fiscal year, (xvii) the amount of cash actually paid by the
Borrower and its subsidiaries during such period in respect of fees and
expenses associated with the negotiation, execution and delivery of
this Agreement and any Permitted Receivables Financing refinancing or
replacing the Initial Receivables Facility and (xviii) any increase in
the Notes Receivable during such fiscal year.
"Excess Cash Flow Application Date": as defined in Section 2.12(c).
"Exchange Act": as defined in Section 8(k).
"Excluded Subsidiaries": collectively, any Foreign Subsidiaries and
any Securitization Entities.
"Existing Mortgages": the mortgages and deeds of trust made by any
Loan Party in connection with the Existing Credit Agreement as listed
on Schedule 1.1.
"Existing Title Policies": the collective reference to each of
those certain existing policies of title insurance issued to the
Administrative Agent pursuant to the Existing Credit Agreement in
respect of the Mortgaged Properties as of the Original Closing Date.
"Exiting Lenders": as defined in Section 5.1(k).
"Exiting Term Loan Lenders": each of the Term Loan Lenders (as
defined in the Existing Credit Agreement) under the Existing Credit
Agreement other than Continuing Term Loan Lenders.
"Expenditure Use Amounts": at any date, the amount equal to the sum
of (a) all amounts utilized by Holdings, the Borrower and its
Subsidiaries as of such date to
13
finance Capital Expenditures, other than Capital Expenditures which are
(i) not in excess of the permitted Capital Expenditures for the
relevant fiscal year as set forth in Section 7.7(a) and any CapEx
Carryforward Amounts from the prior fiscal year, (ii) financed with
Reinvestment Deferred Amounts, or (iii) attributable to all or a
portion of the cost of Acquisitions or Subsidiary Acquisitions
permitted under Section 7.8, (b) all amounts utilized by Holdings, the
Borrower and its Subsidiaries as of such date to finance Acquisitions
permitted pursuant to Section 7.8(i), except to the extent that the
consideration (determined in accordance with Section 7.8(i)) for all
such Acquisitions made since the Effective Date does not exceed
$30,000,000 in the aggregate, (c) all amounts utilized by the Borrower
as of such date to repurchase or redeem Senior Subordinated Notes
permitted pursuant to Section 7.9(a) and (d) all amounts utilized by
the Borrower and the Subsidiary Guarantors as of such date to finance
Investments (other than Acquisitions) pursuant to Section 7.8(i),
except to the extent that the consideration (determined in accordance
with Section 7.8(i)) for all such Investments (other than Acquisitions)
made since the Effective Date does not exceed $5,000,000 in the
aggregate.
"Facility": each of (a) the Term Loan Commitments and the Term
Loans made thereunder (the "Term Loan Facility") and (b) the Revolving
Credit Commitments and the extensions of credit made thereunder (the
"Revolving Credit Facility").
"Federal Funds Effective Rate": for any day, the weighted average
of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for the day of
such transactions received by the Reference Lender from three federal
funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such Person, to a date more than one year from such
date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of
more than one year from such date, including, without limitation, all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from
the date of its creation and, in the case of the Borrower, Indebtedness
in respect of the Loans, provided that (a) any Indebtedness of such
Person in respect of the undrawn portion of any letter of credit shall
not constitute Funded Debt of such Person and (b) any undrawn loan
commitment or cash collateral deposit pursuant to the Limited
Originator Recourse shall not constitute Funded Debt of the Borrower
and its Subsidiaries.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower
and the Lenders.
14
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time, except that for
purposes of Section 7.1, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used
in the preparation of the most recent audited financial statements
delivered pursuant to Section 4.1(b), except that calculations made for
purposes of determining compliance with Section 7.1 and for purposes of
determining the Applicable Margin shall be made without giving effect
to depreciation, amortization or other expenses to the extent recorded
as a result of the application of purchase accounting in accordance
with Accounting Principles Board Opinion Nos. 16 and 17. In the event
that any "Accounting Change" (as defined below) shall occur and such
change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and
the Administrative Agent agree to enter into negotiations in order to
amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been
made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required
Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting
Changes had not occurred. "Accounting Changes" refers to changes in
accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the Securities and Exchange Commission
(or successors thereto or agencies with similar functions).
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without
limitation, the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by
Holdings, Alliance Laundry Corporation, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing 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 (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to
15
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 owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection or standard contractual indemnities entered
into, in each case, in the ordinary course of business. The amount of
any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantors": the collective reference to Holdings, Alliance
Laundry Corporation and the Subsidiary Guarantors.
"Hedge Agreements": all interest rate or currency swaps, caps or
collar agreements or similar arrangements or foreign exchange contracts
entered into by the Borrower or any of its Subsidiaries providing for
protection against fluctuations in interest rates or currency exchange
rates or the exchange of nominal interest obligations, either generally
or under specific contingencies.
"Highest Lawful Rate": as defined in Section 10.15.
"Holdings": as defined in the Preamble to this Agreement.
"Indebtedness": of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property
or services (other than current accounts or trade payables and accrued
expenses incurred in the ordinary course of such Person's business and
excluding any such obligations arising under ERISA other than such
obligations which must be satisfied within the succeeding twelve
months) to the extent such obligations would appear as liabilities on a
consolidated balance sheet of such Person prepared in accordance with
GAAP, (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created
or arising under any conditional sale or other title retention
agreement with respect to Property acquired by such Person (even though
the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such
Property), (e) all Capital Lease Obligations of such Person, (f) the
face amount of all obligations of such Person, contingent or otherwise,
as an account party under acceptance, letter of credit or similar
facilities, (g) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (f) above,
(h) all obligations of the kind referred to in clauses (a) through (g)
above secured by (or
16
for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, and (i) for the purposes of Section
8(e) only, all obligations of such Person in respect of Hedge
Agreements. The amount of any Indebtedness under (x) clause (h) shall
be equal to the lesser of (A) the stated amount of the relevant
obligations and (B) the fair market value of the Property subject to
the relevant Lien and (y) clause (i) shall be the net amount, including
any net termination payments, required to be paid to a counterparty
rather than the notional amount of the applicable Hedge Agreement.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Initial Receivables Facility": the $250,000,000 non-recourse
off-balance sheet receivables purchase and equipment financing facility
established by the Borrower on the Original Closing Date, as the same
may be amended, modified, changed or replaced from time to time.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the first
day of each April, July, October and January to occur while such Loan
is outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having
an Interest Period longer than three months, each day which is three
months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to
any Loan (other than any Revolving Credit Loan that is a Base Rate Loan
and any Swing Line Loan), the date of any repayment or prepayment made
in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may
be, with respect to such Eurodollar Loan and ending one, two, three or
six months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and (b) thereafter, each period commencing on the last
day of the next preceding
17
Interest Period applicable to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto; provided, that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(ii) (A) any Interest Period with respect to any Revolving
Credit Loan that would otherwise extend beyond the Revolving
Credit Termination Date shall end on the Revolving Credit
Termination Date and (B) any Interest Period with respect to any
Term Loan that would otherwise extend beyond the date final
payment is due on the Term Loans shall end on such due date;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month; and
(iv) the Borrower shall select Interest Periods so as not
to require a prepayment of any Eurodollar Loan during an Interest
Period for such Loan in connection with any scheduled payment of
principal with respect thereto.
"Investments": as defined in Section 7.8.
"Issuing Lender": any of (a) General Electric Capital
Corporation, (b) any commercial bank reasonably acceptable to the
Borrower which is designated as the "Issuing Lender" by the
Administrative Agent and subject to a Master L/C Agreement with the
Administrative Agent or (c) any Revolving Credit Lender, in each case,
in its capacity as issuer of any Letter of Credit.
"L/C Commitment": $30,000,000.
"L/C Fee Payment Date": the first day of each April, July,
October and January and the last day of the Revolving Credit Commitment
Period.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.
"L/C Participants": the collective reference to all the Revolving
Credit Lenders.
18
"Lender Addendum": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit J, to be executed and
delivered by such Lender on the Effective Date as provided in Section
10.19.
"Lenders": as defined in the Preamble to this Agreement.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
in each case, for the purpose of securing any obligation of any Person
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"Limited Originator Recourse": a letter of credit, revolving loan
commitment, cash collateral account or other such credit enhancement
issued in connection with the incurrence of Indebtedness by a
Securitization Entity under a Permitted Receivables Financing; provided
that, the aggregate amount of such letter of credit reimbursement
obligations and the aggregate available amount of such revolving loan
commitments, cash collateral accounts or other such credit enhancements
of the Borrower and the Subsidiary Guarantors shall not exceed 15.0% of
the principal amount of such Indebtedness at any time.
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents, the Notes
and the Applications.
"Loan Parties": Holdings, the Borrower, Alliance Laundry
Corporation and each Subsidiary of the Borrower which is a party to a
Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of
the Term Loans or the Total Revolving Extensions of Credit, as the case
may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to any termination of the Revolving
Credit Commitments, the holders of more than 50% of the Total Revolving
Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Management Notes": as defined in Section 7.6(b).
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan
19
Documents or the rights or remedies, taken as a whole, of the
Administrative Agent or the Lenders hereunder or thereunder.
"Material Subsidiary": any Subsidiary of Holdings or the Borrower
which has assets (valued at their fair market value) or annual revenues
which are in excess of $2,500,000.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Merger Agreement": Agreement and Plan of Merger, dated as of
February 21, 1998, among Bain/RCL, RCL Acquisitions, L.L.C., Holdings
and Raytheon (as amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof).
"Mortgage Amendments": the amendments to the Existing Mortgages
executed and delivered by any Loan Party, substantially in the form of
Exhibit D-2 hereto (with such modifications thereto as the
Administrative Agent on or before the Effective Date shall reasonably
determine is necessary in any state to maintain the priority of the
mortgage Lien encumbering the relevant Mortgaged Property), as the same
may be amended, supplemented or otherwise modified from time to time.
"Mortgaged Properties": the real properties listed on Schedule 1.1,
as to which the Administrative Agent for the benefit of the Secured
Parties has been or shall be granted a Lien pursuant to the Mortgages.
"Mortgages": each of (i) the Existing Mortgages and (ii) the
mortgages and deeds of trust made by any Loan Party in favor of, or for
the benefit of, the Administrative Agent for the benefit of the Secured
Parties, substantially in the form of Exhibit D (with such changes
thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same
may be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or the sale or disposition of any
non-cash consideration or otherwise, but only as and when received and
excluding the portion of such deferred payment constituting interest)
of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such Asset
Sale or
20
Recovery Event (other than any Lien pursuant to a Security Document)
and other customary costs, fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to
be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements)
and net of amounts deposited in escrow in connection therewith or
reasonably expected to be paid as a result of any purchase price
adjustment, indemnities or reserves related thereto (such amounts
shall be Net Cash Proceeds to the extent and at the time released or
not required to be so used) and (b) in connection with any issuance or
sale of equity securities or debt securities or instruments or the
incurrence of loans or capital contribution, the cash proceeds
received from such issuance, incurrence or capital contribution, net
of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and
expenses actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 2.20(a).
"Non-U.S. Lender": as defined in Section 2.20(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Notes Receivable": as to the Borrower or any of its Subsidiaries,
any right to payment in respect of loans or finance leases made by the
Borrower or such Subsidiary to its customers or users of the Borrower's
or any Subsidiary's product or customers of distributors of such
products in the ordinary course of business.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans
and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and Reimbursement Obligations and all other
obligations and liabilities of the Borrower to the Administrative Agent
or to any Lender (or, in the case of Hedge Agreements, any affiliate of
any Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Hedge Agreement entered into with
any Lender or any affiliate of any Lender, or any other document made,
delivered or executed by any Loan Party in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by
the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
21
"Original Closing Date": May 5, 1998.
"Participant": as defined in Section 10.6(b).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Perfection Certificate": a certificate in the form of Annex 2
to the Guarantee and Collateral Agreement or any other form approved by
the Administrative Agent.
"Permitted Co-Investors": (i) BRS, BCB Family Partners, L.P.,
NAZ Family Partners, L.P., Paul D. Kaminski, Bruce C. Bruckmann, Donald
J. Bruckmann, Harold O. Rosser, Stephen C. Sherrill, H. Virgil
Sherrill, Nancy A. Zweng, John Rice Emunds, Susan Kaider, Marilena
Tibrea, Walker C. Simmons, MLPF&S Custodian FBO Paul Kaminski, and
BRS/RCL Investment Corp. or (ii) any Person or Persons which acquired
the Capital Stock of Holdings owned by such Persons referred to in the
preceding clause (i) on the Original Closing Date with the consent of
Bain/RCL, and in the case of each of clauses (i) and (ii) above, any of
their respective Related Parties and Control Investment Affiliates.
"Permitted Expenditure Amounts": at any date, the amount equal
to (a) the sum of (i) all Designated Equity Amounts as of such date,
(ii) any portion of the Excess Cash Flow of the Borrower for fiscal
years completed since the Effective Date which was not required to be
applied toward the prepayment of the Term Loan and the reduction of the
Revolving Credit Commitments pursuant to the provisions of Section
2.12(c) and (iii) 50% of the aggregate Prepayment Amounts declined by
the Term Loan Lenders pursuant to Section 2.18(d) as of such date minus
(b) the aggregate amount of Expenditure Use Amounts as of such date.
"Permitted Investors": the collective reference to the
Sponsor, the Bain Investors and their respective Related Parties and
Control Investment Affiliates.
"Permitted Receivables Financing": (a) the Initial Receivables
Facility, as the same may be amended, modified, changed or replaced
from time to time and/or (b) any other off-balance sheet transaction
providing for the sale of Receivables by the Borrower and its
Subsidiaries to a Securitization Entity or any other Person (other than
Holdings, the Borrower or any of their respective Subsidiaries) which
transaction may include limited recourse to the Borrower and its
Subsidiaries (not to exceed the Limited Originator Recourse) based on
the collectability of the Receivables sold.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
22
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Prepayment Amounts": as defined in Section 2.18(d).
"Prepayment Date": as defined in Section 2.18(d).
"Prepayment Option Notice": as defined in Section 2.18(d).
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified
Hedge Agreement was entered into, was a Lender or an affiliate of a
Lender.
"Raytheon": Raytheon Company, a Delaware corporation.
"Recapitalization": the leveraged recapitalization transaction
involving Bain/RCL, RCL Acquisition, L.L.C., Holdings and Raytheon
consummated pursuant to the Merger Agreement.
"Recapitalization Documents": the collective reference to the
Merger Agreement and all other documents and agreements delivered in
connection therewith on the Original Closing Date.
"Receivables": as to the Borrower or any of its Subsidiaries,
collectively, the Accounts Receivable and Notes Receivable of the
Borrower or such Subsidiary, as the case may be.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of Holdings, the Borrower or any of its
Subsidiaries with a value in excess of $500,000.
"Reference Lender": Citibank, N.A. or its successor.
"Refunded Swing Line Loans": as defined in Section 2.7(b).
23
"Refunding Date": as defined in Section 2.7(c).
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the relevant Issuing Lender or the Administrative Agent, as
the case may be, pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by
Holdings, the Borrower or any of its Subsidiaries in connection
therewith which are not applied to prepay the Term Loans or reduce the
Revolving Credit Commitments pursuant to Section 2.12(b) as a result of
the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a
Subsidiary Guarantor) (in the case of any Asset Sale or Recovery Event
relating to assets of the Borrower or a Subsidiary Guarantor) or any
Subsidiary (in the case of any Asset Sale or Recovery Event relating to
assets of a Subsidiary which is not a Subsidiary Guarantor) intends and
expects to use all or a specified portion of the Net Cash Proceeds of
an Asset Sale or Recovery Event to acquire assets (directly or through
the purchase of the Capital Stock of a Person pursuant to an
Acquisition or (in the case of any Asset Sale or Recovery Event
relating to assets of a Subsidiary which is not a Subsidiary Guarantor
or the Capital Stock of any such Subsidiary) Subsidiary Acquisition)
useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets (directly or through the purchase of the Capital
Stock of a Person pursuant to an Acquisition or (in the case of any
Asset Sale or Recovery Event relating to assets of a Subsidiary which
is not a Subsidiary Guarantor or the Capital Stock of any such
Subsidiary) Subsidiary Acquisition) useful in the Borrower's or any of
its Subsidiaries' business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring six months
after such Reinvestment Event (or (i) in the case of any Reinvestment
Event arising out of any Asset Sale in connection with the Ripon
Transition, the date occurring nine months after such Reinvestment
Event, or (ii) in the case of any Reinvestment Event arising out of a
casualty insurance claim where the Borrower or any of its Subsidiaries
is rebuilding or restoring the property subject to such casualty, the
date occurring twelve months after such Reinvestment Event) and (b) the
date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire assets (directly or through the purchase
of the Capital Stock of a
24
Person pursuant to an Acquisition or (in the case of any Asset Sale or
Recovery Event relating to assets of a Subsidiary which is not a
Subsidiary Guarantor or the Capital Stock of any such Subsidiary)
Subsidiary Acquisition) useful in the Borrower's or any of its
Subsidiaries' business with all or any portion of the relevant
Reinvestment Deferred Amount.
"Related Party": with respect to any Person, any stockholder,
officer, employee or partner of such Person and (a) trusts for the
benefit of such Person or the spouses, issue, parents or other
relatives of such Person, (b) entities controlling or controlled by
such Person and (c) in the event of the death of any such individual
Person, heirs or testamentary legatees of such Person.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice period
is waived under subsections .22, .23, .25, .27 or .28 of PBGC Reg.(S)
4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Effective Date, the Commitments and (b) thereafter,
the sum of (i) the aggregate unpaid principal amount of the Term Loans
then outstanding and (ii) the Total Revolving Credit Commitments then
in effect or, if the Revolving Credit Commitments have been terminated,
the Total Revolving Extensions of Credit then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is
subject.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer of the
Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit (or guarantees by
the Administrative Agent in respect of Letters of Credit issued by
Issuing Lenders which are not Lenders), in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule 1
to the Lender Addendum delivered by such Lender, or, as the case may
be, in the Assignment and Acceptance pursuant to which such Lender
became a party hereto, as the same may be changed from
25
time to time pursuant to the terms hereof. The original amount of the
Total Revolving Credit Commitments is $45,000,000.
"Revolving Credit Commitment Increase Notice": as defined in
Section 2.4A(a).
"Revolving Credit Commitment Period": the period from and
including the Effective Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
"Facility" contained in this Section 1.1.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Offered Increase Amount": as defined in
Section 2.4A(a).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments
(or, at any time after the Revolving Credit Commitments shall have
expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Extensions of Credit then outstanding
constitutes of the aggregate principal amount of the Revolving
Extensions of Credit of all the Revolving Credit Lenders then
outstanding).
"Revolving Credit Re-Allocation Date": as defined in Section
2.4A(d).
"Revolving Credit Termination Date": the fifth anniversary of
the Effective Date.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (b) such Lender's Revolving Credit Percentage of the L/C
Obligations then outstanding and (c) such Lender's Revolving Credit
Percentage of the aggregate principal amount of Swing Line Loans then
outstanding.
"Ripon Transition": collectively, (a) the establishment of the
capability to manufacture small-chassis frontload washers and dryers at
the manufacturing facility located in Ripon, Wisconsin and (b) the
Disposition by the Borrower and its Subsidiaries of Property located at
the Ripon facility on the Original Closing Date which is not intended
to be used at the Ripon facility after the establishment of the
manufacturing capability described in clause (a).
"Sale/Leaseback Transaction": as defined in Section 7.11.
"Secured Parties": as defined in the Guarantee and Collateral
Agreement.
26
"Securities Act": the Securities Act of 1933, as amended.
"Securitization Documentation": the collective reference to the
documentation pursuant to which any Permitted Receivables Financing is
established and maintained.
"Securitization Entity": as to the Borrower or any of its
Subsidiaries, a corporation, partnership, trust, limited liability company
or other entity that is formed by the Borrower or such Subsidiary for the
purpose of purchasing or financing Receivables of the Borrower and/or its
Subsidiaries pursuant to any Permitted Receivables Financing and that is
designated as a "Securitization Entity" in a written notice delivered to
the Administrative Agent by the Borrower (including Alliance Commercial
Appliances Receivables LLC, Alliance Commercial Appliances Finance LLC and
Alliance Laundry Receivables Warehouse, LLC) so long as (a) such
corporation, partnership, trust, limited liability company or other entity
engages in no business and incurs no Indebtedness or other liabilities or
obligations other than those related to or incidental to the relevant
Permitted Receivables Financing, (b) neither the Borrower nor any
Subsidiary issues or incurs any Indebtedness or Guarantee Obligations
(other than Limited Originator Recourse) in respect of, or grants any Lien
on any of its assets or properties to secure, any Indebtedness, liabilities
or other obligations of such corporation, partnership, trust, limited
liability company or other entity or otherwise relating to such Permitted
Receivables Financing, (c) neither Holdings, the Borrower nor any of their
respective Subsidiaries has any material contract, agreement, arrangement
or understanding other than on terms no less favorable to Holdings, the
Borrower or such Subsidiary than those that might be obtained at that time
from Persons that are not Affiliates of the Borrower, other than fees
payable in the ordinary course of business in connection with servicing
receivables of such entity, and (d) neither Holdings, the Borrower nor any
of their respective Subsidiaries has any obligation to maintain such
entity's financial condition or cause such entity to achieve certain levels
of operating results (other than those related to or incidental to the
relevant Permitted Receivables Financing).
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages, the Mortgage Amendments and all other
security documents hereafter delivered to and accepted by the
Administrative Agent granting a Lien on any Property of any Person to
secure the obligations and liabilities of any Loan Party under any Loan
Document.
"Seller Preferred Membership Interests": preferred limited liability
company interests of Holdings owned by Raytheon as of the Original Closing
Date having an initial aggregate liquidation preference of $6,000,000 (as
amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof).
"Seller Securities": the collective reference to the Subordinated
Seller Notes and the Seller Preferred Membership Interests.
"Senior Subordinated Note Indenture": the indenture entered into by
the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes on the Original Closing Date,
together with all instruments and other
27
agreements entered into on the Original Closing Date by the Borrower or
such Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in compliance with
Section 7.9.
"Senior Subordinated Notes": the 9 5/8% Senior Subordinated Notes due
2008 issued pursuant to the Senior Subordinated Note Indenture and any
senior subordinated notes having the same terms and conditions as such
Senior Subordinated Notes issued in exchange for such Senior Subordinated
Notes pursuant to the Senior Subordinated Note Indenture, as the same may
be amended, supplemented or otherwise modified from time to time in
compliance with Section 7.9.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date,
as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors, (b)
the "present fair saleable value" (as determined in accordance with
applicable federal and state laws governing determination of the insolvency
of debtors) of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person
on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay
its debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", (ii) "claim" means any (x) 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 (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed, secured or
unsecured, and (iii) the Borrower may assume, so long as no Default or
Event of Default shall have occurred and be continuing at the time such
assumption is made, that all or a portion of the outstanding Term Loans or
Indebtedness permitted under Section 7.2(f) will be refinanced at the
maturity thereof.
"Specified Change of Control": a "Change of Control" as defined in the
Senior Subordinated Note Indenture.
"Specified Hedge Agreement": any Hedge Agreement entered into by (a)
the Borrower or any of its Subsidiaries and (b) any Person that, at the
time such Hedge Agreement is entered into, is a Qualified Counterparty.
"Sponsor": Bain Capital Partners, LLC
28
"Subordinated Seller Notes": subordinated notes of Holdings in an
initial aggregate principal amount of $9,000,000 issued to Raytheon (as
amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof).
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, (a) all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower and (b) except as otherwise expressly provided
herein, for purposes of this Agreement, (i) no Securitization Entity shall
be a Subsidiary of the Borrower or Holdings and (ii) ALSA shall not be a
Subsidiary of the Borrower or Holdings unless the Administrative Agent and
the Borrower shall otherwise agree.
"Subsidiary Acquisition": any Investment (other than an Acquisition)
which results in the creation or acquisition of a Subsidiary.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than any
Excluded Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line Lender to
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal
amount at any one time outstanding not to exceed the lesser of (a)
$7,500,000 and (b) the Revolving Credit Commitment of the Swing Line Lender
minus the Revolving Extensions of Credit of the Swing Line Lender.
"Swing Line Lender": General Electric Capital Corporation, in its
capacity as the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Participation Amount": as defined in Section 2.7(c).
"Syndication Agent": as defined in the Preamble to this Agreement.
"Tax Refund": as defined in Section 2.20(f).
"Term Loan": as defined in Section 2.1.
"Term Loan Commitment": as to each Term Loan Lender, the obligation of
such Lender, if any, to make a Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Term
Loan Commitment" opposite such Lender's name on Schedule 1 to the Lender
Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender
29
became a party hereto,. The original aggregate amount of the Term Loan
Commitments is $193,000,000.
"Term Loan Facility": as defined in the definition of "Facility"
contained in this Section 1.1.
"Term Loan Lender": each Lender which has a Term Loan Commitment or
which is the holder of a Term Loan.
"Term Loan Maturity Date": the date that is the fifth anniversary of
the Effective Date.
"Term Loan Percentage": as to any Lender at any time, the percentage
which such Lender's Term Loan Commitment then constitutes of the aggregate
Term Loan Commitments (or, at any time after the Effective Date, the
percentage which the principal amount of such Lender's Term Loan then
outstanding constitutes of the aggregate principal amount of the Term Loans
then outstanding); provided, that solely for purposes of calculating the
amount of each installment of Term Loans (other than the last installment)
payable to a Term Loan Lender pursuant to Section 2.3, such Term Loan
Lender's Term Loan Percentage shall be calculated without giving effect to
any portion of any prior mandatory or optional prepayment attributable to
such Term Loan Lender's Term Loans which shall have been declined by such
Term Loan Lender (or, in the case of any Term Loan Lender which shall have
acquired its Term Loans by assignment from another Person, by such other
Person).
"Total Revolving Credit Commitments": at any time, the aggregate
amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"Transferee": as defined in Section 10.14.
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"UCC Filing Collateral": Collateral (other than fixtures) as to which
filing financing statements under the Uniform Commercial Code of the
applicable jurisdiction is an appropriate method of perfection of a
security interest in such Collateral.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares
required by law and/or other nominal amounts of shares or other equity
interests required by law to be held other
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than by such Person) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
a Wholly Owned Subsidiary of Holdings or the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions hereof,
and after giving effect to Sections 10.17 and 10.18(b), each Term Loan Lender
severally agrees to make a term loan (each, a "Term Loan") to the Borrower on
the Effective Date in an amount equal to the amount of the Term Loan Commitment
of such Lender, provided that each Continuing Term Loan Lender shall be deemed
to have made available to the Administrative Agent the principal amount then
outstanding of the Term Loan (as defined in the Existing Credit Agreement) of
such Continuing Term Loan Lender under the Existing Credit Agreement. The Term
Loans may from time to time be Eurodollar Loans or Base Rate Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.13.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, on the Effective
Date) requesting that the Term Loan Lenders make the Term Loans on the Effective
Date. Upon receipt of such notice the Administrative Agent shall promptly notify
each Term Loan Lender thereof. Not later than 12:00 Noon, New York City time,
subject to Sections 10.17 and 10.18(b), on the Effective Date each Term Loan
Lender shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the Term Loan to be made by such
Lender. Subject to Sections 10.17 and 10.18(b), the Administrative Agent shall
transfer to the account of the Borrower specified by the Borrower the aggregate
of the amounts made available to the Administrative Agent by the Term Loan
Lenders in immediately available funds.
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2.3 Repayment of Term Loans. The Borrower shall pay to the
Administrative Agent, for the account of the Term Loan Lenders, the principal
amount of the Term Loans in twenty consecutive quarterly installments payable on
the last day of March, June, September and December of each year, commencing on
September 30, 2002, each of which shall be in an amount equal to the amount set
forth below opposite such installment (and, upon receipt thereof, the
Administrative Agent will distribute to each Term Loan Lender its Term Loan
Percentage of each such payment):
Installment Principal Amount
September 30, 2002 $ 2,500,000
December 31, 2002 $ 2,500,000
March 31, 2003 $ 2,500,000
June 30, 2003 $ 2,500,000
September 30, 2003 $ 2,500,000
December 31, 2003 $ 2,500,000
March 31, 2004 $ 2,500,000
June 30, 2004 $ 2,500,000
September 30, 2004 $ 3,750,000
December 31, 2004 $ 3,750,000
March 31, 2005 $ 3,750,000
June 30, 2005 $ 3,750,000
September 30, 2005 $ 3,750,000
December 31, 2005 $ 3,750,000
March 31, 2006 $ 3,750,000
June 30, 2006 $ 3,750,000
September 30, 2006 $ 6,250,000
December 31, 2006 $ 6,250,000
March 31, 2007 $ 6,250,000
Term Loan Maturity Date $124,250,000
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the L/C Obligations then outstanding and
(ii) the aggregate principal amount of the Swing Line Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment. During
the Revolving Credit Commitment Period, the Borrower may use the Revolving
Credit Commitments by borrowing or prepaying and reborrowing the Revolving
Credit Loans in whole or in part, all in accordance with the terms and
conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.5 and 2.13, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Revolving Credit Termination Date.
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(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
2.4A Revolving Credit Commitment Increases.
(a) In the event that the Borrower wishes to increase the Total
Revolving Credit Commitments at any time when no Default or Event of Default has
occurred and is continuing, it shall notify the Administrative Agent in writing
of the amount (the "Revolving Credit Offered Increase Amount") of such proposed
increase (such notice, a "Revolving Credit Commitment Increase Notice") in a
maximum amount equal to $5,000,000. The Borrower may, at its election, (i) offer
one or more of the Lenders the opportunity to provide all or a portion of the
Revolving Credit Offered Increase Amount pursuant to paragraph (c) below and/or
(ii) with the consent of the Agents (which consent shall not be unreasonably
withheld), offer one or more additional banks, financial institutions or other
entities the opportunity to provide all or a portion of the Revolving Credit
Offered Increase Amount pursuant to paragraph (b) below. The Revolving Credit
Commitment Increase Notice shall specify which Lenders and/or banks, financial
institutions or other entities the Borrower desires to provide such Revolving
Credit Offered Increase Amount. The Borrower or, if requested by the Borrower,
the Administrative Agent will notify such Lenders, and/or banks, financial
institutions or other entities of such offer.
(b) Any additional bank, financial institution or other entity which
the Borrower selects to offer participation in the increased Total Revolving
Credit Commitments and which elects to become a party to this Agreement and
obtain a Revolving Credit Commitment in an amount so offered and accepted by it
pursuant to Section 2.4A(a)(ii) shall execute a New Lender Supplement with the
Borrower and the Administrative Agent, substantially in the form of Exhibit L,
whereupon such bank, financial institution or other entity (herein called a "New
Revolving Credit Lender") shall become a Lender for all purposes and to the same
extent as if originally a party hereto and shall be bound by and entitled to the
benefits of this Agreement, provided that the Revolving Credit Commitment of any
such New Revolving Credit Lender shall be in an amount not less than $2,500,000
or such other amount consented to by the Agents.
(c) Any Lender which accepts an offer to it by the Borrower to
increase its Revolving Credit Commitment pursuant to Section 2.4A(a)(i) shall,
in each case, execute a Commitment Increase Supplement with the Borrower and the
Agents, substantially in the form of Exhibit K, whereupon such Lender shall be
bound by and entitled to the benefits of this Agreement with respect to the full
amount of its Revolving Credit Commitment as so increased.
(d) If any bank, financial institution or other entity becomes a New
Revolving Credit Lender pursuant to Section 2.4A(b) or any Lender's Revolving
Credit Commitment is increased pursuant to Section 2.4A(c), additional Revolving
Credit Loans made on or after the effectiveness thereof (the "Revolving Credit
Re-Allocation Date") shall be made pro rata based on the Revolving Credit
Percentages in effect on and after such Revolving Credit Re-Allocation Date
(except to the extent that any such pro rata borrowings would result in any
Lender making an aggregate principal amount of Revolving Credit Loans in excess
of its Revolving Credit Commitment, in which case such excess amount will be
allocated to, and made by, such New Revolving Credit Lenders and/or Lenders with
such increased Revolving Credit Commitments to the extent of, and pro rata based
on, their respective Revolving Credit Commitments otherwise
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available for Revolving Credit Loans), and continuations of Eurodollar Loans
outstanding on such Revolving Credit Re-Allocation Date shall be effected by
repayment of such Eurodollar Loans on the last day of the Interest Period
applicable thereto and the making of new Eurodollar Loans pro rata based on such
new Revolving Credit Percentages. In the event that on any such Revolving Credit
Re-Allocation Date there is an unpaid principal amount of Base Rate Loans, the
Borrower shall make prepayments thereof and borrowings of Base Rate Loans so
that, after giving effect thereto, the Base Rate Loans outstanding are held pro
rata based on such new Revolving Credit Percentages. In the event that on any
such Revolving Credit Re-Allocation Date there is an unpaid principal amount of
Eurodollar Loans, such Eurodollar Loans shall remain outstanding with the
respective holders thereof until the expiration of their respective Interest
Periods (unless the Borrower elects to prepay any thereof in accordance with the
applicable provisions of this Agreement), and interest on and repayments of such
Eurodollar Loans will be paid thereon to the respective Lenders holding such
Eurodollar Loans pro rata based on the respective principal amounts thereof
outstanding.
(e) Notwithstanding anything to the contrary in this Section 2.4A,
(i) in no event shall any transaction effected pursuant to this Section 2.4A
cause the sum of Total Revolving Credit Commitments and Term Loan Commitments
(including any Optional Term Loan Commitments) to exceed $243,000,000, (ii) in
no event may the Borrower deliver more than one Revolving Credit Commitment
Increase Notice and (iii) no Lender shall have any obligation to increase its
Revolving Credit Commitment unless it agrees to do so in its sole discretion.
(f) The Administrative Agent shall have received on or prior to the
Revolving Credit Re-Allocation Date, for the benefit of the Lenders, (i) a legal
opinion of counsel to the Borrower covering such matters as are customary for
transactions of this type and such other matters as may be reasonably requested
by the Administrative Agent and (ii) certified copies of resolutions of the
Borrower authorizing the Revolving Credit Offered Increase Amount.
2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice may be given by telephone,
promptly confirmed by telecopy) (which notice must be received by the
Administrative Agent prior to (a) 3:00 P.M., New York City time, three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) 12:00 Noon, New York City time, on the requested Borrowing Date, in the case
of Base Rate Loans) specifying (i) the amount and Type of Revolving Credit Loans
to be borrowed, (ii) the requested Borrowing Date, (iii) the account to which
the proceeds of such Loans should be transferred and (iv) in the case of
Eurodollar Loans, the respective length of the initial Interest Periods
therefor. Any Revolving Credit Loans made on the Closing Date shall initially be
Base Rate Loans. Each borrowing under the Revolving Credit Commitments shall be
in an amount equal to (x) in the case of Base Rate Loans, at least $250,000 (or,
if the then aggregate Available Revolving Credit Commitments are less than
$250,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof; provided, that (A)
the Swing Line Lender may request, on behalf of the Borrower, borrowings under
the Revolving Credit Commitments which are Base Rate Loans in other amounts
pursuant to Section 2.7 and (B) borrowings of Base Rate Loans contemplated under
Section 3.5 shall not be
34
subject to the requirements of this sentence. Upon receipt of any such notice
from the Borrower, the Administrative Agent shall promptly notify each Revolving
Credit Lender thereof. Each Revolving Credit Lender will make the amount of its
pro rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to (a) 12:00 Noon, New York
City time, in the case of Eurodollar Loans, or (b) 2:00 P.M., New York City
time, in the case of Base Rate Loans, on the Borrowing Date requested by the
Borrower in Dollars and in funds immediately available to the Administrative
Agent. Such borrowing will then be made immediately available on such day to the
Borrower by the Administrative Agent transferring to the account of the Borrower
specified by the Borrower the aggregate of the amounts made available to the
Administrative Agent by the Revolving Credit Lenders and in like funds as
received by the Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments from time to
time during the Revolving Credit Commitment Period by making swing line loans
("Swing Line Loans") to the Borrower; provided that (i) the aggregate principal
amount of Swing Line Loans outstanding at any time shall not exceed the Swing
Line Commitment then in effect (notwithstanding that the Swing Line Loans
outstanding at any time, when aggregated with the Swing Line Lender's other
outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to
the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans on the
Revolving Credit Termination Date.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line
Loans. (a) Whenever the Borrower desires that the Swing Line Lender make Swing
Line Loans it shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:30 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed, (ii) the account to
which such amount should be transferred and (iii) the requested Borrowing Date
(which shall be a Business Day during the Revolving Credit Commitment Period).
Each borrowing under the Swing Line Commitment shall be in a minimum amount
equal to $50,000. Not later than 4:30 P.M., New York City time, on the Borrowing
Date specified in a notice in respect of Swing Line Loans, the Swing Line Lender
shall make available to the Administrative Agent at the Funding Office an amount
in Dollars and in immediately available funds equal to the amount of the Swing
Line Loan to be made by the Swing Line Lender. The Administrative Agent shall
make the proceeds of such Swing Line Loan available to the Borrower on such
Borrowing Date by transferring such proceeds to the account of the Borrower
specified by the Borrower on such Borrowing Date in immediately available funds.
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(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice to the Administrative Agent given by the Swing Line Lender no later
than 12:00 Noon, New York City time, request each Revolving Credit Lender to
make, and each Revolving Credit Lender hereby severally agrees to make, a
Revolving Credit Loan, in an amount equal to such Revolving Credit Lender's
Revolving Credit Percentage of the aggregate amount of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date of such notice, to repay
the Swing Line Lender. Upon receipt of any such notice from the Swing Line
Lender, the Administrative Agent shall promptly notify the Revolving Credit
Lenders thereof. Each Revolving Credit Lender shall make the amount of such
Revolving Credit Loan available to the Administrative Agent at the Funding
Office in immediately available funds, not later than 10:00 A.M., New York City
time, one Business Day after the date of such notice. The proceeds of such
Revolving Credit Loans shall be immediately made available by the Administrative
Agent to the Swing Line Lender for application by the Swing Line Lender to the
repayment of the Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have otherwise
been made pursuant to Section 2.7(b), one of the events described in Section
8(f) shall have occurred and be continuing with respect to the Borrower or if
for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest in
the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "Swing Line Participation Amount") equal to (i) such Revolving
Credit Lender's Revolving Credit Percentage times (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 2.5 or
36
Section 5; (iii) any adverse change in the condition (financial or otherwise) of
the Borrower; (iv) any breach of this Agreement or any other Loan Document by
the Borrower, any other Loan Party or any other Revolving Credit Lender; or (v)
any other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.
2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender, Term Loan Lender or the Swing Line
Lender, as the case may be, (i) the then unpaid principal amount of each
Revolving Credit Loan of such Revolving Credit Lender on the Revolving Credit
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 8), (ii) the then unpaid principal amount of each Swing Line
Loan of such Swing Line Lender on the Revolving Credit Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 8)
and (iii) the principal amount of the Term Loan of such Term Loan Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which the Loans become due and payable pursuant to
Section 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.15.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded (absent manifest error); provided,
however, that the failure of any Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest) the
Loans made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Term Loan, Revolving Credit Loans
or Swing Line Loans, as the case may be, of such Lender, substantially in the
forms of Exhibit G-1, G-2 or G-3, respectively, with appropriate insertions as
to date and principal amount.
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2.9 Commitment Fees, etc., (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Effective Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the first day of each April, July, October and January of each year,
commencing on the first of such dates to occur after the date hereof and on the
Revolving Credit Termination Date.
(b) The Borrower agrees to pay to the Syndication Agent the fees in
the amounts and on the dates previously agreed to in writing by the Borrower and
the Syndication Agent.
(c) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent.
2.10 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Credit
Commitments then in effect. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each Revolving Credit Lender
thereof.
2.11 Optional Prepayments. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent prior to 12:00 Noon,
New York City time, at least three Business Days prior thereto in the case of
Eurodollar Loans or prior to 12:00 Noon, New York City time, at least one
Business Day prior thereto in the case of Base Rate Loans (other than Swing Line
Loans) or prior to 12:00 Noon, New York City time, on the date of such
prepayment in the case of Swing Line Loans, which notice shall specify the date
and amount of prepayment and whether the prepayment is of Eurodollar Loans or
Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day other
than the last day of the Interest Period applicable thereto, the Borrower shall
also pay any amounts then due and owing pursuant to Section 2.21. Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Revolving Credit Loans which are Base Rate Loans and Swing Line
Loans) accrued interest to such date on the amount prepaid. Partial prepayments
of Term Loans and Revolving Credit Loans shall be in a minimum principal amount
of $250,000. Partial prepayments of Swing Line Loans shall be in a minimum
principal amount of $50,000.
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2.12 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Prepayment Lenders shall otherwise agree and without prejudice to
Section 7.2, if any Indebtedness is incurred after the date hereof by Holdings,
the Borrower or any of its Subsidiaries (excluding any Indebtedness incurred in
accordance with Section 7.2 as in effect on the date of this Agreement), an
amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance or incurrence toward the prepayment of the Term Loans and
the reduction of the Revolving Credit Commitments as set forth in Section
2.12(d).
(b) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date Holdings, the Borrower or any of its Subsidiaries shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof within five Business Days
thereafter, 100% of such Net Cash Proceeds shall be applied on such fifth
Business Day toward the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.12(d); provided, that,
notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset
Sales (other than Asset Sales in connection with the Ripon Transition) that may
be excluded from the foregoing requirement pursuant to a Reinvestment Notice
shall not exceed $5,000,000 in any fiscal year of the Borrower, (ii) on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(d) and (iii) for purposes of this
Section 2.12(b), the Net Cash Proceeds of any Asset Sale pursuant to Section
7.5(k) shall be equal to the lesser of (A) the amount of such Net Cash Proceeds
and (B) the aggregate amount of Investments made by Holdings, the Borrower or
any of their respective Subsidiaries in the relevant Foreign Subsidiary after
the Effective Date and, in no event, shall the Net Cash Proceeds of all Asset
Sales in respect of the Capital Stock of any Foreign Subsidiary for purposes of
this Section 2.12(b) exceed the aggregate amount of Investments made by
Holdings, the Borrower and their respective Subsidiaries in such Foreign
Subsidiary after the Effective Date.
(c) Unless the Required Prepayment Lenders shall otherwise agree,
if, for any fiscal year of the Borrower commencing with the fiscal year in which
the Effective Date occurs, there shall be Excess Cash Flow, the Borrower shall,
on the relevant Excess Cash Flow Application Date, apply the ECF Percentage of
such Excess Cash Flow toward the prepayment of the Term Loans and the reduction
of the Revolving Credit Commitments as set forth in Section 2.12(d). Each such
prepayment and commitment reduction shall be made on a date (an "Excess Cash
Flow Application Date") no later than five Business Days after the earlier of
(i) the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) Subject to Section 2.18, amounts to be applied in connection
with prepayments and Commitment reductions made pursuant to this Section shall
be applied, first, to the prepayment of the Term Loans and, second, to reduce
permanently the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of the Revolving
Credit Loans and/or Swing Line Loans to the extent, if any, that the Total
Revolving Extensions of Credit exceed the amount of the Total Revolving Credit
Commitments as so reduced, provided that if the aggregate principal amount of
Revolving Credit
39
Loans and Swing Line Loans then outstanding is less than the amount of such
excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions satisfactory to the Administrative Agent. The application
of any prepayment pursuant to this Section shall be made first to Base Rate
Loans and second to Eurodollar Loans (in a manner, to the extent practicable and
permitted hereunder, which minimizes amounts payable under Section 2.21 as a
result of such prepayment). Each prepayment of the Loans under this Section
(except in the case of Revolving Credit Loans that are Base Rate Loans and Swing
Line Loans) shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
(e) Any prepayment of Loans and/or reduction of Commitments pursuant
to this Section, and the rights of the Lenders in respect thereof, are subject
to the provisions of Section 2.18.
2.13 Conversion and Continuation Options. (a) Subject to Sections 2.2
and 2.5, the Borrower may elect from time to time to convert Eurodollar Loans to
Base Rate Loans by giving the Administrative Agent at least two Business Days'
prior irrevocable notice of such election. The Borrower may elect from time to
time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative
Agent at least three Business Days' prior irrevocable notice of such election
(which notice shall specify the length of the initial Interest Period therefor),
provided that no Base Rate Loan under a particular Facility may be converted
into a Eurodollar Loan (i) when any Event of Default has occurred and is
continuing and the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such conversions or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
(b) Subject to Sections 2.2 and 2.5, any Eurodollar Loan may be
continued as such upon the expiration of the then current Interest Period with
respect thereto by the Borrower giving irrevocable notice to the Administrative
Agent, in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1.1, of the length of the next Interest Period to
be applicable to such Loans, provided that no Eurodollar Loan under a particular
Facility may be continued as such (i) when any Event of Default has occurred and
is continuing and the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so
40
that, (a) after giving effect thereto, the minimum principal amount of the
Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000
or a whole multiple of $100,000 in excess thereof and (b) no more than eight
Eurodollar Tranches shall be outstanding at any one time.
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%
or (y) in the case of Reimbursement Obligations, the rate applicable to Base
Rate Loans under the Revolving Credit Facility plus 2%, and (ii) if all or a
portion of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall (to the extent permitted by applicable law) bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Credit Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.16 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request
41
of the Borrower, deliver to the Borrower a statement showing the quotations used
by the Administrative Agent in determining any interest rate pursuant to Section
2.15(a).
2.17 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower, absent
manifest error) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate in accordance with the terms thereof for such Interest
Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the first day of such Interest Period,
to Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans under the relevant Facility shall be made or
continued as such, nor shall the Borrower have the right to convert Loans under
the relevant Facility to Eurodollar Loans. The Administrative Agent shall
withdraw (i) any such notice pursuant to clause (a) above if the Administrative
Agent determines that the relevant circumstances have ceased to exist and (ii)
any such notice pursuant to clause (b) above upon receipt of notice from the
Majority Facility Lenders in respect of the relevant Facility that the relevant
circumstances described in such clause (b) have ceased to exist.
2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Loan Percentages or Revolving
Credit Percentages, as the case may be, of the relevant Lenders. Each payment
(other than prepayments) in respect of principal or interest in respect of the
Loans, each payment in respect of fees payable hereunder, and each payment in
respect of Reimbursement Obligations, shall be applied to the amounts of such
obligations owing to the Lenders pro rata according to the respective amounts
then due and owing to the Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Term Loans shall be made
pro rata according to the respective outstanding principal amounts of
the Term Loans then held by the Term Loan Lenders (except as otherwise
provided in Section 2.18(d)). The amount of each principal prepayment
of the Term Loans shall be applied to reduce the then remaining
installments of the Term Loans, pro rata
42
based upon the then remaining principal amount thereof. Amounts prepaid on
account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Section 2.12 or this
Section, after the aggregate principal amount of the Term Loans has been reduced
to $140,000,000, each Term Loan Lender may, at its option, decline all or any
portion of any mandatory prepayment applicable to the Term Loans of such Lender;
accordingly, with respect to the amount of any mandatory prepayment described in
Section 2.12 that is allocated to the Term Loans (such amounts, the "Prepayment
Amount") the Borrower will, in lieu of applying such amount to the prepayment of
Term Loans as provided in Section 2.12(d), on the date specified in Section 2.12
for such prepayment, give the Administrative Agent telephonic notice (promptly
confirmed in writing) of the aggregate amount required to be applied to prepay
Term Loans and requesting that the Administrative Agent prepare and provide to
each Term Loan Lender a notice (each, a "Prepayment Option Notice") as described
below. As promptly as practicable after receiving such notice from the Borrower,
the Administrative Agent will send to each Term Loan Lender a Prepayment Option
Notice, which shall be in the form of Exhibit H and shall include an offer by
the Borrower to prepay on the date (each a "Prepayment Date") that is 10
Business Days after the date of the Prepayment Option Notice, the Term Loan of
such Term Loan Lender by an amount equal to the portion of the Prepayment Amount
indicated in such Lender's Prepayment Option Notice as being applicable to such
Lender's Term Loans. On the Prepayment Date, (i) the Borrower shall pay to the
Administrative Agent the aggregate amount necessary to prepay that portion of
the outstanding relevant Term Loans in respect of which Lenders have accepted
full or partial prepayment as described above (such Lenders, the "Accepting
Lenders") as notified by the Administrative Agent to the Borrower, and such
amount shall be applied to reduce the Prepayment Amounts, as applicable, with
respect to each Accepting Lender, (ii) the Revolving Credit Commitments shall be
reduced by an amount equal to 50% of the portion of the Prepayment Amount not
accepted by the Term Loan Lenders (and, such reduction shall be accompanied by
prepayment of the Revolving Credit Loans and/or Swing Line Loans to the extent,
if any, that the Total Revolving Extensions of Credit exceed the amount of the
Total Revolving Credit Commitments as so reduced, provided that if the aggregate
principal amount of Revolving Credit Loans and Swing Line Loans then outstanding
is less than the amount of such excess (because L/C Obligations constitute a
portion thereof), the Borrower shall, to the extent of the balance of such
excess, replace outstanding Letters of Credit and/or deposit an amount in cash
in a cash collateral account established with the Administrative Agent for the
benefit of the Lenders on terms and conditions satisfactory to the
Administrative Agent) and (iii) the Borrower shall be entitled to retain the
remaining 50% of the portion of the Prepayment Amount not accepted by the
Lenders.
(e) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 2:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in
43
Dollars and in immediately available funds. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, but shall not be required to, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be presumed correct in the absence of manifest error. If such Lender's
share of such borrowing is not made available to the Administrative Agent by
such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to Base Rate Loans under the relevant
Facility, on the Business Day following the date of demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.19 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar
44
Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.20 and changes in the rate of tax on the overall net income
or profits of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
within 10 days of its demand therefor, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event in reasonable detail by reason of which it
has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor setting forth in reasonable detail the
basis therefor, the Borrower shall pay to such Lender within 10 days after
receipt of such request such additional amount or amounts as will compensate
such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.19 or Section 2.21, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled, provided that no Lender shall be entitled to
claim any such additional amount with respect to the period which is more than
180 days prior to the delivery of such notice. A certificate as to any
additional amounts payable pursuant to this Section 2.19 or Section 2.21
submitted by such Lender to the Borrower (with a copy to the Administrative
Agent) setting forth in reasonable detail the calculation of such amounts and
the basis therefor shall be presumptively correct in the absence of manifest
error. The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
45
2.20 Taxes. Except as otherwise provided herein, all payments made by
the Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on any Agent or any Lender as a
result of a present or former connection between such Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely and directly from such Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to any Agent or any Lender hereunder, the amounts so
payable to such Agent or such Lender shall be increased to the extent necessary
to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes
and Other Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or (e) of this
Section or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender or Participant at the time the Lender or Participant
becomes a party to this Agreement, except to the extent that such Lender's
assignor (if any) was entitled, at the time of assignment, to receive additional
amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to
Section 2.20(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.20 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a United States Person as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly
46
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents, together with any other certificate or
statement of exemption required under the Codes or Regulations issued
thereunder. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund or
otherwise would have received a refund but for the offset of the amount of such
refund against the Lender's Non-Excluded Taxes ("Tax Refund"), which in the good
faith judgment of such Lender is allocable to Non-Excluded Taxes paid by the
Borrower, it shall promptly pay such Tax Refund to the Borrower, net of all
out-of-pocket expenses of such Lender incurred in obtaining such Tax Refund,
provided, however, that the Borrower agrees to promptly return such Tax Refund
to the Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from the Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such Tax Refund but only if
such repayment is required because the initial Tax Refund was permitted in
error.
2.21 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense (other than any loss of
Applicable Margin) which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert
47
or continue to the last day of such Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. A certificate as to any amounts
payable pursuant to this Section submitted to the Borrower by any Lender shall
be presumptively correct in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.22 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.21.
2.23 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.19 or 2.20(a)
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 affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.19 or 2.20(a).
2.24 Replacement of Lenders under Certain Circumstances. The Borrower
shall be permitted to (a) replace any Lender which (i) defaults in its
obligation to make Loans hereunder, (ii) is not required to make Eurodollar
Loans pursuant to Section 2.22 or (iii) in connection with any proposed
amendment, modification, supplement or waiver with respect to any of the
provisions of the Loan Documents as contemplated in Section 10.1 where such
amendment, modification, supplement or waiver has been approved by the Required
Lenders (and, if applicable, the Required Prepayment Lenders and/or Majority
Facility Lenders) in accordance with such Section, fails to consent to any such
proposed action and (b) replace or remove any Lender which requests
reimbursement for amounts owing pursuant to Section 2.19 or 2.20 and, if the
Borrower elects to remove such Lender, terminate such Lender's Revolving Credit
Commitment hereunder; provided that (A) (i) such replacement or removal, as the
case may be, does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement or
removal, as the case may be, (iii) prior to any such replacement or removal, as
the case may be, pursuant to clause (b) above
48
such Lender shall have taken no action under Section 2.23 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.19 or 2.20,
(iv) the Borrower shall be liable to such replaced or removed Lender under
Section 2.21 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto and
(v) any such replacement or removal, as the case may be, shall not be deemed to
be a waiver of any rights which the Borrower, the Administrative Agent or any
other Lender shall have against the replaced or removed Lender, (B) in the case
of replacement of a Lender under this Section 2.24, (i) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (ii) the
replacement financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (iii) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
10.6 (provided that no registration and processing fee referred to therein shall
be required to be paid in connection therewith), and (iv) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.19 or 2.20, (C) if the Borrower
elects to remove a Lender under clause (b) of this Section 2.24 and if such
Lender has any Loans outstanding at such time, the consent of the Administrative
Agent and the Required Lenders shall be required to terminate such Lender's
Revolving Credit Commitment and (D) in the case of replacement of a
non-consenting Lender under clause (a)(iii) of this Section 2.24, the Borrower
shall replace such Lender within 60 days of such Lender's failure to consent to
the proposed action.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
(i) each Issuing Lender which is a Lender, in reliance on the agreements of the
other Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower on any
Business Day during the Revolving Credit Commitment Period in such form as may
be approved from time to time by such Issuing Lender and (ii) in the event the
Issuing Lender is not a Lender, the Administrative Agent, in reliance on the
agreements of the other Revolving Credit Lenders set forth in Section 3.4(a),
agrees to cause Letters of Credit to be issued by an Issuing Lender for the
account of the Borrower on any Business Day during the Revolving Credit
Commitment Period in such form as may be approved from time to time by such
Issuing Lender; provided that no Issuing Lender shall have any obligation to nor
shall any Issuing Lender issue any Letter of Credit and the Administrative Agent
shall not have any obligation to and shall not cause any Letter of Credit to be
issued if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Revolving Credit Termination Date, provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform Customs or
ISP98, as applicable, and, to the extent not inconsistent therewith, the laws of
the State of New York.
49
(c) No Issuing Lender shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law. The Administrative Agent shall not at any time be
obligated to cause any Letter of Credit to be issued hereunder if such issuance
would conflict with, or cause the Administrative Agent, such Issuing Lender or
any L/C Participant to exceed any limits imposed by, any applicable Requirement
of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may from
time to time request that an Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender and the Administrative Agent at their
respective addresses for notices specified herein an Application therefor,
completed to the satisfaction of the relevant Issuing Lender and the
Administrative Agent, and such other certificates, documents and other papers
and information as the Issuing Lender or the Administrative Agent may request.
In the case of any Letter of Credit to be issued by an Issuing Lender which is a
Lender, upon receipt of any Application, such Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall such Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and
the Borrower. In the case of any Letter of Credit not to be issued by an Issuing
Lender which is a Lender, upon receipt of any Application, the Administrative
Agent shall cause such Issuing Lender to process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and to promptly
issue the Letter of Credit requested thereby (but in no event shall the
Administrative Agent be required to cause such Issuing Lender to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Administrative Agent and the Borrower. The relevant Issuing Lender shall furnish
a copy of such Letter of Credit to the Borrower and the Administrative Agent
promptly following the issuance thereof. The Issuing Lender shall promptly
furnish to the Administrative Agent, which shall in turn promptly furnish to the
Lenders, notice of the issuance of each Letter of Credit (including the amount
and expiration date thereof).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on the
undrawn face amount of all outstanding Letters of Credit at a per annum rate
equal to the Applicable Margin then in effect with respect to Eurodollar Loans
under the Revolving Credit Facility, shared ratably among the Revolving Credit
Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date. In addition, (i) in the case of any Letter of Credit issued by an
Issuing Lender which is a Lender, the Borrower shall pay to such Issuing Lender
for its own account a fronting fee on the undrawn face amount of all outstanding
Letters of Credit issued by such Issuing Lender at a rate per annum of 0.25%,
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date and (ii) in the case of any Letter of Credit issued by an Issuing Lender
which is not a Lender, the Borrower shall pay to the Administrative Agent
50
for its own account a fronting fee on the undrawn face amount of all outstanding
Letters of Credit issued by such Issuing Lender which is not a Lender at a rate
per annum to be agreed by the Administrative Agent and the Borrower payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse each Issuing Lender for such normal, reasonable and customary costs
and expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit issued by it.
3.4 L/C Participations. (a) (i) In the case of Letters of Credit
issued by an Issuing Lender which is a Lender, such Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce such
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
such Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in such Issuing Lender's obligations
and rights under each Letter of Credit issued by such Issuing Lender hereunder
and the amount of each draft paid by such Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with each such Issuing Lender
that, if a draft is paid under any Letter of Credit for which such Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such L/C Participant shall pay to such Issuing Lender upon
demand at such Issuing Lender's address for notices specified herein an amount
equal to such L/C Participant's Revolving Credit Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(ii) In the case of Letters of Credit issued by an Issuing
Lender which is not a Lender, the Administrative Agent irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the
Administrative Agent to cause such Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Administrative Agent, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Percentage in the Administrative Agent's obligations and rights under each such
Letter of Credit issued hereunder and the amount of each payment made by the
Administrative Agent in respect of any draft paid by such Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with the
Administrative Agent that, if the Administrative Agent makes a payment in
respect of a draft paid under any such Letter of Credit for which the
Administrative Agent is not reimbursed in full by the Borrower in accordance
with the terms of this Agreement, such L/C Participant shall pay to the
Administrative Agent upon demand at the Administrative Agent's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Credit Percentage of the amount of such payment, or any part thereof, which is
not so reimbursed.
(b) If any amount required to be paid by any L/C Participant pursuant
to Section 3.4(a) in respect of any unreimbursed portion of any payment made by
the relevant Issuing Lender or the Administrative Agent, as the case may be,
under any Letter of Credit is paid to the relevant Issuing Lender or the
Administrative Agent, as the case may be, within three Business Days after the
date such payment is due (provided that demand for payment is received
51
prior to 2:00 P.M., New York City time), such L/C Participant shall pay to the
relevant Issuing Lender or the Administrative Agent, as the case may be, on
demand an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Effective Rate during the period from and including the
date such payment is required to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. If any such amount required to be paid by any L/C Participant
pursuant to Section 3.4(a) is not made available to the relevant Issuing Lender
or the Administrative Agent, as the case may be, by such L/C Participant within
three Business Days after the date such payment is due, such Issuing Lender or
the Administrative Agent, as the case may be, shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Base Rate Loans under the
Revolving Credit Facility. A certificate of the relevant Issuing Lender or the
Administrative Agent submitted to any L/C Participant with respect to any
amounts owing under this Section shall be presumed correct in the absence of
manifest error.
(c) Whenever, at any time after an Issuing Lender or the
Administrative Agent has made payment under or in respect of any Letter of
Credit and has received from any L/C Participant its pro rata share of such
payment in accordance with Section 3.4(a), such Issuing Lender or the
Administrative Agent receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the relevant Issuing Lender or the Administrative
Agent, as the case may be), or any payment of interest on account thereof, such
Issuing Lender or the Administrative Agent, as the case may be, will distribute
to such L/C Participant its pro rata share thereof; provided, however, that in
the event that any such payment received by such Issuing Lender or the
Administrative Agent shall be required to be returned by such Issuing Lender or
the Administrative Agent, as the case may be, such L/C Participant shall return
to such Issuing Lender or the Administrative Agent, as the case may be, the
portion thereof previously distributed by such Issuing Lender or the
Administrative Agent, as the case may be, to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees, in
accordance with the terms of the provisions of this Section, to reimburse (a) in
the case of any Letter of Credit issued by an Issuing Lender which is a Lender,
such Issuing Lender for the amount of (i) such draft so paid and (ii) any taxes,
fees, charges or other costs or expenses incurred by the Issuing Lender in
connection with such payment and (b) in the case of any Letter of Credit issued
by an Issuing Lender which is not a Lender, the Administrative Agent for the
amount of any payment made by the Administrative Agent in respect of any drawing
under any such Letter of Credit. Each such payment shall be made to the relevant
Issuing Lender or the Administrative Agent, as the case may be, at its address
for notices specified herein in lawful money of the United States of America and
in immediately available funds. If any draft shall be presented for payment
under any Letter of Credit, (a) in the case of any Letter of Credit issued by an
Issuing Lender which is a Lender, such Issuing Lender shall promptly notify the
Borrower of the date and amount thereof and (b) in the case of any Letter of
Credit issued by an Issuing Lender which is not a Lender, the Administrative
Agent shall promptly notify the Borrower of the date and amount thereof. If the
relevant Issuing Lender or the Administrative Agent, as the case may be,
notifies the Borrower prior to 12:00 Noon, New York City time, on any Business
Day, of any drawing under any Letter of Credit, the Borrower shall reimburse
such Issuing
52
Lender or the Administrative Agent, as the case may be, pursuant to this Section
with respect to such drawing on the next Business Day. If the relevant Issuing
Lender or the Administrative Agent, as the case may be, notifies the Borrower
after 12:00 Noon, New York City time, on any Business Day of any drawing under
any Letter of Credit, the Borrower shall reimburse such Issuing Lender or the
Administrative Agent, as the case may be, pursuant to this Section with respect
to such drawing on the second succeeding Business Day. Interest shall be payable
on any and all amounts remaining unpaid by the Borrower under this Section from
the date of the related drawing until payment in full at the rate set forth in
(i) until the second Business Day following the date of such drawing, Section
2.15(b) and (ii) thereafter, Section 2.15(c). Each drawing under any Letter of
Credit shall (unless an event of the type described in clause (i) or (ii) of
Section 8(f) shall have occurred and be continuing with respect to the Borrower,
in which case the procedures specified in Section 3.4 for funding by L/C
Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.5 of Base Rate Loans
(or, at the option of the Administrative Agent and the Swing Line Lender in
their sole discretion, a borrowing pursuant to Section 2.7 of Swing Line Loans)
in the amount of such drawing. The Borrowing Date with respect to such borrowing
shall be the date of such drawing.
3.6 Obligations Absolute. Except as otherwise provided in this
Section, the Borrower's obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Issuing Lender, the Administrative Agent, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lenders and the Administrative Agent that the Issuing Lenders and the
Administrative Agent shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lenders
and the Administrative Agent shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions resulting from the gross negligence or willful misconduct of
the relevant Issuing Lender or the Administrative Agent, as the case may be. The
Borrower agrees that any action taken or omitted by the Issuing Lenders and the
Administrative Agent under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Customs and the Uniform Commercial Code of the State of New York, shall
be binding on the Borrower and shall not result in any liability of the Issuing
Lenders or the Administrative Agent to the Borrower.
3.7 Letter of Credit Payments. The responsibility of the Issuing
Lenders to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
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3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, Holdings
and the Borrower hereby jointly and severally represent and warrant to each
Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at March 31, 2002
(including the notes thereto) (the "Pro Forma Balance Sheet"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the Loans to be made on the
Effective Date and the use of proceeds thereof and (ii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the best information reasonably available to Holdings as of
the date of delivery thereof and on good faith estimates and assumptions
believed to be reasonable at the time made, and presents fairly in all material
respects on a pro forma basis the estimated financial position of Holdings and
its consolidated Subsidiaries as at March 31, 2002, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheet of Holdings and its
consolidated Subsidiaries as at December 31, 2000 and December 31, 2001, and the
related consolidated statements of income and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by an unqualified report
from PricewaterhouseCoopers L.L.P., present fairly in all material respects the
financial condition of Holdings and its consolidated Subsidiaries as at such
date, and the results of its operations and its cash flows for the respective
fiscal years then ended. The unaudited consolidated balance sheet of Holdings
and its consolidated Subsidiaries as at March 31, 2002, and the related
unaudited consolidated statements of income and cash flows for the three-month
period ended on such date, present fairly in all material respects the
consolidated financial condition of Holdings and its consolidated Subsidiaries
as at such date, and the combined results of its operations and its combined
cash flows for the three-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein and for the absence of
certain notes thereto). Except as set forth on Schedule 4.1(b), as of the
Effective Date, Holdings, the Borrower and their respective Subsidiaries (i) do
not have any material Guarantee Obligations, contingent liabilities or
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including, without limitation, any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, which are not reflected in the most recent financial statements
referred to in this paragraph but which would in accordance with GAAP be so
reflected in a consolidated balance sheet of the Borrower as of the Effective
Date or (ii) are not party to any arrangement to pay principal or interest with
respect to any Indebtedness of any Person which is not reflected in the most
recent financial statements referred to in this paragraph, (x) which was
incurred by the Borrower or any of its Subsidiaries or guaranteed by the
Borrower
54
or any of its Subsidiaries at any time or the proceeds of which are or were
transferred to or used by the Borrower or any of its Subsidiaries and (y) the
payments in respect of which are intended to be made with the proceeds of
payments to such Person by the Borrower or any of its consolidated Subsidiaries
or with any Indebtedness or Capital Stock issued by the Borrower or any such
Subsidiary.
4.2 No Change. Since December 31, 2001 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.
4.3 Existence; Compliance with Law. Each of Holdings, the Borrower
and their respective Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the power and authority, and the legal right, to own and operate its Property,
to lease the Property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such
qualification, except to the extent the failure to be so qualified and/or in
good standing could not reasonably be expected to have a Material Adverse
Effect, and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
4.4 Power; Authorization; Enforceable Obligations. Each Loan Party
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and, in the case of the Borrower, to
borrow hereunder. Each Loan Party has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party and, in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents, except (i)
the filings referred to in Section 4.19 and (ii) consents, authorizations,
filings and notices required after the Effective Date in the ordinary course of
business which have been obtained or made and are in full force and effect. Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
party thereto. This Agreement and each other Loan Document constitutes a legal,
valid and binding obligation of each Loan Party party thereto, enforceable
against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of Holdings, the Borrower or
any of their respective Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). No Contractual
Obligation applicable to the
55
Borrower or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
4.6 No Material Litigation. Except as disclosed on Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Holdings or the
Borrower, threatened by or against Holdings, the Borrower or any of their
respective Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or (b) which could
reasonably be expected to have a Material Adverse Effect.
4.7 No Default. Neither Holdings, the Borrower nor any of their
respective Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
4.8 Ownership of Property; Liens. Each of Holdings, the Borrower and
their respective Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its material real property, and good title to, or a valid
leasehold interest in, all its other Property material to the conduct of its
Business, and none of such Property is subject to any Lien except as permitted
by Section 7.3.
4.9 Intellectual Property. Holdings, the Borrower and each of their
respective Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted, except for any
failure to so own or license Intellectual Property which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No claim has been asserted and is pending by any Person against Holdings, the
Borrower or any of their respective Subsidiaries challenging or questioning the
use of any Intellectual Property by Holdings, the Borrower or any of their
respective Subsidiaries or the validity or effectiveness of any Intellectual
Property used by Holdings, the Borrower or any of their respective Subsidiaries,
except for any claims which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. The use of
Intellectual Property by Holdings, the Borrower and their respective
Subsidiaries does not infringe on the rights of any Person in any material
respect and in any manner which could reasonably be expected to have a Material
Adverse Effect.
4.10 Taxes. Each of Holdings, the Borrower and each of their
respective Subsidiaries has filed or caused to be filed all Federal, state and
other material tax returns which are required to be filed and has paid all
material taxes shown to be due and payable on said returns prior to the date
penalties or interest attach thereto or on any assessments made against it or
any of its Property and all other material taxes, fees or other charges imposed
on it or any of its Property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Holdings, the Borrower or their
respective Subsidiaries, as the case may be); no tax Lien has been filed which
is not permitted under Section 7.3, and, to the knowledge of Holdings and the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
56
4.11 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under or Regulation U as now and from time
to time hereafter in effect or for any purpose which violates the provisions of
the Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in Regulation U.
4.12 Labor Matters. There are no strikes or other labor disputes
against Holdings, the Borrower or any of their respective Subsidiaries pending
or, to the knowledge of Holdings or the Borrower, threatened that (individually
or in the aggregate) could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of Holdings, the Borrower
and their respective Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters that (individually or in the aggregate) could reasonably be expected to
have a Material Adverse Effect. All payments due from Holdings, the Borrower or
any of their respective Subsidiaries on account of employee health and welfare
insurance that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of Holdings, the Borrower or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan
which has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15 constitute
all the Subsidiaries of Holdings and the Borrower at the date hereof.
57
4.16 Use of Proceeds. The proceeds of the Term Loans were used
to finance the Recapitalization and to pay related fees and expenses. The
proceeds of the Revolving Credit Loans and the Swing Line Loans, and the Letters
of Credit, were used to finance a portion of the Recapitalization and to pay
related fees and expenses and for general corporate and working capital
purposes.
4.17 Environmental Matters. Except as set forth on Schedule
4.17:
(a) The facilities and properties owned, leased or operated by
Holdings, the Borrower or any of their respective Subsidiaries (the
"Properties") do not contain any Materials of Environmental Concern in
amounts or concentrations or under circumstances which (i) constitute
a violation of, or (ii) could give rise to liability under, any
Environmental Law, except in either case insofar as such violation or
liability, or any aggregation thereof, could not reasonably be
expected to result in a Material Adverse Effect.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, except for any
failures to comply which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, and
there is no contamination at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or
the business operated by Holdings, the Borrower or any of their
respective Subsidiaries (the "Business") which could reasonably be
expected to result in a Material Adverse Effect. Neither Holdings, the
Borrower nor any of their respective Subsidiaries has assumed any
liability of any other Person under Environmental Laws which could
reasonably be expected to have a Material Adverse Effect.
(c) Neither Holdings, the Borrower nor any of their respective
Subsidiaries has received any written notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does Holdings or
the Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened, except insofar as such notice
or threatened notice, or any aggregation thereof, does not involve a
matter or matters that constitute a breach of any other representation
contained in this Section 4.17.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in
a manner or to a location which could give rise to liability under,
any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law, except insofar as
any such violation or liability referred to in this paragraph, or any
aggregation thereof, could not reasonably be expected to result in a
Material Adverse Effect.
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(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of Holdings or the Borrower,
threatened, under any Environmental Law to which Holdings, the
Borrower or any of their respective Subsidiaries is or will be named
as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business, except insofar as such
proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to result in a
Material Adverse Effect.
(f) There has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of Holdings, the Borrower or any of their
respective Subsidiaries in connection with the Properties or otherwise
in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws,
except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, could not reasonably be expected
to result in a Material Adverse Effect.
4.18 Accuracy of Information, etc. Subject to the next succeeding
sentence and to the qualification provided therein, no statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Administrative Agent or the Lenders or any of them, by or on behalf of
any Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, taken as a whole, contained as of the
date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein, taken as
a whole, not misleading. The projections and pro forma financial information and
the industry-related information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, stock
certificates representing such Pledged Stock having been delivered to the
Administrative Agent, together with proper endorsements executed in blank and,
in the case of the UCC Filing Collateral described in the Guarantee and
Collateral Agreement, financing statements specified
59
on Schedule 4.19(a) in appropriate form having been filed in the offices
specified on Schedule 4.19(a), the Guarantee and Collateral Agreement, except as
otherwise provided therein, constitutes a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Guarantee and Collateral Agreement), in each case prior and superior in
right to any other Person other than Liens permitted under Section 7.3 (except
Section 7.3(j)).
(b) Each Mortgage (as amended by the respective Mortgage
Amendment, if any) is effective to create in favor of the Administrative Agent,
for the benefit of the Secured Parties, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds thereof, and when the
Mortgages or Mortgage Amendments, as applicable, are filed in the offices
specified on Schedule 4.19(b), such Mortgage or Existing Mortgage (as amended by
the respective Mortgage Amendment), as the case may be, shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Mortgaged Properties and the proceeds thereof, as
security for the Obligations (as defined in the relevant Mortgage or Existing
Mortgage (as amended by the respective Mortgage Amendment)), in each case prior
and superior in right to any other Person other than Liens permitted under
Section 7.3 (except Section 7.3(j)). Schedule 1.1 lists each parcel of real
property in the United States owned in fee simple by the Borrower or any of its
Subsidiaries as of the Effective Date which, as of such date, has a value, in
the reasonable opinion of the Borrower, in excess of $1,000,000.
4.20 Solvency. The Loan Parties are, and after giving effect to
the incurrence of all Indebtedness and obligations being incurred in connection
herewith will be and will continue to be, Solvent.
4.21 Senior Indebtedness. All "Indebtedness" outstanding
hereunder constitutes "Senior Debt" and "Designated Senior Debt" of the
Borrower. No "Indebtedness" (other than "Indebtedness" outstanding hereunder)
has been designated as "Designated Senior Debt" under the Senior Subordinated
Note Indenture (as each quoted term is defined in the Senior Subordinated Note
Indenture).
4.22 Regulation H. No Mortgage, other than Mortgages for which
the Borrower has delivered notice to the Administrative Agent, encumbers
improved real property which is located in an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to August 18, 2002 and prior to or
concurrently with the making of such extension of credit on the Effective Date,
of the following conditions precedent:
(a) Loan Documents. The Syndication Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer
of Holdings and the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly
60
authorized officer of Holdings, the Borrower and each Subsidiary
Guarantor, (iii) to the extent requested on or prior to the Effective
Date, for the account of each relevant Lender, Notes conforming to the
requirements hereof and executed and delivered by a duly authorized
officer of the Borrower and (iv) a Lender Addendum executed and
delivered by each Lender and accepted by the Borrower.
(b) Required Lenders under Existing Credit Agreement. The
Syndication Agent shall have received (i) with respect to all
amendments, written consents from Lenders (as defined in the Existing
Credit Agreement) which constitute Required Lenders (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement and (ii)
with respect to the amendment of Section 2.3, written consent from
Lenders (as defined in the Existing Credit Agreement) which constitute
Majority Revolving Credit Facility Lenders (as defined in the Existing
Credit Agreement) under the Existing Credit Agreement and each of the
Term Loan Lenders (as defined in the Existing Credit Agreement), to the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (it being agreed that the execution of
a Lender Addendum shall constitute such written consent).
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of Holdings and its consolidated
Subsidiaries for the 2000 and 2001 fiscal years and (iii) interim
consolidated financial statements of Holdings and its consolidated
Subsidiaries for the three-month period ended on or about March 31,
2002, and such interim financial statements shall not, in the
reasonable judgment of the Lenders, reflect any material adverse change
in the consolidated financial condition of Holdings and its
consolidated Subsidiaries, as reflected in the financial statement or
projections contained in the Confidential Information Memorandum.
(d) Approvals. All governmental and third party approvals
(including landlords' and other consents) necessary in connection with
this Agreement, the continuing operations of Holdings, the Borrower and
their respective Subsidiaries and the transactions contemplated hereby
shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on this Agreement or the
financing contemplated hereby.
(e) Fees. The Lenders, the Syndication Agent, the Arranger and
the Administrative Agent shall have received all fees required to be
paid (including the commitment fee required to be paid pursuant to
Section 2.9 of the Existing Credit Agreement), and all expenses for
which invoices have been presented, on or before the Effective Date.
All such amounts will be paid with proceeds of Loans made on the
Effective Date and will be reflected in the funding instructions given
by the Borrower to the Administrative Agent on or before the Effective
Date.
(f) Business Plan. The Lenders shall have received a satisfactory
business plan for fiscal years 2002-2007, and any differences between
such information and
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corresponding information provided in writing to the Syndication Agent
previously shall be satisfactory to the Syndication Agent in all
material respects.
(g) Solvency Certificate. The Lenders shall have received a
solvency certificate from the chief financial officer of Holdings which
shall document the solvency of Holdings and its Subsidiaries considered
as a whole and of Holdings and its Subsidiaries considered as a whole
after giving effect to this Agreement and the transactions contemplated
hereby and shall otherwise be in form and substance satisfactory to the
Lenders.
(h) Closing Certificate. The Syndication Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Effective Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(i) Legal Opinions. The Agents shall have received the
legal opinion of Kirkland & Ellis, counsel to Holdings and its
Subsidiaries, substantially in the form of Exhibit F. Such legal
opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Agents may reasonably require.
(j) Mortgages, etc. (i) The Administrative Agent shall have
received the Mortgage Amendments executed and delivered by a duly
authorized officer of each party thereto.
(ii) In respect of each Existing Title Policy, an
endorsement or endorsements (collectively, the
"Endorsements") or marked up unconditional binder for the
issuance of such Endorsements dated on or about the
Effective Date. Each of the Endorsements shall modify the
relevant Existing Title Policy to (A) insure that the
Existing Mortgage (as amended) insured thereby continues to
be a valid first Lien on the relevant Mortgaged Property
encumbered thereby free and clear of all defects and
encumbrances, except those permitted by Section 7.3 and as
disclosed therein; (B) name the Administrative Agent for the
benefit of the Secured Parties as the insured thereunder;
and (C) be in form and substance reasonably satisfactory to
the Administrative Agent. The Administrative Agent shall
have received evidence reasonably satisfactory to it that
all premiums in respect of each of the Endorsements, and all
charges for mortgage recording tax and all related expenses,
if any, have been paid. The Administrative Agent shall have
also received a copy of all recorded documents referred to,
or listed as exceptions to title in, the Endorsements
referred to in this subsection and a copy of all other
documents affecting the Mortgaged Property encumbered by the
Existing Mortgage (as amended) as shall have been reasonably
requested by the Administrative Agent.
(k) Exiting Lenders; Repayment of Loans under Existing
Credit Agreement. The Administrative Agent shall have received evidence
reasonably satisfactory to it that (i) the Lenders (as defined in the
Existing Credit Agreement) which will not become parties hereto (and
will not have a Revolving Credit Commitment or Term Loan Commitment
hereunder) (the "Exiting Lenders") shall have been or shall
concurrently be
62
relieved of all obligations in respect of their Commitments (as defined
in the Existing Credit Agreement), (ii) each Exiting Lender's Revolving
Credit Loans (as defined in the Existing Credit Agreement) outstanding
under the Existing Credit Agreement shall have been or shall
concurrently be repaid in full, together with any accrued interest
thereon and any accrued fees payable under the Existing Credit
Agreement to but excluding the Effective Date, (iii) each Exiting Term
Loan Lender's Term Loan (as defined in the Existing Credit Agreement)
outstanding under the Existing Credit Agreement shall have been or
shall concurrently be repaid in full, together with any accrued
interest thereon and any accrued fees payable under the Existing Credit
Agreement to but excluding the Effective Date, and (iv) each Continuing
Term Loan Lender's Term Loan (as defined in the Existing Credit
Agreement) outstanding under the Existing Credit Agreement shall have
been or shall concurrently be repaid to the extent that its principal
amount, together with any accrued interest thereon and any accrued fees
payable under the Existing Credit Agreement to but excluding the
Effective Date, exceeds the amount of such Continuing Term Loan
Lender's Term Loan Commitment hereunder.
(l) Perfection Certificate. The Administrative Agent shall have
received (i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded to create or perfect the Liens intended to be created under
the Guarantee and Collateral Agreement, and (ii) a completed Perfection
Certificate dated the Effective Date and signed by an executive officer
or financial officer of the Borrower.
(m) Insurance. The Administrative Agent shall have received a
certificate of insurance specifying insurance coverage in place on the
Effective Date in compliance with Section 5.3 of the Guarantee and
Collateral Agreement and loss payee endorsement in favor of the
Administrative Agent with respect to casualty insurance.
(n) Intercreditor Agreement. The Administrative Agent shall have
received an intercreditor agreement, executed and delivered by the
agent for the Initial Receivables Facility, in form and substance
reasonably acceptable to the Administrative Agent.
5.2 Conditions to Each Extension of Credit. Except as otherwise
expressly provided herein, no Lender shall be obligated to make any extension of
credit requested to be made by it on any date (including, without limitation,
its initial extension of credit), if, as of the date thereof:
(a) Representations and Warranties. Any representation or
warranty made by any Loan Party in or pursuant to the Loan Documents
shall be in any material respect untrue or incorrect on and as of such
date as if made on and as of such date and the Required Lenders shall
have determined not to make any extension of credit as a result of the
fact that such representation or warranty is untrue or incorrect in any
material respect.
(b) No Default. A Default or Event of Default has occurred and
is continuing or would result after giving effect to any extension of
credit requested to be made on such
63
date and the Required Lenders shall have determined not to make any
extension of credit as a result of that Default or Event of Default.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit (which
has not been cash collateralized in the manner described in the final paragraph
of Section 8) remains outstanding or any Loan or other amount is owing
(including, without limitation, accrued interest and fees) to any Lender or any
Agent hereunder, each of Holdings and the Borrower shall and shall cause each of
their respective Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent (for
distribution to the Lenders) and to the Syndication Agent:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of Holdings, a copy of (i) the audited
consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, in
each case setting forth in comparative form the figures for the
previous year, reported on without a `going concern' or like
qualification or exception, or qualification arising out of the scope
of the audit, by PricewaterhouseCoopers L.L.P. or other independent
certified public accountants of nationally recognized standing and (ii)
a schedule showing the Borrower and its consolidated Subsidiaries, and
Holdings, each on a stand-alone basis for the periods set forth in
clause (i) above, which schedules are based on the financial statements
described in clause (i) above;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each
fiscal year of Holdings, a copy of (i) the unaudited consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at the
end of such quarter and the related unaudited consolidated statements
of income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each case
in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of
certain footnotes) and (ii) a schedule showing the Borrower and its
consolidated Subsidiaries, and Holdings, each on a stand-alone basis
for the periods set forth in clause (i) above, which schedules are
based on the financial statements described in clause (i) above; and
(c) as soon as available, but in any event not later than 30 days
after the end of each month occurring during each fiscal year of
Holdings (other than the third, sixth, ninth and twelfth such month), a
copy of (i) the unaudited consolidated balance sheets of Holdings and
its consolidated Subsidiaries as at the end of such month and the
related
64
unaudited consolidated statements of income and of cash flows for such
month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments and the absence of certain footnotes) and (ii) a schedule
showing the Borrower and its consolidated Subsidiaries, and Holdings,
each on a stand-alone basis for the periods set forth in clause (i)
above, which schedules are based on the financial statements described
in clause (i) above;
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to the Administrative
Agent (for distribution to each Lender) and to the Syndication Agent or, in the
case of clause (h), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default under Section 7.1,
except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
(ii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information necessary for
determining compliance by Holdings, the Borrower and their respective
Subsidiaries with the provisions of this Agreement referred to therein
(including, without limitation, Section 7.1) as of the last day of the
fiscal quarter or fiscal year of the Borrower, as the case may be, and
(y) to the extent not previously disclosed to the Administrative Agent,
a listing of any county or state within the United States where any
Loan Party keeps inventory or equipment and of any Intellectual
Property acquired by any Loan Party since the date of the most recent
list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Effective Date);
(c) as soon as available, and in any event no later than 30 days
after the end of each fiscal year of Holdings, a detailed consolidated
budget for the following fiscal year for Holdings and its Subsidiaries
(including projected consolidated balance sheets of Holdings and its
Subsidiaries and supporting schedules showing the Borrower and its
consolidated Subsidiaries, and Holdings, each on a stand-alone basis as
of the end of the following fiscal year and the related consolidated
statements of projected cash flow, projected changes in financial
position and projected income for Holdings and its Subsidiaries and
supporting schedules showing the Borrower and its consolidated
Subsidiaries, and Holdings, each on a stand-alone basis) and, as soon
as available,
65
significant revisions, if any, of such budget and projections with
respect to such fiscal year which are delivered to the Board of
Managers of Holdings for its review (collectively, the `Projections'),
which Projections shall in each case be accompanied by a certificate of
a Responsible Officer stating that such Projections are based on
reasonable estimates, information and assumptions at the time made in
light of the circumstances then existing and that such Responsible
Officer has no reason to believe that such Projections are incorrect or
misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower during any period in which the Borrower is not required to
file periodic reports on Forms 10-K and 10-Q with the Securities and
Exchange Commission, a narrative discussion and analysis of the
financial condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, as compared to the portion of the Projections covering such
periods and to the comparable periods of the previous year when
comparisons are required under Section 6.1;
(e) no later than 10 Business Days prior to the proposed
effectiveness thereof, copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with
respect to the Senior Subordinated Note Indenture, the Seller
Securities or the Recapitalization Documents which is prohibited by
Section 7.9 or 7.16 (and the effectiveness of any such proposed
amendment, supplement, waiver or other modification shall be
conditioned upon the receipt of any necessary consent thereto required
under this Agreement);
(f) within five days after the same are sent, copies of all
financial statements and reports (including reports on Form 10-K, 10-Q
and 8-K) which Holdings or the Borrower sends generally to the holders
of any class of its debt securities or public equity securities and,
promptly after the same are filed, copies of all financial statements
and reports which Holdings or the Borrower may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(g) promptly upon receipt thereof, copies of any management or
other similar letters received from the accountants performing the
audit of the financial statements pursuant to Section 6.1(a); and
(h) promptly, such additional financial and other information
concerning Holdings, the Borrower or any of their respective
Subsidiaries as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its material obligations of whatever nature, except where (a) the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of Holdings, the Borrower or their respective
Subsidiaries, as the case may be, or (b) the failure to so pay, discharge or
otherwise satisfy any
66
such obligations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its existence and (ii) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations (other than in respect of Indebtedness) and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all material
tangible Property useful and necessary in its business in good working order and
condition, ordinary wear and tear and damage occurring as a result of a casualty
event excepted, and (b) maintain with financially sound and reputable insurance
companies insurance on all its Property in at least such amounts and against at
least such risks (but including in any event public liability, product liability
and business interruption) as are usually insured against in the same general
area by companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender, at its own expense, to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Holdings, the Borrower and their respective Subsidiaries with officers and
employees of Holdings, the Borrower and their respective Subsidiaries and, in
the presence of a Responsible Officer, with its independent certified public
accountants, provided that all such visits and inspections shall be coordinated
through the Administrative Agent.
6.7 Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, investigation or proceeding which may exist
at any time affecting Holdings, the Borrower or any of their respective
Subsidiaries, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof
unless any such event could not, individually or together with all such
other events, result in any liability to the Borrower or any Commonly
Controlled Entity which could reasonably be expected to have a Material
Adverse Effect: (i) the occurrence of any Reportable Event with respect
to any
67
Plan, a failure to make any required contribution to a Plan, the creation
of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(d) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and ensure compliance in all
material respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply with and maintain, and ensure that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except for such failures to comply which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws, except for, in each
case, such failures which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
6.9 Interest Rate Protection. In the case of the Borrower, within 270
days after the Effective Date, enter into Hedge Agreements to the extent
necessary to provide that a notional amount of 33 1/3% of the aggregate
principal amount of the Term Loans is subject to interest rate protection for a
period of not less than three years, which Hedge Agreements shall have terms and
conditions reasonably satisfactory to the Agents.
6.10 Additional Collateral, etc. (a) With respect to any Property
acquired after the Effective Date by Holdings, the Borrower or any other
Guarantor (other than (x) any Property described in paragraph (b), (c) or (d)
below and (y) any Property subject to a Lien expressly permitted by Section
7.3(g), 7.3(k), 7.3(n), 7.3(p), 7.3(q), 7.3(r), 7.3(v) or 7.3(w) to the extent
the terms of the agreements with respect to such Liens prohibit the granting of
a Lien for the benefit of the Secured Parties on such Property) as to which the
Administrative Agent, for the benefit of the Secured Parties, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in such Property (subject to Liens
permitted under Section 7.3 (except Section 7.3(j)), including without
limitation, the
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filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Effective Date by Holdings, the Borrower or any other Guarantor (other than
any such real property subject to a Lien expressly permitted by Section 7.3(g)
or 7.3(k)), promptly (i) execute and deliver a first priority Mortgage in favor
of the Administrative Agent, for the benefit of the Secured Parties, covering
such real property (subject to Liens permitted under Section 7.3 (except Section
7.3(j))), (ii) if requested by the Administrative Agent, provide the Lenders
with (x) title and extended coverage insurance covering such real property in an
amount at least equal to the purchase price of such real estate (or such other
amount as shall be reasonably specified by the Administrative Agent) as well as
a current ALTA survey thereof, together with a surveyor's certificate, and (y)
any consents or estoppels reasonably deemed necessary by the Administrative
Agent in connection with such mortgage or deed of trust, each of the foregoing
in form and substance reasonably satisfactory to the Administrative Agent, and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Subsidiary) created or acquired after the Effective Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that ceases to
be an Excluded Subsidiary), by Holdings, the Borrower or any of their respective
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Capital Stock of such new Subsidiary which is owned by Holdings, the
Borrower or any of their respective Domestic Subsidiaries (subject to Liens
permitted under Section 7.3 (except Section 7.3(j))), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of Holdings, the Borrower or such Subsidiary, as the case may be, (iii)
cause such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary (subject to Liens
permitted under Section 7.3 (except Section 7.3(j))), including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Subsidiary created or acquired
after the Effective Date by Holdings, the Borrower or any of their respective
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and
69
Collateral Agreement as the Administrative Agent deems necessary or advisable in
order to grant to the Administrative Agent, for the benefit of the Secured
Parties, a perfected first priority security interest in the Capital Stock of
such new Subsidiary which is owned by Holdings, the Borrower or any of their
respective Subsidiaries (provided that in no event shall more than 65% of the
total outstanding Capital Stock of any such new Foreign Subsidiary be required
to be so pledged), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of Holdings, the Borrower or
such Subsidiary, as the case may be, and take such other action as may be
necessary in the opinion of the Administrative Agent, to perfect the Lien of the
Administrative Agent thereon, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
6.11 Further Assurances. In the case of the Borrower, from time to
time execute and deliver, or cause to be executed and delivered, such additional
instruments, certificates or documents, and take all such actions, as the
Administrative Agent may reasonably request, for the purposes of implementing or
effectuating the provisions of this Agreement and the other Loan Documents, or
of more fully perfecting or renewing the rights of the Administrative Agent and
the Secured Parties with respect to the Collateral (or with respect to any
additions thereto or replacements or proceeds thereof or with respect to any
other property or assets hereafter acquired by the Borrower which may be deemed
to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by
the Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent or such Lender may be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
6.12 Post-Closing Intellectual Property. Within 30 days after the
Effective Date, execute and deliver short-form agreements in form and substance
satisfactory to the Administrative Agent as may be reasonably requested by the
Administrative Agent to be filed in the United States Patent and Trademark
Office and the United States Copyright Office with respect to the intellectual
property listed on Schedule 6 to the Guarantee and Collateral Agreement.
SECTION 7. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit (which has not
been cash collateralized in the manner described in the final paragraph of
Section 8) remains outstanding or any Loan or other amount (including, without
limitation, accrued interest and fees) is owing to any Lender or any Agent
hereunder, each of Holdings and the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
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(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Period Leverage Ratio
------------- --------------
September 30, 2002 6.00 to 1.00
December 31, 2002 6.00 to 1.00
March 31, 2003 6.00 to 1.00
June 30, 2003 6.00 to 1.00
September 30, 2003 6.00 to 1.00
December 31, 2003 5.50 to 1.00
March 31, 2004 5.50 to 1.00
June 30, 2004 5.50 to 1.00
September 30, 2004 5.50 to 1.00
December 31, 2004 4.75 to 1.00
March 31, 2005 4.75 to 1.00
June 30, 2005 4.75 to 1.00
September 30, 2005 4.75 to 1.00
December 31, 2005 4.00 to 1.00
March 31, 2006 4.00 to 1.00
June 30, 2006 4.00 to 1.00
September 30, 2006 4.00 to 1.00
December 31, 2006 and each Fiscal Quarter 3.50 to 1.00
thereafter
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Period Interest Coverage Ratio
------------- -----------------------
September 30, 2002 2.00 to 1.00
December 31, 2002 2.00 to 1.00
March 31, 2003 2.00 to 1.00
June 30, 2003 2.00 to 1.00
September 30, 2003 2.00 to 1.00
December 31, 2003 2.00 to 1.00
March 31, 2004 2.00 to 1.00
June 30, 2004 2.00 to 1.00
September 30, 2004 2.00 to 1.00
December 31, 2004 2.15 to 1.00
March 31, 2005 2.15 to 1.00
June 30, 2005 2.15 to 1.00
71
Consolidated
Fiscal Period Interest Coverage Ratio
------------- -----------------------
September 30, 2005 2.15 to 1.00
December 31, 2005 2.50 to 1.00
March 31, 2006 2.50 to 1.00
June 30, 2006 2.50 to 1.00
September 30, 2006 2.50 to 1.00
December 31, 2006 and each Fiscal Quarter 3.00 to 1.00
thereafter
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document
(including Indebtedness in respect of Loans and Letters of Credit);
(b) Indebtedness of the Borrower to any Subsidiary and, subject to
Section 7.8(i) in the case of Indebtedness of a Subsidiary that is not a
Subsidiary Guarantor, of any Subsidiary to the Borrower or any other
Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $7,500,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d);
(e) subject to Section 7.8(i) in the case of Guarantee Obligations
in respect of obligations of Subsidiaries that are not Subsidiary
Guarantors, Guarantee Obligations made in the ordinary course of business
by the Borrower or any of its Subsidiaries of obligations (other than
Indebtedness) of the Borrower or any Subsidiary;
(f) (i) Indebtedness of the Borrower and Alliance Laundry
Corporation in respect of (A) the Senior Subordinated Notes in an aggregate
principal amount not to exceed $110,000,000 or (B) any other senior
subordinated notes issued to refinance the Senior Subordinated Notes having
substantially the same terms and conditions as the Senior Subordinated
Notes (except that the final maturity thereof shall be longer than the
final maturity of the Senior Subordinated Notes) and in an aggregate
principal amount not to exceed $110,000,000 and (ii) Guarantee Obligations
of Holdings or any Subsidiary Guarantor in respect of such Indebtedness;
provided that any Indebtedness permitted under clause (i)(B) and any such
Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower and Alliance Laundry Corporation in respect of
the Senior Subordinated Notes;
(g) Indebtedness of Holdings in respect of the Subordinated Seller
Notes (or any subordinated notes issued to refinance the Subordinated
Seller Notes having substantially the same terms and conditions as the
Subordinated Seller Notes (except that the final maturity thereof shall be
longer than the final maturity of the Subordinated
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Seller Notes)) in an initial principal amount not to exceed $9,000,000 plus
the amount of interest on such Subordinated Seller Notes paid in-kind or
through accretion or capitalization;
(h) Indebtedness of the Borrower or any of its Subsidiaries arising
out of any Sale/Leaseback Transaction permitted under Section 7.11 in an
aggregate amount not to exceed $2,500,000;
(i) (i) Indebtedness of a Person which becomes a Subsidiary after the
Effective Date pursuant to an Acquisition or Subsidiary Acquisition
permitted under Section 7.8(i), (ii) Indebtedness secured by Liens
permitted under Section 7.3(k) and (iii) Indebtedness of a Person assumed
by the Borrower or any Subsidiary Guarantor pursuant to a merger of such
Person with and into the Borrower or such Subsidiary Guarantor pursuant to
an Acquisition or Subsidiary Acquisition permitted under Section 7.8(i),
provided that, (A) such Indebtedness was not incurred or created in
connection with or in anticipation of the relevant Acquisition or
Subsidiary Acquisition and (B) no Default or Event of Default would result
therefrom;
(j) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is extinguished within two Business Days of notice to the
Borrower or the relevant Subsidiary of its incurrence;
(k) Indebtedness of Holdings in respect of Management Notes;
(l) Indebtedness in respect of performance bonds, bid bonds, appeal
bonds, surety bonds, completion guarantees or other similar obligations
arising in the ordinary course of business, provided that no such bond or
similar obligation is provided to secure the repayment of other
Indebtedness;
(m) Indebtedness arising out of purchase price adjustments and
customary indemnifications by the Borrower or any of its Subsidiaries in
connection with the Recapitalization or any Acquisition or Subsidiary
Acquisition permitted under Section 7.8;
(n) Indebtedness of the Borrower or any of its Subsidiaries in respect
of industrial revenue bonds issued to finance the expansion of any facility
of the Borrower or its Subsidiaries, provided that the aggregate principal
amount of such Indebtedness does not exceed $10,000,000;
(o) (i) Indebtedness of any Foreign Subsidiary incurred to finance the
working capital requirements of such Foreign Subsidiary in an amount not to
exceed the sum of 90% of such Foreign Subsidiary's Accounts Receivable and
60% of such Foreign Subsidiary's inventory and (ii) other Indebtedness of
Foreign Subsidiaries not to exceed $2,500,000 in the aggregate at any one
time outstanding;
(p) additional Indebtedness not otherwise permitted under this Section
7.2 provided that the aggregate outstanding principal amount of such
Indebtedness does not
73
exceed $10,000,000 prior to the completion of the Ripon Transition and
$20,000,000 at any time thereafter;
(q) Indebtedness of Holdings in respect of any Restricted
Payment made to it and permitted pursuant to Section 7.6 to the extent
such Restricted Payment is recharacterized as a loan instead of a
distribution;
(r) Indebtedness incurred since the Effective Date by the
Borrower or any Subsidiary Guarantor to finance any Acquisition or
Subsidiary Acquisition permitted under Section 7.8(i) in an aggregate
principal amount not to exceed the excess of (x) $35,000,000 over (y)
the aggregate amount of all Indebtedness assumed by the Borrower and
the Subsidiary Guarantors (including any Acquired Persons) in
connection with all such Acquisitions and Subsidiary Acquisitions
consummated in reliance upon clause (i)(A)(x) of the proviso to such
Section, provided that, (i) if any Consolidated Senior Debt is incurred
in connection with any such Acquisition, after giving effect to such
Indebtedness and the related Acquisitions or Subsidiary Acquisitions on
a pro forma basis as if such Indebtedness had been incurred and such
Acquisitions or Subsidiary Acquisitions had occurred on the first day
of the most recent period of four consecutive quarters of the Borrower,
the Consolidated Senior Debt Leverage Ratio on the last day of such
period would not have been greater than 3.75 to 1.0 and the Borrower
would have been in compliance with the covenants set forth in Section
7.1 on such date and (ii) after giving effect to such Indebtedness and
the related Acquisitions or Subsidiary Acquisitions, no Default or
Event of Default shall have occurred and be continuing;
(s) (i) Indebtedness of the Borrower or any Subsidiary Guarantor
consisting of Guarantee Obligations in respect of any Indebtedness of
the Borrower or any Subsidiary Guarantor incurred pursuant to
paragraphs (c), (h), (i), (l), (m), (n), (p), (s) or (t) of this
Section, (ii) Indebtedness of any Subsidiary (other than a Subsidiary
Guarantor) consisting of Guarantee Obligations of any Indebtedness of
the Borrower or any other Subsidiary of any of the Borrower or any
other Subsidiary and (iii) subject to Section 7.8(i), any Indebtedness
of the Borrower or Subsidiary Guarantor consisting of Guarantee
Obligations in respect of Indebtedness of any Subsidiary (other than a
Subsidiary Guarantor);
(t) Indebtedness incurred in connection with the financing of
insurance premiums in the ordinary course of business;
(u) In connection with Permitted Receivables Financings, Limited
Originator Recourse; and
(v) subject to Section 7.3(f), any renewals, extensions,
refundings or refinancings of any Indebtedness permitted under
paragraphs (c), (d), (j) and (o) of this Section, provided that the
principal amount of such Indebtedness is not increased pursuant to any
such renewal, extension, refunding or refinancing;
provided, however, that no Indebtedness of Holdings, the Borrower or any of
their respective Subsidiaries (other than Indebtedness under this Agreement)
shall be designated as "Designated
74
Senior Debt" or shall be "Senior Credit Facilities" under and as defined in the
Senior Subordinated Note Indenture without the prior written consent of the
Agents and the Required Lenders.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes, assessments or governmental charges or
levies not yet delinquent or which are being contested in good faith by
appropriate proceedings; provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlords' or other like Liens arising in the ordinary
course of business, and Liens imposed by law, in each case which are
not overdue for a period of more than 30 days or which are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions, minor defects or
irregularities of title and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(f) (i) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d) and (ii)
Liens securing Indebtedness permitted under Section 7.2(r), provided
that no such Lien is spread to cover any additional Property after the
Effective Date and that the amount of Indebtedness secured thereby is
not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the
acquisition, repair or improvement of fixed or capital assets
(including any interest or title of a lessor under any Capital Lease
Obligation) and real property; provided that (i) such Liens shall be
created within 180 days after the acquisition of such fixed or capital
assets or real property, as the case may be, (ii) such Liens do not at
any time encumber any Property other than the Property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is
not increased;
(h) Liens created pursuant to this Agreement and the Security
Documents;
75
(i) Liens arising from judgments or decrees which do not result
in an Event of Default under Section 8(h);
(j) Liens securing Indebtedness of Foreign Subsidiaries
permitted to be incurred pursuant to Section 7.2(o), so long as any
such Lien attaches only to the assets of the respective Foreign
Subsidiary that has incurred such Indebtedness;
(k) Liens on any assets of a Person which becomes a Subsidiary
after the date hereof pursuant to an Acquisition or Subsidiary
Acquisition permitted under Section 7.8(i) and Liens on fixed assets
otherwise acquired pursuant to any such Acquisition or Subsidiary
Acquisition, provided that (i) such Liens existed at the time such
Person became a Subsidiary or such assets were acquired, as the case
may be, and were not created in anticipation of the acquisition, (ii)
any such Lien does not by its terms cover any property or assets after
the time such Person becomes a Subsidiary or such assets were acquired,
as the case may be, which were not covered immediately prior thereto
and (iii) any such Lien does not by its terms secure any Indebtedness
other than Indebtedness existing immediately prior to the time such
Person becomes a Subsidiary or such assets are acquired, as the case
may be;
(l) all building codes and zoning ordinances and other laws,
ordinances, regulations, rules, orders or determinations of any
federal, state, county, municipal or other governmental authority now
or hereafter enacted;
(m) Liens on the Property financed with the proceeds of the
Indebtedness permitted by Section 7.2(n) to secure such Indebtedness;
(n) Liens securing reimbursement of obligations in respect of
(i) documentary letters of credit, provided that such Liens cover only
the documents, the goods covered thereby and the proceeds thereof and
(ii) bankers' acceptances created in respect of drawings under such
letters of credit, provided that such Liens cover only the specific
goods financed under such letter of credit and the proceeds thereof;
(o) Liens consisting of rights of set-off of a customary nature
or bankers' liens on amounts on deposit, whether arising by contract or
operation of law, incurred in the ordinary course of business;
(p) Liens encumbering customary initial deposits in respect of
commodity trading accounts or other brokerage accounts incurred in the
ordinary course of business;
(q) Liens solely on any cash earnest money deposits made by the
Borrower or any of the Subsidiary Guarantors in connection with any
letter of intent or purchase agreement entered into by it in connection
with an Acquisition or Subsidiary Acquisition permitted under Section
7.8(i);
(r) Liens on assets sold pursuant to Sale/Leaseback Transactions
permitted under Section 7.11;
76
(s) Liens not otherwise permitted by this Section 7.3 so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined, in the case of each such Lien, as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Borrower and
all Subsidiaries) $2,500,000 at any one time;
(t) Liens on goods in favor of customs and revenue authorities
which secure payment of customs duties in connection with the
importation of such goods;
(u) Liens securing obligations (other than Indebtedness) under
operating, reciprocal easements or similar agreements entered into in
the ordinary course of business by the Borrower and its Subsidiaries
which do not materially interfere with the ordinary conduct of the
business of the Borrower and its Subsidiaries;
(v) Liens consisting of any right of set-off granted to any
financial institution acting as a lockbox bank in connection with a
Permitted Receivables Financing;
(w) Liens on insurance policies and the proceeds thereof
securing the financing of premiums with respect thereto; and
(x) Liens filed for the purpose of perfecting the ownership
interests of a purchaser of Receivables, equipment loans and related
assets pursuant to any Permitted Receivables Financing.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Subsidiary
(provided that, if any Subsidiary party to such merger or consolidation
is a Subsidiary Guarantor, the surviving entity shall also be a
Subsidiary Guarantor);
(b) (i) the Borrower may Dispose of any or all of its assets
(including the Capital Stock of any Subsidiary) to any Subsidiary
Guarantor which, after giving effect to such Disposition, is and
remains a Material Subsidiary or, subject to Section 7.8(i), any other
Subsidiary and (ii) any Subsidiary may Dispose of any or all of its
assets (including Capital Stock of any other Subsidiary) (upon
voluntary liquidation, dissolution or otherwise) to the Borrower or any
other Subsidiary, provided that if any such Subsidiary Disposing of any
or all of its assets to a Subsidiary is a Subsidiary Guarantor, the
Subsidiary to which such assets are sold or transferred must also be a
Subsidiary Guarantor;
(c) the Borrower or any Subsidiary may merge with or consolidate
with any Person in connection with any Acquisition or Subsidiary
Acquisition permitted hereunder, provided that (i) (A) if the Borrower
is a party thereto, the Borrower is the surviving entity of such merger
or consolidation and (B) if a Subsidiary Guarantor is a
77
party thereto, the surviving entity of such merger or consolidation is
a Subsidiary Guarantor and (ii) no Default or Event of Default shall
have occurred and be continuing or would result therefrom; and
(d) Dispositions permitted under Section 7.5.
7.5 Limitation on Disposition of Property. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete, worn out or surplus property in
the ordinary course of business;
(b) the sale or lease of inventory or equipment in the ordinary
course of business;
(c) the sale or discount, in each case without recourse, of
Accounts Receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof to the
extent not transferred in connection with any Permitted Receivables
Financing;
(d) the sale or exchange of specific items of equipment for
replacement items of equipment in the ordinary course of business which
are the functional equivalent of the item of equipment so exchanged;
(e) Dispositions permitted by Section 7.4(a) or (b);
(f) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or of the Borrower to Holdings or (i) in the case of a
Wholly Owned Subsidiary, to the Subsidiary which owns the remainder of
such Subsidiary's Capital Stock and (ii) in the case of a Subsidiary
that is not a Wholly Owned Subsidiary, pro rata to the holders of the
Capital Stock of such Subsidiary;
(g) the Disposition of other assets having a fair market value
not to exceed $500,000 in the aggregate for any fiscal year of the
Borrower;
(h) any Disposition or Recovery Event, provided, that (i) the
requirements of Section 2.12(b) are complied with in connection
therewith and (ii) the aggregate amount of all such Dispositions in any
fiscal year of the Borrower shall not exceed $5,000,000;
(i) Dispositions of assets sold pursuant to a Sale/Leaseback
Transaction permitted under Section 7.11;
(j) Dispositions of non-core assets acquired pursuant to
Acquisitions or Subsidiary Acquisitions permitted under Section 7.8(i);
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(k) Dispositions of all or any portion of the Capital Stock or
assets of any Foreign Subsidiary;
(l) Dispositions (i) in connection with the Ripon Transition and
(ii) of the Capital Stock of, or all or any portion of the assets of,
ALSA;
(m) sales and transfers of Receivables, equipment loans and
related assets (including contract rights) by the Borrower and its
Subsidiaries (including the Securitization Entities) in connection with
any Permitted Receivables Financing pursuant to the applicable
Securitization Documentation, provided, that (i) the principal amount
of cash and the purchase money notes received as consideration in any
such sale or transfer (when aggregated with the cash and purchase money
notes received as consideration upon all such other sales of
Receivables, equipment loans and related assets during the ninety days
preceding such sale or transfer) is at least equal to 75% of the
aggregate face amount of all Receivables so sold or transferred on such
day and during the ninety preceding days, (ii) the Borrower and its
Subsidiaries may only receive such purchase money notes to the extent
such purchase money notes are issuable pursuant to either (x) the
Securitization Documentation for the Initial Receivables Facility in
effect on the Effective Date or (y) the Securitization Documentation
for the Permitted Receivables Financing replacing such Initial
Receivables Facility so long as the terms and conditions of purchase
money notes issuable pursuant to such replacement receivables facility
are not materially more disadvantageous to the Agents and the Lenders
than the terms and conditions of the purchase money notes issued
pursuant to the Initial Receivables Facility in effect on the Effective
Date or are otherwise reasonably satisfactory to the Agents and (iii)
in the event that an "Event of Default" occurs in respect of the
Borrower under Section 8(k) of the Loan and Security Agreement, dated
as of May 5, 1998, among Alliance Laundry Receivables Warehouse LLC,
the financial institutions party thereto as lenders, and Lehman
Commercial Paper Inc., as agent for such lenders, or any successor or
similar provision in any other Securitization Documentation with
respect to any Permitted Receivables Financing, the consideration for
any such sale or transfer during the continuation of any such Event of
Default shall include cash at least equal to 75% of the face amount of
any Receivable sold pursuant to any such sale or transfer unless
otherwise approved by the Administrative Agent;
(n) Restricted Payments permitted under Section 7.6;
(o) leases and licenses of real or personal property (including
Intellectual Property) in the ordinary course of business;
(p) Dispositions of all or any portion of the Capital Stock or
assets of any Subsidiary (other than a Material Subsidiary);
(q) sales of equipment loans on a non-recourse basis to a third
parties in an amount equal to at least 75% of the fair market value
thereof;
(r) the sale of Accounts Receivable pursuant to arrangements
customary to the industry; and
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(s) Dispositions of (i) Cash Equivalents and (ii) Investments
(other than Acquisitions);
provided, however, that to the extent that any of the foregoing constitute an
Asset Sale, at least 75% of the consideration received in connection with such
Asset Sale shall consist of cash, Cash Equivalents, Capital Stock of a
Subsidiary or fixed assets used or useful in the business of the Borrower and
its Subsidiaries.
7.6 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in similar Capital Stock of the
Person making such dividend or by increasing the liquidation preference of any
such Capital Stock) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of Holdings (including,
without limitation, the Seller Preferred Membership Interests), the Borrower or
any Subsidiary, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Holdings, the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the holders of
its Capital Stock ratably in accordance with their respective ownership
interests;
(b) so long as no Default or Event of Default shall have occurred
and be continuing, the Borrower may pay dividends or distributions to
Holdings to permit Holdings to (i) (A) purchase Holdings' Capital Stock
or options to purchase Capital Stock from present or former officers or
employees of Holdings, the Borrower or any of their respective
Subsidiaries upon the death, disability or termination of employment of
such officer or employee or (B) make payments on promissory notes
("Management Notes") issued by Holdings to any such officers or
employees of Holdings, the Borrower or any of their respective
Subsidiaries to finance the purchase of Capital Stock or options to
purchase Capital Stock upon the death, disability or termination of
employment of any such officer or employee, provided, that the
aggregate amount of payments (not including the forgiveness of any
Indebtedness described in Section 7.8(p)) under this clause (i)
subsequent to the date hereof (net of any proceeds received by Holdings
subsequent to the date hereof in connection with resales of any Capital
Stock or options to purchase Capital Stock so purchased) shall not
exceed $5,000,000 in the aggregate subsequent to the Effective Date;
provided, that Holdings shall also be permitted to make such purchases
with the Net Cash Proceeds to Holdings or the Borrower from any
"key-man" life insurance policies received after the Original Closing
Date, (ii) pay fees, expenses and other amounts to the Sponsor and its
Control Investment Affiliates expressly permitted by Section 7.10 and
(iii) to pay directors' fees and expenses and indemnity obligations;
(c) the Borrower may pay dividends or distributions to Holdings
to permit Holdings to (i) pay corporate overhead expenses incurred in
the ordinary course of business not to exceed $1,500,000 in any fiscal
year and (ii) pay any taxes which are due and payable by Holdings and
the Borrower as part of a consolidated group;
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(d) cash distributions by the Borrower to Holdings and by
Holdings to the holders of its Capital Stock to enable such holders to
make tax payments resulting from the net income of the Borrower and its
Subsidiaries in any fiscal year (including the tax distributions
contemplated by Article IV of the limited liability company agreement
of the Borrower as in effect on the date hereof) shall be permitted,
provided that prior to the making of each such distribution, the
Borrower shall have delivered to the Administrative Agent a certificate
of a Responsible Officer of the Borrower setting forth in reasonable
detail the highest federal, state and local tax rates applicable to
such holders (after giving effect to deductions for such state and
local taxes applicable thereto);
(e) dividends or distributions paid by the Borrower to Holdings
in an amount necessary to pay indemnity claims or any purchase price
adjustment required to be paid by Holdings pursuant to the Merger
Agreement (as in effect on the date hereof), and payments of such
claims or adjustments with the proceeds of such dividends or
distributions by Holdings to Raytheon;
(f) cash distributions by the Borrower to Holdings, to enable
Holdings to make payments under the Transition Services Agreement,
dated as of May 5, 1998, between Raytheon and Holdings (as in effect on
the date hereof) in connection with the Recapitalization; and
(g) repurchases of Capital Stock deemed to occur as a result of
the surrender of such Capital Stock for cancellation in connection with
the exercise of stock options shall be permitted.
7.7 Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business in any fiscal year of the
Borrower not exceeding the amount set forth below opposite such fiscal year:
Fiscal Year Amount
----------- ------
2002 $ 8,500,000
2003 $ 9,000,000
2004 $10,000,000
2005 $12,000,000
2006 $12,000,000
2007 $12,000,000
; provided, that (i) up to 50% of any such amount referred to above (without
giving effect to any additional Capital Expenditures permitted during such
fiscal year pursuant to clause (ii) below), if not so expended in the fiscal
year for which it is permitted (as to such fiscal year, the "CapEx Carryforward
Amount"), may be carried over for expenditure in the next succeeding fiscal
year, (ii) Capital Expenditures made pursuant to this clause (a) during any
fiscal year shall be deemed made, first, in respect of amounts permitted for
such fiscal year as provided above and, second, in respect of amounts carried
over from the prior fiscal year pursuant to subclause (i) above, (b) Capital
Expenditures made with the proceeds of any Reinvestment Deferred Amount,
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(c) Capital Expenditures in any fiscal year made with the then unused Permitted
Expenditure Amounts and (d) Capital Expenditures attributable to all or a
portion of the cost of Acquisitions and Subsidiary Acquisitions permitted under
Section 7.8.
7.8 Limitation on Investments. Make any advance, loan, extension
of credit (by way of guaranty or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other debt securities
of, or any assets constituting an ongoing business from, or make any other
investment in, any other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business, including Accounts Receivable;
(b) investments in cash and Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b) and (e);
(d) loans and advances to employees of Holdings, the Borrower or
any Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount for Holdings, the Borrower
and Subsidiaries of the Borrower not to exceed $500,000 at any one time
outstanding;
(e) Investments by Holdings in the Borrower and the Subsidiary
Guarantors;
(f) Investments existing on the date hereof and listed on
Schedule 7.8;
(g) Investments in assets useful in the Borrower's or its
Subsidiaries' business (including through Acquisitions or Subsidiary
Acquisitions) made by the Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
(h) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.8(c)) by Holdings, the Borrower or
any of its Subsidiaries in the Borrower or any Person that, prior to
such investment, is a Subsidiary Guarantor;
(i) Acquisitions and other Investments by the Borrower and the
Subsidiary Guarantors (other than Alliance Laundry Corporation)
(including, without limitation, Investments by the Borrower and the
Subsidiary Guarantors in Subsidiaries that are not Subsidiary
Guarantors), provided that (i) (A) the aggregate consideration
(including assumed Indebtedness, but excluding consideration in the
form of Capital Stock of Holdings) for all such Acquisitions after the
Effective Date shall not exceed the sum of (x) $30,000,000 and (y) the
then unused Permitted Expenditure Amount at such time, (B) if any
Consolidated Senior Debt is incurred in connection with any such
Acquisition (1) after giving effect to such Acquisition on a pro forma
basis as if such Acquisition has occurred on the first day of the most
recent period of four consecutive fiscal quarters, the Consolidated
Senior Debt Leverage Ratio on the last day of such period would not
have been greater than 3.75 to 1.0 and (2) the Borrower shall have
obtained the prior written consent of the Agents and the Required
Lenders to the extent required pursuant to the
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proviso at the end of Section 7.2, (C) prior to the consummation of any
such Acquisition, the Administrative Agent shall have received a
certificate of a Responsible Officer setting forth the calculations
required to determine compliance with clauses (A) and (B) above and
certifying that the conditions set forth in this Section 7.8(i) have
been satisfied and (D) no Default or Event of Default shall have then
occurred and be continuing or would result therefrom and (ii) after
giving effect to any such Investment (other than an Acquisition), the
aggregate outstanding or unreturned amount (including the aggregate
consideration (including assumed Indebtedness) for all Subsidiary
Acquisitions, but excluding any consideration in the form of Capital
Stock of Holdings) of all such Investments (other than Acquisitions)
(including Investments in the nature of sales and transfers of assets
for less than fair market value and Guarantee Obligations permitted by
Section 7.2(e) or 7.2(s)) made subsequent to the Effective Date shall
not exceed the sum of (A) $5,000,000, (B) an amount equal to the excess
of (x) the Designated Equity Amounts as of the date of such Investment
over (y) the then unused Permitted Expenditure Amounts based upon such
Designated Equity Amounts, (C) the Net Cash Proceeds from any
Disposition pursuant to Section 7.5(l) (other than any Net Cash
Proceeds applied to prepay Loans) and (D) any other cash received on
any such Investments, provided, further, that the conversion of any
Indebtedness owed to the Borrower or any Subsidiary by any Subsidiary
that is not a Subsidiary Guarantor into equity of such Subsidiary shall
not constitute an additional Investment in such Subsidiary by the
Borrower or such Subsidiary for purposes of clause (ii) of the
limitation contained in the immediately preceding proviso;
(j) Investments received in connection with the collection of
Accounts Receivable in the ordinary course of business and 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;
(k) Investments received in connection with any Asset Sale or
other Disposition permitted hereunder;
(l) loans and advances (including in respect of Notes Receivable)
to suppliers and customers or users of the Borrower or any Subsidiary's
products or customers of distributors of such products in the ordinary
course of business consistent with past practice;
(m) Investments resulting from the contribution or transfer of
the Capital Stock or assets of ALSA to a joint venture entered into by
the Borrower after the Effective Date;
(n) Investments by the Borrower or any of its Subsidiaries
arising out of sales and transfers of Receivables, equipment loans and
related assets pursuant to Section 7.5(m);
(o) loans and advances to members of management of Holdings in an
aggregate amount not to exceed $2,000,000 plus payment-in-kind interest
at any time
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outstanding in connection with the acquisition of Capital Stock of Holdings
by such members of management on the Closing Date pursuant to the
Recapitalization;
(p) Investments in ALSA not to exceed $1,000,000 in the aggregate;
(q) Investments in respect of the purchase money notes described in
Section 7.5(m);
(r) Investments (i) arising out of any repurchase pursuant to Section
7.9 of Senior Subordinated Notes or other Indebtedness permitted under
Section 7.2(f) or (ii) any repurchase of Indebtedness in connection with
the refinancing thereof to the extent permitted under Section 7.2;
(s) Investments by Subsidiaries which are not Subsidiary Guarantors
in the Borrower or any other Subsidiary; and
(t) Investments arising out of the Limited Originator Recourse.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, the Senior Subordinated Notes (or any other Indebtedness permitted
under Section 7.2(f)) or the Subordinated Seller Notes (or any other
Indebtedness permitted under Section 7.2(g)) (except for the exchange of the
9 5/8% Senior Subordinated Note Due 2008 for senior subordinated notes having
substantially the same terms and conditions contemplated under the Senior
Subordinated Note Indenture or for the refinancing of the Senior Subordinated
Notes and Subordinated Seller Notes in accordance with Section 7.2(f) or 7.2(g),
as the case may be), provided that, so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom the Borrower may
repurchase or redeem Senior Subordinated Notes in an aggregate principal amount
not to exceed an amount equal to the excess of (x) 50% of the aggregate
Prepayment Amounts declined by the Term Loan Lenders pursuant to Section 2.18(d)
as of the date of such repurchase or redemption over (y) the then unused
Permitted Expenditure Amounts based upon such Prepayment Amounts, (b) amend,
modify or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Senior Subordinated Notes (or
any other Indebtedness permitted under Section 7.2(f)) or the Subordinated
Seller Notes (or any other Indebtedness permitted under Section 7.2(g)) (other
than any such amendment, modification, waiver or other change which (i) (A)
would extend the maturity or reduce the amount of any payment of principal
thereof, reduce the rate or extend the date for payment of interest thereon or
relax any covenant or other restriction applicable to the Borrower or any of its
Subsidiaries and (B) does not involve the payment of a consent fee or (ii) is
not adverse in any respect to the interests of the Lenders in the reasonable
opinion of the Administrative Agent), (c) designate any Indebtedness (other than
the Obligations) as "Designated Senior Indebtedness" or "Senior Credit
Facilities" for the purposes of the Senior Subordinated Note Indenture, (d)
amend its certificate of incorporation in any manner determined by the
Administrative Agent to be adverse to the Lenders or (e) make, offer to make or
(after giving effect to any applicable subordination provisions) become
obligated to make any repurchase of any Seller Securities upon any "change of
control" (as such term is defined in the Seller Securities).
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7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of Holdings, the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to Holdings, the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate or Holdings, the
Borrower or such Subsidiary. Notwithstanding the foregoing, the following
transactions shall be permitted: (i) the Borrower and its Subsidiaries may pay
management, advisory or similar fees and expenses to the Sponsor and its Control
Investment Affiliates in an aggregate amount not to exceed $1,000,000 in any
fiscal year of the Borrower (plus reasonable out-of-pocket expenses incurred by
Sponsor and its Affiliates in providing services to Holdings and the Borrower),
(ii) Holdings, the Borrower and their respective Subsidiaries may pay customary
fees to, and the reasonable out-of-pocket expenses of, its Board of Managers and
may provide customary indemnities for the benefit of members of its Board of
Managers, (iii) the payment by Holdings or the Borrower, in connection with any
Acquisition, divestiture or financing transaction that is consummated by
Holdings, the Borrower or any of their respective subsidiaries, of a transaction
fee and expenses to the Sponsor and its Affiliates pursuant to the Bain Advisory
Services Agreement (as in effect on the date hereof) for such transaction, (iv)
transactions with Subsidiaries that are not Subsidiary Guarantors, joint venture
partners or purchasers or sellers of goods or services, in each case in the
ordinary course of business (including, without limitation, pursuant to joint
venture agreements) and otherwise in compliance with the terms of the Loan
Documents which are fair to the Borrower or its Subsidiaries, in the good faith
determination of the Board of Managers of the Borrower or the senior management
thereof, or are on terms at least as favorable as might reasonably been obtained
at such time from an unaffiliated party, (v) any employment agreement entered
into by Holdings or any of its Subsidiaries or employee compensation payments in
the ordinary course of business and consistent with past practices of the
Borrower or such Subsidiary, (vi) Restricted Payments that are permitted by the
provisions of Section 7.6, (vii) payments or loans to employees or consultants
which are approved by the Board of Managers in good faith, (viii) in the case of
foreign joint ventures, transfers of equipment for sale outside of North America
in exchange for value not less than the Borrower's cost of producing such
equipment and (ix) transactions effected pursuant to a Permitted Receivables
Financing (including the servicing of Receivables sold thereunder by the
Borrower or any of its Subsidiaries).
7.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by Holdings, the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by Holdings, the Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of Holdings, the Borrower or
such Subsidiary (a "Sale/Leaseback Transaction"), except for Sale/Leaseback
Transactions by the Borrower and its Subsidiaries with an aggregate sales price
not to exceed $2,500,000 since the Effective Date.
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7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year
of the Borrower to end on a day other than December 31 or change the Borrower's
method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
Holdings, the Borrower or any of their respective Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues, whether
now owned or hereafter acquired, to secure the Obligations or, in the case of
any Guarantor, its obligations under the Guarantee and Collateral Agreement,
other than (a) this Agreement and the other Loan Documents, (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby), (c) any agreement relating to a
Disposition of Property by the Borrower or any of its Subsidiaries (in which
case, any prohibition or restriction shall only be effective against the
Property to be Disposed in such Disposition), (d) any agreement with respect to
Indebtedness of a Foreign Subsidiary permitted under Section 7.2(o) (in which
case, any prohibition or restriction shall only be effective against the
Property of such Foreign Subsidiary), (e) the Senior Subordinated Note Indenture
(or any agreement governing any other Indebtedness permitted under Section
7.2(f)), (f) any agreement which prohibits the creation of Liens to secure the
Senior Subordinated Notes (or any agreement governing any other Indebtedness
permitted under Section 7.2(f)) or the Subordinated Seller Note (or any
agreement governing any other Indebtedness permitted under Section 7.2(g)), (g)
the Securitization Documentation (in which case, any prohibition or restriction
shall only be effective against the Property of the relevant Securitization
Entities), (h) customary non-assignment provisions in leases entered into in the
ordinary course of business and (i) any agreements relating to Liens permitted
under Section 7.3(g), (k), (n), (p), (r), (v) or (w) (in which case, any
prohibition or restriction shall only be effective against the Property subject
to the relevant Lien).
7.14 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary, (b) make Investments in the
Borrower or any other Subsidiary or (c) transfer any of its assets to the
Borrower or any other Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement which has been entered into in connection with the Disposition
of all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) applicable law, (iv) the Senior Subordinated Note Indenture (or any other
agreement governing Indebtedness permitted under Section 7.2(f), (v) customary
provisions restricting the assignment of rights under contracts, (vi) the
Securitization Documentation (in which case, any prohibition or restriction
shall only be effective against the relevant Securitization Entities), (vii) any
agreement with respect to Indebtedness of a Foreign Subsidiary permitted under
Section 7.2(o) or Indebtedness of a Subsidiary permitted under Section 7.2(i)
(in which case, any prohibition or restriction shall only be effective against
such Subsidiary), (viii) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past practices, (ix)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in
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clause (c) above on the property so acquired, (x) any agreement for the sale of
a Subsidiary that restricts distributions by that Subsidiary pending its sale,
(xi) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements and other similar agreements entered into
in the ordinary course of business, (xii) restrictions on cash or other deposits
or net worth imposed by customers under contracts entered into the ordinary
course of business and (xiii) restrictions on rights to dispose of assets
subject to Liens permitted under Section 7.3(g), (k), (n), (p), (r), (v)or (w).
7.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement,
including, without limitation, businesses and activities related to the
cleansing of textiles and/or garments and, in each case, activities directly
related thereto or ancillary, complementary or reasonably related thereto.
7.16 Limitation on Amendments to Recapitalization Documents. Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the Merger Agreement or any other document delivered by Raytheon,
Holdings or any of their affiliates in connection therewith except to the extent
that any such amendment, supplement or modification could not reasonably be
expected to have a Material Adverse Effect.
7.17 Limitation on Activities of Holdings and Alliance Laundry
Corporation. In the case of Holdings and Alliance Laundry Corporation,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (a) conduct, transact or otherwise engage in, or commit to conduct,
transact or otherwise engage in, any business or operations other than (i) in
the case of Holdings, those incidental to its ownership of the Capital Stock of
its Subsidiaries and those incidental to Investments by or in Holdings permitted
hereunder, (ii) those incidental to the issuance of the Senior Subordinated
Notes (or any other Indebtedness permitted under Section 7.2(f)), (iii)
activities incidental to the maintenance of its existence and compliance with
applicable laws and legal, tax and accounting matters related thereto and
activities relating to its employees, (iv) activities relating to the
performance of obligations under the Loan Documents to which it is a party and
(v) the receipt and payment of Restricted Payments permitted under Section 7.6,
(b) incur, create, assume or suffer to exist any Indebtedness or other
liabilities or financial obligations, except (i) nonconsensual obligations
imposed by operation of law, (ii) pursuant to the Loan Documents to which it is
a party, (iii) obligations with respect to its Capital Stock, (iv) in the case
of Holdings, in respect of the Senior Subordinated Notes (or any other
Indebtedness permitted under Section 7.2(f)), the Subordinated Seller Notes and
the Management Notes (or any other Indebtedness permitted under Section 7.2(g),
(v) obligations to its employees, officers and directors not prohibited
hereunder, (vi) obligations under the Recapitalization Documents (as in effect
on the Original Closing Date, together with any amendment permitted by Section
7.16), and (vii) in the case of Alliance Laundry Corporation, in respect of the
Senior Subordinated Notes (or any other Indebtedness permitted under Section
7.2(f)), or (c) own, lease, manage or otherwise operate any properties or assets
(including cash (other than cash received in connection with dividends paid by
the Borrower in accordance with Section 7.6 pending application in the manner
contemplated by said Section) and Cash Equivalents) other than, in the case of
Holdings only, the ownership of shares of Capital Stock of the Borrower or in
respect of notes issued to Holdings by management in respect of the purchase of
its Capital Stock.
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SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other written statement furnished by
it at any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been inaccurate in any material respect
on or as of the date made or deemed made; or
(c) (i) Any Loan Party shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to Holdings and the Borrower only) or Section 7 of this Agreement
or (ii) an "Event of Default" under and as defined in any Mortgage shall
have occurred and be continuing; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after the
earlier of (x) the date upon which the Borrower knows or should reasonably
be expected to know the existence of such default or (y) the date upon
which the Borrower receives notice of such default from the Administrative
Agent or any Lender; or
(e) Holdings, the Borrower or any of their respective Subsidiaries
shall (i) default in making any payment of any principal of any
Indebtedness (including, without limitation, any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect
thereto beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness has created; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness 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 beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving
of notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or condition
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at
any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the
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type described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $5,000,000;
or
(f) (i) Holdings, the Borrower or any of their respective Material
Subsidiaries shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or Holdings, the
Borrower or any of their respective Material Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Holdings, the Borrower or any of their respective
Material Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Borrower or any of their
respective Material Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) Holdings, the Borrower or any of their
respective Material Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, the
Borrower or any of their respective Material Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
89
(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of their respective Subsidiaries involving in
the aggregate a liability (to the extent not paid or covered by insurance)
of $2,500,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be
in full force and effect in all material respects (other than in accordance
with its terms), or any Loan Party or any Affiliate of any Loan Party shall
so assert, or any Lien created by any of the Security Documents shall cease
to be enforceable and of the same effect and priority purported to be
created thereby as to Collateral having an aggregate value in excess of
$1,000,000; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect other than in accordance with its terms or any Loan Party shall so
assert; or
(k) (i) Prior to the effectiveness of an initial registered public
offering of common limited liability company interests by Holdings, (A) the
Permitted Investors and the Permitted Co-Investors together shall cease to
have the power to vote or direct the voting of securities having at least
60% of the ordinary voting power for the election of directors or managers
of Holdings (determined on a fully diluted basis), (B) the Permitted
Investors and the Permitted Co-Investors together shall cease to own of
record and beneficially at least 70% of the outstanding common limited
liability company interests of Holdings owned by the Permitted Investors
and the Permitted Co-Investors on the Original Closing Date, (C) the
Permitted Investors shall cease to have the power to vote or direct the
voting of securities having at least 40% of the ordinary voting power for
the election of directors or managers of Holdings (determined on a fully
diluted basis), (D) the Permitted Investors shall cease to own of record
and beneficially at least 70% of the outstanding common limited liability
company interests of Holdings owned by the Permitted Investors on the
Original Closing Date or (E) the board of directors or managers of Holdings
shall cease to consist of a majority of directors or managers appointed by
the Permitted Investors; (ii) after the effectiveness of an initial
registered public offering of common limited liability company interests by
Holdings, (A) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding the Permitted Investors, shall (x) become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of a greater percentage of
the outstanding common limited liability company interests of Holdings than
the percentage of such common limited liability company interests then
owned by the Permitted Investors or (y) have the power to vote or direct
the voting of a greater percentage of the securities having the ordinary
voting power for the election of directors or managers of Holdings
(determined on a fully diluted basis) than the percentage of such
securities then owned by the Permitted Investors; (iii) Holdings shall
cease to own and control, of record and beneficially, directly, 100% of
each class of outstanding Capital Stock of the Borrower
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free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement); or (iv) a Specified Change of Control shall occur;
or
(l) (i) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party, any Affiliate of any Loan Party, the trustee
in respect of the Senior Subordinated Notes or the holders of at least 25%
in aggregate principal amount of the Senior Subordinated Notes shall so
assert or (ii) the Subordinated Seller Notes shall cease, for any reason,
to be validly subordinated to the Obligations;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. With respect to all Letters
of Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this Section, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
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SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein or in any other Loan Document, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
Without limiting the foregoing, it is expressly understood and agreed that the
Agents shall not be responsible in determining whether the conditions set forth
in Section 5 have been satisfied.
9.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party hereto or thereto to perform its
obligations hereunder or thereunder. The Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 Reliance by the Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Holdings or the other Loan Parties),
independent accountants and other experts selected by the Administrative Agent.
The Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of
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assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. Each Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Lenders required to so act
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Each Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Lenders required to so act, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Loans.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender, Holdings or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders); provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which may
come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
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9.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by Holdings or the Borrower and
without limiting the obligation of Holdings or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements which are determined
by a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section 9.7 shall
survive the payment of the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent was not an Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days' prior written notice to the Lenders, the
Syndication Agent, the Issuing Lenders and the Swing Line Lender and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section Section 8(f)
with respect to the Borrower shall have occurred and be continuing) be subject
to approval by the Borrower (which approval shall not be unreasonably withheld
or delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor agent has accepted
appointment as Administrative Agent by the date that is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nonetheless become effective and the
Required Lenders shall perform the duties of the Administrative Agent until such
time as the Required Lenders appoint a successor agent as provided for above.
The Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
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duties, rights, obligations and responsibilities hereunder shall automatically
be assumed by, and inure to the benefit of, the Administrative Agent, without
any further act by the Syndication Agent, the Administrative Agent or any
Lender. After any retiring Agent's resignation as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement and the other Loan
Documents.
9.10 Authorization to Release Liens. The Administrative Agent is hereby
irrevocably authorized by each of the Lenders to release any Lien covering any
Property of the Borrower or any of its Subsidiaries that is the subject of a
Disposition which is permitted by this Agreement or which has been consented to
in accordance with Section 10.1.
9.11 The Arranger; the Documentation Agents. Neither the Arranger nor the
Documentation Agents, in their respective capacities as such, shall have any
duties or responsibilities, and shall incur no liability, under this Agreement
and the other Loan Documents.
9.12 The Administrative Agent and the Secured Parties. Notwithstanding that
the Administrative Agent is named in one or more of the Security Documents as
agent for Qualified Counterparties as well as for the Lenders, each Lender
agrees, on behalf of itself and any affiliate thereof that may at any time be a
Qualified Counterparty under any Specified Hedge Agreement, that the
Administrative Agent (i) shall have no duty or obligation whatsoever to any
Qualified Counterparty under any Specified Hedge Agreement, and (ii) shall have
no duty or obligation to any Qualified Counterparty under any Security Documents
other than the obligation to deliver to such Qualified Counterparty its ratable
share (as determined by the Administrative Agent) of any proceeds received by
the Administrative Agent under the Security Documents upon the exercise by the
Administrative Agent of its remedies thereunder. Without limiting the generality
of the foregoing, each Lender agrees, on behalf of itself and any affiliate
thereof that may at any time be a Qualified Counterparty under any Specified
Hedge Agreement, that (i) the Administrative Agent shall incur no liability to
any Qualified Counterparty as a result of any release by the Administrative
Agent of any Collateral or Guarantors under any Security Document or any other
action or inaction by the Administrative Agent under any Security Document and
(ii) the Administrative Agent shall be entitled to the same exculpations and
protections, in respect of the Qualified Counterparties, as it is entitled to
with respect to the Lenders pursuant to the other provisions of this Section 9
(other than Section 9.7), mutatis mutandis.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(except with respect to amendments to the Security Documents contemplated under
Section 6.10, with the written consent of the Required Lenders) the Agents and
each Loan Party party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder
95
or thereunder or (b) waive, on such terms and conditions as the Required
Lenders, or the Agents, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents or any Default
or Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan or
Reimbursement Obligation, extend the scheduled date of any amortization payment
in respect of any Term Loan, reduce the stated rate of any interest or fee
payable hereunder or extend the scheduled date of any payment thereof, or
increase the stated amount or extend the expiration date of any Commitment of
any Lender, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders or Required
Prepayment Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their obligations under the
Guarantee and Collateral Agreement, in each case without the consent of all
Lenders, except as otherwise provided in this Agreement or any other Loan
Document; (iii) amend, modify or waive any condition precedent to any extension
of credit under the Revolving Credit Facility set forth in Section 5.2
(including, without limitation, in connection with any waiver of an existing
Default or Event of Default) or amend, modify or waive any provision of Section
2.3 without the consent of the Majority Revolving Credit Facility Lenders; (iv)
reduce the percentage specified in the definition of Majority Facility Lenders
with respect to any Facility without the written consent of all Lenders under
such Facility; (v) amend, modify or waive any provision of Section 9 or any
other provision of any Loan Document directly affecting the rights, obligations
or duties of any Agent without the consent of such Agent; (vi) amend, modify or
waive any provision of Section 2.6 or 2.7 without the written consent of the
Swing Line Lender; (vii) amend, modify or waive any provision of Section 2.18
without the consent of each Lender directly affected thereby or amend, modify or
waive any provision of Section 2.12(a), (b) or (c) without the consent of the
Required Prepayment Lenders; (viii) amend, modify or waive any provision of
Section 3 without the consent of the Issuing Lenders and the Administrative
Agent; or (ix) amend, modify or waive Section 9.11 without the consent of the
Arranger. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Agents and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Agents shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon. Any
such waiver, amendment, supplement or modification shall be effected by a
written instrument signed by the parties required to sign pursuant to the
foregoing provisions of this Section; provided, that delivery of an executed
signature page of any such instrument by facsimile transmission shall be
effective as delivery of a manually executed counterpart thereof.
10.2 Notices. Except as otherwise provided herein, all notices, requests
and demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered, or three
Business Days after being deposited in the mail, postage prepaid, or, in the
case of telecopy notice, when received, addressed (a) in the case of Holdings,
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the Borrower and the Administrative Agent, as follows and (b) in the case of the
Lenders, as set forth on Schedule 1 to the Lender Addendum to which such Lender
is a party or, in the case of a Lender which becomes a party to this Agreement
pursuant to an Assignment and Acceptance, in such Assignment and Acceptance or
(c) in the case of any party, to such other address as such party may hereafter
notify to the other parties hereto:
Holdings: Alliance Laundry Holdings LLC
c/o Bain Capital Partners, LLC
111 Huntington Avenue
Boston, Massachusetts 02199
Attention: Steve Zide
Telecopy: (617) 516-2010
with copies to: Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Christopher Butler
Telecopy: (312) 861-2200
The Borrower: Alliance Laundry Systems LLC
P.O. Box 990
Shepard Street
Ripon, WI 54971-0990
Attention: Chief Financial Officer
Telecopy: (920) 748-1629
with copies to: Bain Capital Partners, LLC
111 Huntington Avenue
Boston, Massachusetts 02199
Attention: Steve Zide
Telecopy: (617) 516-2010
and: Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Christopher Butler
Telecopy: (312) 861-2200
The Syndication Agent: Lehman Commercial Paper Inc.
745 Seventh Avenue
19th Floor
New York, New York 10019
Attention: Frank Turner
Telecopy: (212) 526-1463
Telephone: (646) 758-1986
97
The Administrative Agent: General Electric Capital Corporation
500 West Monroe
Suite 1700
Chicago, Illinois 60661
Attention: Chad Blakeman
Telecopy: (312) 441-7344
provided that any notice, request or demand to or upon either Agent or any
Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of either Agent or any Lender, any right, remedy, power
or privilege hereunder or under the other Loan Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the
Agents and the Arranger for all their reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation, syndication
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Agents for all its reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel (including the allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Agents, (c) to pay, indemnify, and hold each
Lender, the Arranger and the Agents harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise (other than excise taxes imposed in lieu of
income taxes) and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, the Arranger and the
Agents and their respective officers, directors, employees, affiliates, agents
and controlling persons (each, an "Indemnitee") harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement and performance
of this Agreement, the other Loan Documents and any
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such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the Letters of Credit or the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of Holdings, the Borrower any of their respective
Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities"), provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities (i) are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (ii) arise
from disputes among the Agents or among the Lenders. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws that any of them might have by
statute or otherwise against any Indemnitee. The agreements in this Section
shall survive repayment of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan or other interest for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or the stated rate of interest
on, the Loans or any fees payable hereunder, or postpone the date of the final
maturity of the Loans or Reimbursement Obligations, in each case to the extent
subject to such participation. The Borrower agrees that if amounts outstanding
under this Agreement and the Loans are due or unpaid after any applicable grace
periods, or shall have been declared or shall have become due and payable upon
the occurrence and during the continuation of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as
99
provided in Section 10.7(a) as fully as if it were a Lender hereunder. The
Borrower also agrees that each Participant shall be entitled to the benefits of
Sections 2.19, 2.20 and 2.21 with respect to its participation in the
Commitments and the Loans and Letters of Credit outstanding from time to time as
if it was a Lender; provided that, in the case of Section 2.20, such Participant
shall have complied with the requirements of said Section and provided, further,
that no Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable law,
at any time and from time to time assign to any Lender or any affiliate or
Approved Fund thereof or, with the consent of the Borrower (if no Event of
Default has occurred and is continuing) and the Agents (which, in each case,
shall not be unreasonably withheld or delayed) (provided that no such consent
need be obtained by the Syndication Agent or any of its affiliates), to an
additional bank, financial institution or other entity (an "Assignee") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit E, executed by
such Assignee and such Assignor (and, where the consent of the Borrower or the
Agents is required pursuant to the foregoing provisions, by the Borrower and
such other Persons) and delivered to the Administrative Agent for its acceptance
and recording in the Register; provided that (i) no such assignment to an
Assignee (other than any Lender or any affiliate or Approved Fund thereof) shall
be in an aggregate principal amount of less than $1,000,000 (other than in the
case of (a) an assignment of all of a Lender's interests under this Agreement or
(b) an assignment to another Lender or an Affiliate of such Assignor), unless
otherwise agreed by the Borrower, the Syndication Agent and the Administrative
Agent and (ii) if the Assignor is a Revolving Credit Lender, such Assignor's
rights and obligations with respect to its Revolving Credit Commitment or any
part thereof shall be assigned to an Eligible Assignee. Any such assignment need
not be ratable as among the Facilities. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have (in
addition to the rights and obligations theretofore held by it) the rights and
obligations of a Lender hereunder with a Commitment and/or Loans as set forth
therein, and (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of an Assignor's
rights and obligations under this Agreement, such Assignor shall cease to be a
party hereto).
(d) The Administrative Agent shall maintain at its address referred to
in Section 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Loans and any Notes evidencing such Loans recorded therein for
all purposes of this Agreement. Any assignment of any Loan, whether or not
evidenced by a Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan
100
evidenced by a Note shall be registered on the Register only upon surrender for
registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the Assignor
and the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "cancelled." The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 10.6(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,000
(treating multiple, simultaneous assignments by or to two or more Related Funds
as a single assignment) (except that no such registration and processing fee
shall be payable (y) in connection with an assignment by Lehman Commercial Paper
Inc. or (z) in the case of an Assignee which is already a Lender or is an
affiliate or Approved Fund of a Lender or a Person under common management with
a Lender), the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Borrower. On or prior to such effective date,
the Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Revolving Credit Note and/or
applicable Term Notes, as the case may be, of the assigning Lender) a new
Revolving Credit Note and/or applicable Term Notes, as the case may be, to the
order of such Assignee in an amount equal to the Revolving Credit Commitment
and/or applicable Term Loans, as the case may be, assumed or acquired by it
pursuant to such Assignment and Acceptance and, if the Assignor has retained a
Revolving Credit Commitment and/or Term Loans, as the case may be, upon request,
a new Revolving Credit Note and/or Term Notes, as the case may be, to the order
of the Assignor in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, retained by it hereunder. Such new
Note or Notes shall be dated the Effective Date and shall otherwise be in the
form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement
provides for payments to be allocated to a particular Lender or to the Lenders
under a particular Facility, if any Lender (a "Benefitted Lender") shall at any
time receive any payment of all or part of the Obligations owing to it, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 8(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Obligations, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Obligations, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the
101
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to Holdings or the
Borrower, any such notice being expressly waived by Holdings and the Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by Holdings or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) after any applicable grace period, to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of Holdings or the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents (and the
other agreements referred to in Section 2.9) represent the agreement of
Holdings, the Borrower, the Subsidiaries, the Agents, the Arranger and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agents, the Arranger or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of Holdings and the
Borrower hereby irrevocably and unconditionally:
102
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to Holdings
or the Borrower, as the case may be, at its address set forth in Section
10.2 or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential
damages.
10.13 Acknowledgments. Each of Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) no Agent, Lender or the Arranger has any fiduciary relationship
with or duty to Holdings or the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between the Administrative Agent, the Syndication Agent and
the Lenders, on one hand, and Holdings and the Borrower, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among Holdings, the Borrower and the Lenders.
10.14 Confidentiality. Each of the Agents and the Lenders agrees to
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent any Agent
or any Lender from disclosing any such information (a) to either Agent, any
other Lender or any affiliate of any Lender, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee which agrees in writing to
comply with the provisions of this Section, (c) any of its employees, directors,
agents,
103
attorneys, accountants and other professional advisors, (d) upon the request or
demand of any Governmental Authority having jurisdiction over it (in which case
(except when the relevant Governmental Authority is conducting a regular
examination) the relevant Agent or Lender shall give the Borrower prior notice
thereof to the extent practicable), (e) in response to any order of any court or
other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law (in which case the relevant Agent or Lender shall give the
Borrower prior notice thereof to the extent practicable), (f) if requested or
required to do so in connection with any litigation or similar proceeding (in
which case the relevant Agent or Lender shall give the Borrower prior notice
thereof to the extent practicable), (g) which has been publicly disclosed other
than in breach of this Section 10.14 by such Agent or Lender, (h) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document or (j) to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section 10.14).
10.15 Enforceability; Usury. In no event shall any provision of this
Agreement, the Notes, or any other instrument evidencing or securing the
indebtedness of the Borrower hereunder ever obligate the Borrower to pay or
allow any Lender to collect interest on the Loans or any other indebtedness of
the Borrower hereunder at a rate greater than the maximum non-usurious rate
permitted by applicable law (herein referred to as the "Highest Lawful Rate"),
or obligate the Borrower to pay any taxes, assessments, charges, insurance
premiums or other amounts to the extent that such payments, when added to the
interest payable on the Loans, would be held to constitute the payment by the
Borrower of interest at a rate greater than the Highest Lawful Rate; and this
provision shall control over any provision to the contrary.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the indebtedness of the
Borrower hereunder shall be accelerated for any reason, then such principal
amount so accelerated shall be credited with any interest theretofore paid
thereon in advance and remaining unearned at the time of such acceleration. If,
pursuant to the terms of this Agreement or the Notes, any funds are applied to
the payment of any part of the principal amount of the indebtedness of the
Borrower hereunder prior to the maturity thereof, then (a) any interest which
would otherwise thereafter accrue on the principal amount so paid by such
application shall be canceled, and (b) the indebtedness of the Borrower
hereunder remaining unpaid after such application shall be credited with the
amount of all interest, if any, theretofore collected on the principal amount so
paid by such application and remaining unearned at the date of said application;
and if the funds so applied shall be sufficient to pay in full all the
indebtedness of the Borrower hereunder, then the Lenders shall refund to the
Borrower all interest theretofore paid thereon in advance and remaining unearned
at the time of such acceleration. Regardless of any other provision in this
Agreement, or in any of the written evidences of the indebtedness of the
Borrower hereunder, the Borrower shall never be required to pay any unearned
interest on such indebtedness or any portion thereof, and shall never be
required to pay interest thereon at a rate in excess of the Highest Lawful Rate
construed by courts having competent jurisdiction thereof.
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10.16 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENTS, THE
ARRANGER AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.17 Effect of Amendment and Restatement of the Existing Credit
Agreement. On the Effective Date, the Existing Credit Agreement shall be
amended, restated and superseded in its entirety. The parties hereto acknowledge
and agree that (a) this Agreement and the other Loan Documents, whether executed
and delivered in connection herewith or otherwise, do not constitute a novation,
payment and reborrowing, or termination of the "Obligations" (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement as in effect
prior to the Effective Date, (b) such "Obligations" are in all respects
continuing (as amended and restated hereby) with only the terms thereof being
modified as provided in this Agreement and (c) upon the effectiveness of this
Agreement all Loans of Lenders outstanding under the Existing Credit Agreement
immediately before the effectiveness of this Agreement will be converted into
Loans hereunder on the terms and conditions set forth in this Agreement.
10.18 Special Provisions(a) From and after the Effective Date, (i) each
Exiting Lender shall cease to be a party to this Agreement, (ii) no Exiting
Lender shall have any obligations or liabilities under this Agreement with
respect to the period from and after the Effective Date and, without limiting
the foregoing, no Exiting Lender shall have any Revolving Credit Commitment
under this Agreement or any participation in any Letter of Credit outstanding
hereunder and (iii) no Exiting Lender shall have any rights under the Existing
Credit Agreement, this Agreement or any other Loan Document (other than rights
under the Existing Credit Agreement expressly stated to survive the termination
of the Existing Credit Agreement and the repayment of amounts outstanding
thereunder).
(b) On the Effective Date, each Lender that is not party to the
Existing Credit Agreement and each Lender whose Commitment exceeds its
commitment under the Existing Credit Agreement shall be deemed to have purchased
the Commitments of each Exiting Lender and each Lender whose Commitment is less
than its commitment under the Existing Credit Agreement such that the Revolving
Credit Commitment and Term Loan Commitment of each relevant Lender will be as
set forth in the Lender Addendum for such Lender. Each such Lender agrees that
the provisions of Section 2 of the form of Assignment and Acceptance, attached
hereto as Exhibit E, shall apply to it mutatis mutandis.
(c) The Lenders (which are Revolving Credit Lenders under the
Existing Credit Agreement) hereby waive any requirements for notice of
prepayment, commitment terminations, minimum amounts of prepayments of Revolving
Credit Loans (as defined in the Existing Credit Agreement), ratable reductions
of Revolving Credit Commitments (as defined in the Existing Credit Agreement)
and ratable payments on account of the principal or interest of any Revolving
Credit Loan (as defined in the Existing Credit Agreement) under the Existing
Credit Agreement to the extent such prepayment, reductions or payments are
required pursuant to subsection 5.1(k).
105
(d) The Lenders (which are Term Loan Lenders under the Existing
Credit Agreement) hereby waive any requirements for notice of prepayment,
commitment terminations, minimum amounts of prepayments of Term Loans (as
defined in the Existing Credit Agreement), ratable reductions of Term Loan
Commitments (as defined in the Existing Credit Agreement) and ratable payments
on account of the principal or interest of any Term Loan (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement to the extent
such prepayment, reductions or payments are required pursuant to subsection
5.1(k).
(e) The Lenders hereby confirm that, from and after the making of the
initial Loans, all participations of the Lenders in respect of Letters of Credit
outstanding hereunder pursuant to subsection 3.4(a) shall be based upon the
Revolving Credit Percentages of the Lenders (after giving effect to this
Agreement).
(f) The Borrower hereby releases, effective as of the making of the
initial Loans, in full the Exiting Lenders from their obligations in respect of
the Revolving Credit Commitments (as defined in the Existing Credit Agreement)
and, effective as of the Effective Date, the Lenders hereby assume such
obligations, it being understood that such assumption is reflected in the
Commitments of the Lenders hereunder.
10.19 Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Borrower and the Administrative
Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ALLIANCE LAUNDRY HOLDINGS LLC
By: /s/ Bruce P. Rounds
-------------------------------
Name: Bruce P. Rounds
Title: Chief Financial Officer
ALLIANCE LAUNDRY SYSTEMS LLC
By: /s/ Bruce P. Rounds
-------------------------------
Name: Bruce P. Rounds
Title: Chief Financial Officer
LEHMAN BROTHERS INC., as Sole
Advisor, Sole Lead Arranger and Sole
Bookrunner
By: /s/ Frank P. Turner
-------------------------------
Name: Frank P. Turner
Title: Authorized Signatory
LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent
By: /s/ Frank P. Turner
-------------------------------
Name: Frank P. Turner
Title: Authorized Signatory
FLEET NATIONAL BANK,
as Documentation Agent
By: /s/ Shailesh Patel
---------------------------------
Name: Shailesh Patel
Title: Director
LASALLE BANK NATIONAL ASSOCIATION,
as Documentation Agent
By: /s/ Joseph G. Schaefer
---------------------------------
Name: Joseph G. Schaefer
Title: Commercial Lending Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
By: /s/ Chad S. Blakeman
---------------------------------
Name: Chad S. Blakeman
Title: Duly Authorized Signatory
Annex A
PRICING GRID FOR REVOLVING CREDIT LOANS AND SWING LINE LOANS
=================================================================================================
Applicable Margin
-----------------------------------------------------------
Consolidated Leverage Ratio Eurodollar Loans Base Rate Loans
- -------------------------------------------------------------------------------------------------
greater than 5.0 to 1.0 3.50% 2.50%
- -------------------------------------------------------------------------------------------------
Less than or equal to 5.0 to 1.0 but greater than 4.5 to 1.0 3.25% 2.25%
- -------------------------------------------------------------------------------------------------
Less than or equal to 4.5 to 1.0 but greater than 4.0 to 1.0 3.00% 2.00%
- -------------------------------------------------------------------------------------------------
Less than or equal to 4.0 to 1.0 but greater than 3.5 to 1.0 2.75% 1.75%
- -------------------------------------------------------------------------------------------------
Less than or equal to 3.5 to 1.0 2.50% 1.50%
=================================================================================================
Changes in the Applicable Margin with respect to Loans resulting from changes in
the Consolidated Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to Section 6.1 (but in any event not later than the date such financial
statements are due pursuant to Section 6.1) and shall remain in effect until the
next change to be effected pursuant to this paragraph. If any financial
statements referred to above are not delivered within the time periods specified
above, then, until such financial statements are delivered, the Consolidated
Leverage Ratio as at the end of the fiscal period that would have been covered
thereby shall for the purposes of this definition be deemed to be greater than
5.0 to 1. Each determination of the Consolidated Leverage Ratio pursuant to this
definition shall be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by the relevant
financial statements.