EXHIBIT 10.2
CREDIT AND GUARANTY AGREEMENT
DATED AS OF MARCH 25, 2004
AMONG
AAC ACQUISITION CORP.,
(TO BE MERGED WITH AND INTO AMERICAN ACHIEVEMENT CORPORATION)
AAC HOLDING CORP.,
CERTAIN SUBSIDIARIES OF AMERICAN ACHIEVEMENT CORPORATION,
AS GUARANTORS,
VARIOUS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS JOINT LEAD ARRANGER, JOINT BOOKRUNNER,
ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
DEUTSCHE BANK SECURITIES INC.
AS JOINT LEAD ARRANGER AND JOINT BOOKRUNNER,
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,
AS SYNDICATION AGENT
CIT LENDING SERVICES CORPORATION,
GENERAL ELECTRIC CAPITAL CORPORATION,
AND
MERRILL LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC.,
AS CO-DOCUMENTATION AGENTS
$195,000,000 SENIOR SECURED CREDIT FACILITIES
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS AND INTERPRETATION......................................................................... 2
1.1. Definitions....................................................................................... 2
1.2. Accounting Terms.................................................................................. 34
1.3. Interpretation, etc............................................................................... 34
SECTION 2. LOANS AND LETTERS OF CREDIT............................................................................ 34
2.1. Term Loans........................................................................................ 34
2.2. Revolving Loans................................................................................... 35
2.3. Swing Line Loans.................................................................................. 36
2.4. Issuance of Letters of Credit and Purchase of Participations Therein.............................. 39
2.5. Pro Rata Shares; Availability of Funds............................................................ 43
2.6. Use of Proceeds................................................................................... 43
2.7. Evidence of Debt; Register; Lenders' Books and Records; Notes..................................... 44
2.8. Interest on Loans................................................................................. 44
2.9. Conversion/Continuation........................................................................... 47
2.10. Default Interest................................................................................. 47
2.11. Fees............................................................................................. 48
2.12. Scheduled Payments/Commitment Reductions......................................................... 48
2.13. Voluntary Prepayments/Commitment Reductions...................................................... 50
2.14. Mandatory Prepayments/Commitment Reductions...................................................... 51
2.15. Application of Prepayments/Reductions............................................................ 53
2.16. General Provisions Regarding Payments............................................................ 54
2.17. Ratable Sharing.................................................................................. 55
2.18. Making or Maintaining Eurodollar Rate Loans...................................................... 56
2.19. Increased Costs; Capital Adequacy................................................................ 58
2.20. Taxes; Withholding, etc.......................................................................... 60
2.21. Obligation to Mitigate........................................................................... 61
2.22. Defaulting Lenders............................................................................... 62
2.23. Removal or Replacement of a Lender............................................................... 63
2.24. Incremental Facilities........................................................................... 64
SECTION 3. CONDITIONS PRECEDENT................................................................................... 66
3.1. Closing Date...................................................................................... 66
3.2. Conditions to Each Credit Extension............................................................... 71
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................................................... 72
4.1. Organization; Requisite Power and Authority; Qualification........................................ 72
4.2. Capital Stock and Ownership....................................................................... 73
4.3. Due Authorization................................................................................. 73
4.4. No Conflict....................................................................................... 73
4.5. Governmental Consents............................................................................. 73
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4.6. Binding Obligation................................................................................ 74
4.7. Historical Financial Statements................................................................... 74
4.8. Projections....................................................................................... 74
4.9. No Material Adverse Change........................................................................ 74
4.10. No Restricted Junior Payments.................................................................... 74
4.11. Adverse Proceedings, etc. ....................................................................... 74
4.12. Payment of Taxes................................................................................. 75
4.13. Properties....................................................................................... 75
4.14. Environmental Matters............................................................................ 75
4.15. No Defaults...................................................................................... 76
4.16. Material Contracts............................................................................... 76
4.17. Governmental Regulation.......................................................................... 76
4.18. Margin Stock..................................................................................... 76
4.19. Employee Matters................................................................................. 77
4.20. Employee Benefit Plans........................................................................... 77
4.21. Certain Fees..................................................................................... 78
4.22. Solvency......................................................................................... 78
4.23. Related Agreements............................................................................... 78
4.24. Compliance with Statutes, etc.................................................................... 78
4.25. Disclosure....................................................................................... 78
4.26. Subordination. Designation of the Credit Documents as "Designated Senior Debt"; Etc. ........... 78
SECTION 5. AFFIRMATIVE COVENANTS.................................................................................. 79
5.1. Financial Statements and Other Reports............................................................ 79
5.2. Existence......................................................................................... 84
5.3. Payment of Taxes and Claims....................................................................... 84
5.4. Maintenance of Properties......................................................................... 84
5.5. Insurance......................................................................................... 84
5.6. Inspections....................................................................................... 85
5.7. Lenders Meetings.................................................................................. 85
5.8. Compliance with Laws.............................................................................. 85
5.9. Environmental..................................................................................... 85
5.10. Subsidiaries..................................................................................... 87
5.11. Additional Material Real Estate Assets........................................................... 87
5.12. Interest Rate Protection......................................................................... 88
5.13. Further Assurances............................................................................... 88
5.14. Cash Management Systems.......................................................................... 88
5.15. Certain Post-Closing Obligations................................................................. 88
SECTION 6. NEGATIVE COVENANTS..................................................................................... 89
6.1. Indebtedness...................................................................................... 89
6.2. Liens............................................................................................. 91
6.3. Equitable Lien.................................................................................... 93
6.4. No Further Negative Pledges....................................................................... 94
6.5. Restricted Junior Payments........................................................................ 94
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6.6. Restrictions on Subsidiary Distributions.......................................................... 95
6.7. Investments....................................................................................... 96
6.8. Financial Covenants............................................................................... 97
6.9. Fundamental Changes; Disposition of Assets; Acquisitions.......................................... 98
6.10. Disposal of Subsidiary Interests................................................................. 99
6.11. Sales and Lease-Backs............................................................................ 99
6.12. Transactions with Shareholders and Affiliates.................................................... 100
6.13. Conduct of Business.............................................................................. 100
6.14. Permitted Activities of Holdings................................................................. 100
6.15. Amendments or Waivers of Certain Related Agreements.............................................. 100
6.16. Amendments or Waivers of with respect to Subordinated Indebtedness and the Gold Consignment
Agreement....................................................................................... 101
6.17. Fiscal Year...................................................................................... 101
6.18. No Other "Designated Senior Indebtedness"........................................................ 101
SECTION 7. GUARANTY............................................................................................... 101
7.1. Guaranty of the Obligations....................................................................... 101
7.2. Contribution by Guarantors........................................................................ 102
7.3. Payment by Guarantors............................................................................. 102
7.4. Liability of Guarantors Absolute.................................................................. 103
7.5. Waivers by Guarantors............................................................................. 105
7.6. Guarantors' Rights of Subrogation, Contribution, etc.............................................. 105
7.7. Subordination of Other Obligations................................................................ 106
7.8. Continuing Guaranty............................................................................... 106
7.9. Authority of Guarantors or the Company............................................................ 106
7.10. Financial Condition of the Company and Guarantors................................................ 106
7.11. Bankruptcy, etc.................................................................................. 107
7.12. Discharge of Guaranty Upon Sale of Guarantor..................................................... 108
SECTION 8. EVENTS OF DEFAULT...................................................................................... 108
8.1. Events of Default................................................................................. 108
SECTION 9. AGENTS 2 .............................................................................................. 111
9.1. Appointment of Agents............................................................................. 111
9.2. Powers and Duties................................................................................. 112
9.3. General Immunity.................................................................................. 112
9.4. Agents Entitled to Act as Lender.................................................................. 113
9.5. Lenders' Representations, Warranties and Acknowledgment........................................... 113
9.6. Right to Indemnity................................................................................ 113
9.7. Successor Administrative Agent, Collateral Agent and Swing Line Lender............................ 114
9.8. Collateral Documents and Guaranty................................................................. 115
SECTION 10. MISCELLANEOUS......................................................................................... 116
10.1. Notices.......................................................................................... 116
10.2. Expenses......................................................................................... 116
10.3. Indemnity........................................................................................ 117
10.4. Set-Off.......................................................................................... 117
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10.5. Amendments and Waivers........................................................................... 118
10.6. Successors and Assigns; Participations........................................................... 120
10.7. Independence of Covenants........................................................................ 123
10.8. Survival of Representations, Warranties and Agreements........................................... 123
10.9. No Waiver; Remedies Cumulative................................................................... 123
10.10. Marshalling; Payments Set Aside................................................................. 124
10.11. Severability.................................................................................... 124
10.12. Obligations Several; Independent Nature of Lenders' Rights...................................... 124
10.13. Headings........................................................................................ 124
10.14. APPLICABLE LAW.................................................................................. 124
10.15. CONSENT TO JURISDICTION......................................................................... 125
10.16. WAIVER OF JURY TRIAL............................................................................ 125
10.17. Confidentiality................................................................................. 126
10.18. Usury Savings Clause............................................................................ 126
10.19. Counterparts.................................................................................... 127
10.20. Effectiveness................................................................................... 127
10.21. USA Patriot Act................................................................................. 127
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APPENDICES: A-1 Tranche B Term Loan Commitments
A-2 Revolving Commitments
B Notice Addresses
SCHEDULES: 1.1(a) Certain Adjustments to Financial Covenant Definitions
1.1(b) Existing Capital Leases
3.1(i) Closing Date Mortgaged Properties
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.11 Certain Adverse Proceedings
4.13 Real Estate Assets
4.14 Certain Environmental Matters
4.17 Material Contracts
5.14 Cash Management Systems
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
A-3 Issuance Notice
B-1 Tranche B Term Loan Note
B-2 Revolving Loan Note
B-3 Swing Line Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I Pledge and Security Agreement
J Mortgage
K Landlord Waiver and Consent Agreement
M Joinder Agreement
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of March 25,
2004, is entered into by and among AAC ACQUISITION CORP. ("AAC"), a Delaware
corporation, AAC HOLDING CORP. ("HOLDINGS")., a Delaware corporation, CERTAIN
SUBSIDIARIES OF AMERICAN ACHIEVEMENT CORPORATION, as Guarantors, the Lenders
party thereto from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as
Joint Lead Arranger, Joint Book Runner, Administrative Agent (together with its
permitted successors in such capacity, "ADMINISTRATIVE AGENT") and as Collateral
Agent (together with its permitted successors in such capacity, "COLLATERAL
AGENT"), DEUTSCHE BANK SECURITIES INC. ("DBSI"), as a Joint Lead Arranger and
Joint Bookrunner and DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH ("DBCI"), as
Syndication Agent (in such capacity, "SYNDICATION AGENT") and CIT LENDING
SERVICES CORPORATION ("CIT"), as a Co-Documentation Agent, GENERAL ELECTRIC
CAPITAL CORPORATION ("GE CAPITAL"), as a Co-Documentation Agent and MERRILL
LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
("ML"), as a Co-Documentation Agent (each, in such capacity, a "CO-DOCUMENTATION
AGENT").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Holdings, a corporation newly-formed by the Sponsor was formed
to own all of the capital stock of AAC;
WHEREAS, Holdings has entered into the Merger Agreement with the
Sellers pursuant to which Holdings has agreed to acquire American Achievement
through the Merger in which AAC, a wholly-owned subsidiary of Holdings, will
merge with and into American Achievement;
WHEREAS, Lenders have agreed to extend certain credit facilities to the
Company, in an aggregate amount not to exceed $195.0 million, consisting of
$155.0 million aggregate principal amount of Tranche B Term Loans, and up to
$40.0 million aggregate principal amount of Revolving Commitments, the proceeds
of which will be used together with the proceeds of the Senior Subordinated
Notes to fund, in part, the Acquisition (including refinancing, retiring or
covenant defeasing certain existing debt, the Redemptions, and paying fees,
commissions and expenses in connection with the Acquisition) for permitted
capital expenditures and Permitted Acquisitions, to provide for the ongoing
working capital requirements of the Company following the Acquisition and for
general corporate purposes;
WHEREAS, the Company has agreed to secure all of its Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a First
Priority Lien on substantially all of its assets, including a pledge of all of
the Capital Stock of each of its Domestic Subsidiaries and 65% of all the
Capital Stock of each of its Foreign Subsidiaries; and
WHEREAS, Guarantors have agreed to guarantee the obligations of the
Company hereunder and to secure their respective Obligations by granting to
Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on
substantially all of their respective assets, including a pledge of all of the
Capital Stock of each of their respective Domestic Subsidiaries (including the
Company) and 65% of all the Capital Stock of each of their respective Foreign
Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"AA NOTES" means the 11-5/8% Senior Notes due 2007 of American
Achievement issued pursuant to that certain Indenture, dated as of February 20,
2002, among American Achievement, The Bank of New York, as Trustee and the
Guarantors party thereto.
"AAC" means AAC Acquisition Corp.
"ACQUISITION" means the acquisition by Holdings of American
Achievement pursuant to the Merger, in accordance with the Acquisition
Documents.
"ACQUISITION DOCUMENTS" means the Merger Agreement and all
other material documents executed and delivered in accordance with the terms
thereof and in connection therewith.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (and rounding upward to the next
whole multiple of 1/100 of 1%) (i) (a) the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate which appears on the page of the Telerate Screen which displays
an average British Bankers Association Interest Settlement Rate (such page
currently being page number 3740 or 3750, as applicable) for deposits (for
delivery on the first day of such period) with a term equivalent to such period
in Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (b) in the event the rate referenced
in the preceding clause (a) does not appear on such page or service or if such
page or service shall cease to be available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market by DBCI for deposits
2
(for delivery on the first day of the relevant period) in Dollars of amounts in
same day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on such Interest
Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Holdings or any of its Subsidiaries, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.18(b).
"AFFECTED LOANS" as defined in Section 2.18(b).
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 5% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise;
provided, that no Agent or Lender shall be deemed to be an "Affiliate" of any
Credit Party.
"AGENT" means each of Syndication Agent, Administrative Agent,
Collateral Agent and each Co-Documentation Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.17.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as
of March 25, 2004, as it may be amended, supplemented or otherwise modified from
time to time.
"AMERICAN ACHIEVEMENT" means American Achievement Corporation.
"APPLICABLE MARGIN" means:
(a) from the Closing Date until the commencement of the first
interest period occurring after the date of delivery of the Compliance
Certificate and the financial statements for
3
the second full Fiscal Quarter after the Closing Date (i) with respect to
Revolving Loans that are Eurodollar Rate Loans, 2.75%, per annum (ii) with
respect to Revolving Loans and Swing Line Loans that are Base Rate Loans, 1.75%
per annum; (b) thereafter, with respect to Revolving Loans and Swing Line Loans,
a percentage, per annum, determined by reference to the Leverage Ratio in effect
from time to time as set forth below:
APPLICABLE MARGIN FOR
APPLICABLE MARGIN FOR REVOLVING LOANS AND
REVOLVING LOANS SWING LINE LOANS
LEVERAGE RATIO (EURODOLLAR LOANS) (BASE RATE LOANS)
- -------------- --------------------- ---------------------
> or = 5.5:1.00 3.00% 2.00%
< 5.5:1.00 2.75% 1.75%
> or = 4.5:1.00
< 4.5:1.00 2.50% 1.50%
> or = 4.0:1.00
< 4.0:1.00 2.25% 1.25%
> or = 3.5:1.00
< 3.5:1.00 2.00% 1.00%
and (c) with respect to the Tranche B Term Loans, a percentage, per annum,
determined by reference to the Leverage Ratio in effect from time to time as set
forth below:
APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
TRANCHE B TERM LOANS TRANCHE B TERM LOANS
LEVERAGE RATIO (EURODOLLAR LOANS) (BASE RATE LOANS)
- --------------- --------------------- ---------------------
> or = 4.0:1.00 2.50% 1.50
< 4.0:1.00 2.25% 1.25%
No change in the Applicable Margin shall be effective until three Business Days
after the date on which Administrative Agent shall have received the applicable
financial statements and a Compliance Certificate pursuant to Section 5.1(d)
calculating the Leverage Ratio. At any time and so long as the Company has not
submitted to Administrative Agent the applicable information as and when
required under Section 5.1(d), the Applicable Margin shall be determined as if
the Leverage Ratio were in excess of 5.5:1.00 in the case of Revolving Loans and
Swing Line Loans and 4.0:1.00 in the case of Tranche B Term Loans. Within one
Business Day of receipt of the applicable information under Section 5.1(d),
Administrative Agent shall give each Lender telefacsimile or telephonic notice
(confirmed in writing) of the Applicable Margin in effect from such date.
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"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any
Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any basic marginal, special,
supplemental, emergency or other reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System or other applicable banking regulator.
Without limiting the effect of the foregoing, the Applicable Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by
reference to which the applicable Adjusted Eurodollar Rate or any other interest
rate of a Loan is to be determined, or (ii) any category of extensions of credit
or other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan
shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the Applicable
Reserve Requirement.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than the
Company or any Guarantor Subsidiary), in one transaction or a series of
transactions, of all or any part of Holdings' or any of its Subsidiaries'
businesses, assets or properties of any kind, whether real, personal, or mixed
and whether tangible or intangible, whether now owned or hereafter acquired,
including, without limitation, the Capital Stock of any of Holdings'
Subsidiaries, other than (i) inventory (or other assets) sold, licensed or
leased in the ordinary course of business (excluding any such sales, licenses or
leases by operations or divisions discontinued or to be discontinued), (ii)
disposals of obsolete, worn-out or surplus property for aggregate consideration
of less than $250,000 with respect to any transaction or series of related
transactions or in the aggregate during any Fiscal Year, and (iii) sales of
other assets for aggregate consideration of less than $500,000 with respect to
any transaction or series of related transactions or in the aggregate during any
Fiscal Year.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption
Agreement substantially in the form of Exhibit E, with such amendments or
modifications as may be approved by Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any
individual holding the position of chairman of the board (if an officer), chief
executive officer, president or one of its vice presidents (or the equivalent
thereof), and such Person's chief financial officer, treasurer or controller.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Base
Rate due to a change in the Prime Rate or the Federal
5
Funds Effective Rate shall be effective on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Base Rate.
"BENEFICIARY" means each Agent, Issuing Bank, Lender, Lender
Counterparty, and Indemnitee.
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of New York or
is a day on which banking institutions located in such state are authorized or
required by law or other governmental action to close and (ii) with respect to
all notices, determinations, fundings and payments in connection with the
Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term "BUSINESS DAY"
shall mean 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 London
interbank market.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means 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), including, without limitation, partnership interests and
membership interests, and any and all warrants, rights or options to purchase or
other arrangements or rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand
or Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Moody's; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; and (v) shares of any money
market mutual fund that (a) has substantially all of its assets invested
continuously in
6
the types of investments referred to in clauses (i) and (ii) above, (b) has net
assets of not less than $500,000,000, and (c) has the highest rating obtainable
from either S&P or Moody's.
"CB NOTES CALL" means the exercise of the Company's call right
in respect of the CB Notes pursuant to Section 3.7 of the CB Notes Indenture.
"CB NOTES" means the 11% Senior Subordinated Notes due 2007 of
Commemorative Brands, Inc. issued pursuant to that certain Indenture dated as of
December 16, 1996, between Scholastic Brands, Inc. and HSBC Bank USA (f/k/a
Marine Midland Bank), as trustee (the "CB NOTES INDENTURE").
"CBI POST RETIREMENT MEDICAL PLAN" means Retirement Plans for
the Retirees of Balfour, a Division of Commemorative Brands, Inc. (including
medical and death benefits).
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit F.
"CHANGE OF CONTROL" means, at any time, (i) the Equity
Investors shall cease to beneficially own and control at least 75% on a fully
diluted basis of the economic and voting interests in the Capital Stock of
Holdings; (ii) any Person or "group" (within the meaning of Rules 13d-3 and
13d-5 under the Exchange Act) other than the Equity Investors (a) shall have
acquired beneficial ownership of 25% or more on a fully diluted basis of the
voting and/or economic interest in the Capital Stock of Holdings or (b) shall
have obtained the power (whether or not exercised) to elect a majority of the
members of the board of directors (or similar governing body) of Holdings; (iii)
Holdings shall cease to beneficially own and control 100% on a fully diluted
basis of the economic and voting interest in the Capital Stock of the Company;
(iv) the majority of the seats (other than vacant seats) on the board of
directors (or similar governing body) of the Company cease to be occupied by
Persons who either (a) were members of the board of directors of the Company on
the Closing Date or (b) were nominated for election by the Sponsor or the board
of directors of the Company, a majority of whom were directors on the Closing
Date or whose election or nomination for election was previously approved by a
majority of such directors; or (v) any "change of control" or similar event
under the Senior Subordinated Notes or the Refinancing Notes that would require
the Company to tender for or otherwise give rise to an accelerated repayment of
the Senior Subordinated Notes or the Refinancing Notes.
"CIT" as defined in the preamble hereto.
"CLASS" means (i) with respect to Lenders, each of the
following classes of Lenders: (a) Lenders having Tranche B Term Loan Exposure,
(b) Lenders having Revolving Exposure (including Swing Line Lender) and (c)
Lenders having New Term Loan Exposure of each Series, and (ii) with respect to
Loans, each of the following classes of Loans: (a) Tranche B Term Loans, (b)
Revolving Loans (including Swing Line Loans) and (c) each Series of New Term
Loans.
"CLOSING DATE" means the date on which the Term Loans are
made.
7
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G-1.
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section
3.1(i).
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL AGENT" as defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security
Agreement, the Mortgages, the Landlord Personal Property Collateral Access
Agreements, if any, the Gold Consignment Intercreditor Agreement and all other
instruments, documents and agreements delivered by any Credit Party pursuant to
this Agreement or any of the other Credit Documents in order to (a) grant to
Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or
mixed property of that Credit Party as security for the Obligations and/or (b)
perfect such Liens.
"COLLATERAL QUESTIONNAIRE" means a certificate in form
satisfactory to Collateral Agent that provides information with respect to the
personal or mixed property of each Credit Party.
"COMMITMENT" means any Revolving Commitment, Term Loan
Commitment, New Revolving Commitment or New Term Loan Commitment.
"COMMITMENT FEE PERCENTAGE" means 0.50% per annum.
"COMPANY" means, prior to consummation of the Merger, AAC and
after consummation of the Merger, American Achievement.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"CO-DOCUMENTATION AGENT" as defined in the preamble hereto.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an
amount determined for Holdings and its Subsidiaries on a consolidated basis
equal to (i) the sum, without duplication, of the amounts for such period of (a)
Consolidated Net Income, (b) Consolidated Interest Expense, (c) provisions for
taxes based on income, (d) total depreciation expense, (e) total amortization
expense, (f) Transaction Costs incurred and paid in the period, (g) Management
Fees accrued or paid in such period (excluding any Management Fees paid in such
period to the extent they represent an accrual in a prior period), (h)
restructuring charges in Fiscal Years 2004, 2005, 2006 and 2007 but limited to
(1) $3,600,000 in Fiscal Year 2004, (2) $6,200,000 in Fiscal Year 2005 and (3)
$1,500,000 in Fiscal Year 2006; provided such amount for any Fiscal Year shall
be increased by an amount equal to the unused amount from the previous Fiscal
Year (including any amount that was
8
unused as a result of an increase from any prior Fiscal Year) and any such
unused amount at the end of Fiscal Year 2006 (but only such unused amount) may
be added in respect of restructuring charges in Fiscal Year 2007, (i) losses
related to the redemption of AA Notes not repurchased on or prior to the Closing
Date in the Debt Tender and (j) other non-Cash items (including non-Cash
purchase accounting adjustments) reducing Consolidated Net Income (excluding any
such non-Cash item to the extent that it represents an accrual or reserve for
potential Cash items in any future period or amortization of a prepaid Cash item
that was paid in a prior period), minus (ii) other non-Cash items increasing
Consolidated Net Income for such period (excluding any such non-Cash item to the
extent it represents the reversal of an accrual or reserve for potential Cash
item in any prior period); provided that with respect to any calculation period
ending prior to the first anniversary of the Closing Date, the foregoing shall
be subject to adjustment as set forth in Schedule 1.1(a).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Holdings and its Subsidiaries during such
period determined on a consolidated basis that, in accordance with GAAP, are or
should be included in "purchase of property and equipment" or similar items
reflected in the consolidated statement of cash flows of Holdings and its
Subsidiaries, but excluding the purchase price of any Permitted Acquisition.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding any amount not payable
in Cash; provided that with respect to any calculation period ending prior to
the first anniversary of the Closing Date, the foregoing shall be subject to
adjustment as set forth in Schedule 1.1(a).
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Holdings and its Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of long term debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
amount (if positive) equal to: (i) the sum, without duplication, of the amounts
for such period of (a) Consolidated Adjusted EBITDA (but determined by adding
back thereto, but without duplication, any amounts deducted in the calculation
of Consolidated Net Income for such Fiscal Year that were paid, incurred, or
accrued in violation of any of the provisions of this Agreement), plus (b) the
Consolidated Working Capital Adjustment, minus (ii) the sum, without
duplication, of the amounts for such period of (a) voluntary and scheduled
repayments of Consolidated Total Debt to the extent such payments are not
prohibited by this Agreement (excluding repayments of Revolving Loans or Swing
Line Loans except to the extent the Revolving Commitments are permanently
reduced in connection with such repayments), (b) Consolidated Capital
Expenditures to the extent such Consolidated Capital Expenditures are permitted
under this Agreement (net of any proceeds of (y) any related financings with
respect to such expenditures and (z) any sales of assets used to finance such
expenditures),
9
(c) Consolidated Cash Interest Expense to the extent related to Indebtedness
permitted under this Agreement, (d) taxes based on income of Holdings and its
Subsidiaries payable in Cash with respect to such period and actually paid, (e)
Management Fees paid in Cash and permitted to be paid under this Agreement, (f)
distributions to Holdings made pursuant to Section 6.5(c)(i) and (g) Cash
contributions to Pension Plans or the CBI Post Retirement Medical Plan which
were not deducted in computing Consolidated Net Income for such period in an
amount not in excess of $2,000,000 in any Fiscal Year.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Holdings and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Holdings
and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Interest Rate
Agreements, but excluding, however, any amounts referred to in Section 2.11(d)
payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net
income (or loss) of Holdings and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP, minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary
of Holdings) in which any other Person (other than Holdings or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Holdings or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Holdings or is
merged into or consolidated with Holdings or any of its Subsidiaries or that
Person's assets are acquired by Holdings or any of its Subsidiaries, (c) the
income of any Subsidiary of Holdings to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (d) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension Plan, and
(e) (to the extent not included in clauses (a) through (d) above) any non-Cash
net extraordinary gains or net extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, (i) the aggregate stated balance sheet amount of all Indebtedness
of Holdings and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, minus up to $10.0 million of Cash and Cash Equivalents on
hand at any Credit Party in excess of $2.5 million.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
period on a consolidated basis, the amount (which may be a negative number) by
which Consolidated Working Capital as of the beginning of such period exceeds
(or is less than) Consolidated Working Capital as of the end of such period.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
10
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a
Conversion/Continuation Notice substantially in the form of Exhibit A-2.
"COUNTERPART AGREEMENT" means a Counterpart Agreement
substantially in the form of Exhibit H delivered by a Credit Party pursuant to
Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if
any, the Collateral Documents, any documents or certificates executed by the
Company in favor of Issuing Bank relating to Letters of Credit, and all other
documents, instruments or agreements executed and delivered by a Credit Party
for the benefit of any Agent, Issuing Bank or any Lender in connection herewith
(in each case as such documents, instruments or agreements may be amended,
restated, supplemented or otherwise modified from time to time).
"CREDIT EXTENSION" means the making of a Loan or the issuing
of a Letter of Credit.
"CREDIT PARTY" means each Person (other than any Agent,
Issuing Bank or any Lender or any other representative thereof) from time to
time party to a Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement, each of which is for the purpose of
hedging the foreign currency risk associated with Holdings' and its
Subsidiaries' operations and not for speculative purposes.
"DBCI" means Deutsche Bank AG Cayman Islands Branch.
"DBSI" means Deutsche Bank Securities Inc.
"DEBT TENDER" means the receipt of tender and consents by the
Company of at least 66 2/3% in principal amount of the AA Notes.
"DEFAULT" means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.
11
"DEFAULT EXCESS" means, with respect to any Defaulting Lender,
the excess, if any, of such Defaulting Lender's Pro Rata Share of the aggregate
outstanding principal amount of Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Loans) over the aggregate outstanding principal amount of
all Loans of such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender,
the period commencing on the date of the applicable Funding Default and ending
on the earliest of the following dates: (i) the date on which all Commitments
are cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 2.13 or Section
2.14 or by a combination thereof) and (b) such Defaulting Lender shall have
delivered to the Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations hereunder with respect to its Commitments,
and (iii) the date on which the Company, Administrative Agent and Requisite
Lenders waive all Funding Defaults of such Defaulting Lender in writing.
"DEFAULTED LOAN" as defined in Section 2.22.
"DEFAULTING LENDER" as defined in Section 2.22.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the
laws of the United States of America, any State thereof or the District of
Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund with respect to a Lender (any two or more Related
Funds being treated as a single Eligible Assignee for all purposes hereof), and
(ii) any commercial bank, insurance company, investment or mutual fund or other
entity that is an "accredited investor" (as defined in Regulation D under the
Securities Act) and which extends credit or buys loans as one of its businesses;
provided, none of Holdings, any Affiliate of Holdings or Sponsor shall be an
Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or, within the preceding six years
was, sponsored, maintained or contributed to by, or required to be contributed
by, Holdings or any of its Subsidiaries.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional
12
or otherwise), by any Governmental Authority or any other Person, arising (i)
pursuant to or in connection with any actual or alleged violation of any
Environmental Law; (ii) in connection with any Hazardous Material or any actual
or alleged Hazardous Materials Activity; or (iii) in connection with any actual
or alleged damage, injury, threat or harm to health, safety, natural resources
or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
foreign or domestic, federal or state (or any subdivision of either of them) or
local, statutes, ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of Governmental Authorities relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity; (ii) the generation, use, storage, transportation or
disposal of, or exposure to, Hazardous Materials; or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Holdings or any of its
Subsidiaries or any Facility.
"EQUITY INVESTORS" means Sponsor and the Management Investors.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; and (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member. Any former ERISA Affiliate of Holdings or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Holdings or any such Subsidiary
within the meaning of this definition to the extent that Holdings or such
Subsidiary could reasonably be expected to have any liability with respect
thereto under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
liability to Holdings, any of its Subsidiaries or any of their respective
Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which is reasonably likely to constitute grounds under ERISA
for the termination of, or the appointment by PGBC of a trustee to administer,
any Pension Plan; (vi) the imposition of liability on Holdings, any of its
Subsidiaries or any of their respective ERISA
13
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Holdings or any of its Subsidiaries of fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under Section 409,
Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) receipt from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (x) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA
with respect to any Pension Plan.
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set
forth in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING CAPITAL LEASES" means the Capital Leases listed on
Schedule 1.1(b) entered into by American Achievement or a Subsidiary thereof as
indicated thereon prior to the date hereof in an amount not to exceed
$4,900,000.
"EXISTING INDEBTEDNESS" means all pre-existing Indebtedness of
the Company and its Subsidiaries on the Closing Date other than Indebtedness
under the Gold Consignment Agreement, the AA Notes, the CB Notes and any
outstanding Capital Leases and purchase money Indebtedness of the Company .
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or (except with
respect to Section 5 and Section 6) heretofore owned, leased or operated by
Holdings or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
14
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per
annum (expressed, as a decimal, rounded upwards, if necessary, to the next
higher 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided, (i) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate charged to Administrative Agent, in its capacity as a Lender,
on such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the certification
of the chief financial officer of the Company that such financial statements
fairly present, in all material respects, the financial condition of the Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments and in the case of interim
financial statements, the absence of footnotes.
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that such Lien
is the only Lien to which such Collateral is subject, other than any Permitted
Lien.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its
Subsidiaries ending on the last Saturday in August of each calendar year.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to
a mortgage in favor of Collateral Agent, for the benefit of the Lenders, and
located in an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a
Domestic Subsidiary.
"FUNDING DEFAULT" as defined in Section 2.22.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of
Exhibit A-1.
"GAAP" means, subject to the limitations on the application
thereof set forth in Section 1.2, United States of America generally accepted
accounting principles in effect as of the date of determination thereof.
"GE CAPITAL" as defined in the preamble hereto.
15
"GOLD CONSIGNMENT AGREEMENT" means the agreement, dated as of
March 25, 2004, between Commemorative Brands, Inc. and The Bank of Nova Scotia
as amended, waived, modified, supplemented, renewed or replaced, from time to
time in accordance with Section 6.16(b) whether with The Bank of Nova Scotia or
one or more financial institutions and whether in one agreement or one or more
agreements.
GOLD CONSIGNMENT INTERCREDITOR AGREEMENT" means the agreement,
dated as of March 25, 2004, between the Administrative Agent, Commemorative
Brands, Inc., the Borrower and the Guarantor Subsidiaries and The Bank of Nova
Scotia as amended, waived, modified, supplemented, renewed or replaced, from
time to time in accordance with Section 6.16(b) whether with The Bank of Nova
Scotia or one or more financial institutions and whether in one agreement or one
or more agreements.
"GOVERNMENTAL ACTS" means any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GSCP" means Goldman Sachs Credit Partners L.P.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each of Holdings and each Domestic
Subsidiary of Holdings (other than the Company).
"GUARANTOR SUBSIDIARY" means each Guarantor other than
Holdings.
"GUARANTY" means the guaranty of each Guarantor set forth in
Section 7.
"HAZARDOUS MATERIALS" means any chemical, material, waste or
substance, which is prohibited, limited or regulated by any Governmental
Authority or pursuant to any Environmental Law or which may or could pose a
hazard to the health and safety of any Persons or to the indoor or outdoor
environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
future, proposed or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession, storage,
holding, presence, existence, location, Release, threatened
16
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, disposal, disposition
or handling of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement entered into with a Lender Counterparty in order to satisfy
the requirements of this Agreement or otherwise in the ordinary course of
Holdings' or any of its Subsidiaries' businesses.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate,
if any, that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing
Date, (i) the audited financial statements of the Company and its Subsidiaries,
for the immediately preceding three (3) Fiscal Years, consisting of balance
sheets and the related consolidated statements of income, stockholders' equity
and cash flows for such Fiscal Years, and (ii) the unaudited financial
statements of the Company and its Subsidiaries as at the most recently ended
Fiscal Quarter, consisting of a balance sheet and the related consolidated
statements of income, stockholders' equity and cash flows for the three-, six-or
nine-month period, as applicable, ending on such date, and, in the case of
clauses (i) and (ii), certified by the chief financial officer of the Company
that they fairly present, in all material respects, the financial condition of
the Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments and in the case of
interim financial statements, the absence of footnotes.
"HOLDINGS" as defined in the preamble hereto.
"IMMATERIAL SUBSIDIARY" means, as of any date, any Subsidiary
whose total assets, as of that date, are less than $100,000 and whose total
revenues for the most recent twelve-month period do not exceed $100,000.
"INCREASED AMOUNT DATE" as defined in Section 2.24.
"INCREASED-COST LENDERS" as defined in Section 2.23.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money; (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof (other
than trade payables which are due more than six months from
17
the date of incurrence in the ordinary course of business) or (b) evidenced by a
note or similar written instrument; (v) all indebtedness secured by any Lien on
any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (vi) the face amount of any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (vii) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another; (viii) any obligation of such
Person the primary purpose or intent of which is to provide assurance to an
obligee that the obligation of the obligor thereof will be paid or discharged,
or any agreement relating thereto will be complied with, or the holders thereof
will be protected (in whole or in part) against loss in respect thereof; (ix)
any liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (b) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (a) or (b) of this
clause (ix), the primary purpose or intent thereof is as described in clause
(viii) above; and (x) all obligations of such Person in respect of any exchange
traded or over the counter derivative transaction, including, without
limitation, any Interest Rate Agreement, Currency Agreement and any commodities
hedging agreement, whether entered into for hedging or speculative purposes;
provided, in no event shall obligations under any Interest Rate Agreement, any
Currency Agreement and any commodities hedging agreement be deemed
"Indebtedness" for any purpose under Section 6.8.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including the
reasonable costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or abate any past, present or future Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any reasonable fees
or expenses incurred by Indemnitees in enforcing the indemnity contained in
Section 10.3), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Credit Documents
or the transactions contemplated hereby or thereby (including the Lenders'
agreement to make Credit Extensions or the use or intended use of the proceeds
thereof, or any enforcement of any of the Credit Documents (including any sale
of, collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the statements contained in the commitment
letter delivered by any Lender to Holdings with respect to the transactions
contemplated by this Agreement; or (iii) any Environmental Claim or any
18
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past, present or future activity, operation, land ownership, or
practice of Holdings or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INSTALLMENT" as defined in Section 2.12(a).
"INSTALLMENT DATE" as defined in Section 2.12(a).
"INTEREST COVERAGE RATIO" means the ratio as of the last day
of any Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal
Quarter period then ended, to (ii) Consolidated Cash Interest Expense for such
four-Fiscal Quarter period.
"INTEREST PAYMENT DATE" means with respect to (i) any Base
Rate Loan, each of the dates specified in Section 2.12(a) for payment of
principal, commencing on the first such date to occur after the Closing Date and
the final maturity date of such Loan; and (ii) any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan; provided, in the case
of each Interest Period of longer than three months "Interest Payment Date"
shall also include each date that is three months, or an integral multiple
thereof, after the commencement of such Interest Period.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate
Loan, an interest period of one-, two-, three- or six-months (or nine- or
twelve-months if available to all Term Lenders having Revolving Exposure of Term
Loan Commitments, as applicable), as selected by the Company in the applicable
Funding Notice or Conversion/Continuation Notice, (i) initially, commencing on
the Credit Date or Conversion/Continuation Date thereof, as the case may be; and
(ii) thereafter, commencing on the day on which the immediately preceding
Interest Period expires; provided, (a) if an Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day unless no further Business Day occurs in such
month, in which case such Interest Period shall expire on the immediately
preceding Business Day; (b) 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, subject to clauses (c) and (d), of this definition, end on the last
Business Day of a calendar month; (c) no Interest Period with respect to any
portion of any Class of Term Loans shall extend beyond such Class's Term Loan
Maturity Date; and (d) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Revolving Commitment Termination Date.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement, each of which
is for the purpose of hedging the interest rate exposure associated with
Holdings' and its Subsidiaries' operations and not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the date that is two Business Days prior to the first day of
such Interest Period.
19
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Holdings from any Person
(other than Holdings or any Guarantor Subsidiary), of any Capital Stock of such
Person; and (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Holdings or any of its Subsidiaries to any other Person (other than Holdings
or any Guarantor Subsidiary), including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
to that other Person in the ordinary course of business but excluding accounts
receivable that are not so included. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.
"ISSUANCE NOTICE" means an Issuance Notice in the form of
Exhibit A-3.
"ISSUING BANK" means DBCI or any of its Affiliates as Issuing
Bank hereunder, together with its permitted successors and assigns in such
capacity.
"JOINDER AGREEMENT" means an agreement substantially in the
form of Exhibit M.
"JOINT LEAD ARRANGER" as defined in the preamble hereto.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided, in no event shall any corporate Subsidiary of any Person be considered
to be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, pursuant to which, among other things, the
landlord consents to the granting of a Mortgage on such Leasehold Property by
the Credit Party tenant, such Landlord Consent and Estoppel to be in form and
substance acceptable to Collateral Agent in its reasonable discretion, but in
any event sufficient for Collateral Agent to obtain a Title Policy with respect
to such Mortgage.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means
a Landlord Waiver and Consent Agreement substantially in the form of Exhibit K
with such amendments or modifications as may be approved by Collateral Agent.
"LEASEHOLD PROPERTY" means any leasehold interest of any
Credit Party as lessee under any lease of real property, other than any such
leasehold interest designated from time to time by Collateral Agent in its
reasonable discretion as not being required to be included in the Collateral.
20
"LENDER" means each financial institution listed on the
signature pages hereto as a Lender, and any other Person that becomes a party
hereto pursuant to an Assignment Agreement or a Joinder Agreement.
"LENDER COUNTERPARTY" means each Lender or any Affiliate of a
Lender counterparty to a Hedge Agreement (including any Person who is a Lender
(and any Affiliate thereof) as of the Closing Date but subsequently, whether
before or after entering into a Hedge Agreement, ceases to be a Lender)
including, without limitation, each such Affiliate that enters into a joinder
agreement with Collateral Agent.
"LETTER OF CREDIT" means a commercial or standby letter of
credit issued or to be issued by Issuing Bank pursuant to this Agreement.
"LETTER OF CREDIT SUBLIMIT" means the lesser of (i)
$15,000,000 and (ii) the aggregate unused amount of the Revolving Commitments
then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is, or at any
time thereafter may become, available for drawing under all Letters of Credit
then outstanding, and (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of
the Company.
"LEVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter or other date of determination of (i) Consolidated Total Debt as
of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period ending on such date (or if such date of determination is not the last day
of a Fiscal Quarter, for the four-Fiscal Quarter period ending as of the most
recently concluded Fiscal Quarter); provided, however, for purposes of
determining Consolidated Total Debt for use in computing the Leverage Ratio at
the end of any Fiscal Quarter or other date of determination, the average daily
balance of any revolving credit facility during the four-Fiscal Quarter period
referred to in clause (ii) above shall be substituted for the balance of such
facility outstanding on the last day of such Fiscal Quarter or other date of
determination; provided that with respect to any calculation period ending prior
to the first anniversary of the Closing Date, the foregoing shall be subject to
adjustment as set forth in Schedule 1.1(a).
"LIEN" means (i) any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing and
(ii) in the case of Securities, any purchase option, call or similar right of a
third party with respect to such Securities.
"LOAN" means a Tranche B Term Loan, a Revolving Loan, a Swing
Line Loan, a New Term Loan and a New Revolving Loan.
21
"MANAGEMENT AGREEMENT" means the Management Advisory Agreement
as in effect on the Closing Date by and among Holdings, American Achievement and
Fenway Partners, Inc., as amended, waived and modified from time to time in
accordance with Section 6.15.
"MANAGEMENT FEES" means (i) the annual management fees payable
by Holdings pursuant to the Management Agreement, plus (ii) any other fees
payable by Company in connection with other transactions pursuant to the
Management Agreement; provided, that solely for purposes of calculations made
pursuant to clause (g) of the definition of Consolidated Adjusted EBITDA and
clause (e) of the definition of Consolidated Excess Cash Flow, such other
transaction fees referred to in sub-clause (ii) of this definition shall be
disregarded; provided that the fees described in sub-clauses (i) and (ii) hereof
are expressly subordinated to the Obligations pursuant to the terms of a
management subordination agreement in form and substance reasonably satisfactory
to the Administrative Agent.
"MANAGEMENT INVESTORS" means the management officers and
employees of Holdings and its Subsidiaries who are investors in Holdings on the
Closing Date.
"MARGIN STOCK" as defined in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
and/or material adverse developments with respect to (i) the business
operations, properties, assets, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole; (ii) the impairment (other
than as a result of circumstances covered by clause (i) above) of the ability of
any Credit Party to fully and timely perform its Obligations; (iii) the
legality, validity, binding effect or enforceability against a Credit Party of a
Credit Document to which it is a party; or (iv) the rights and remedies
available to, or conferred upon, any Agent and any Lender or any Secured Party
under any Credit Document.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Holdings or any of its Subsidiaries is a party (other than the Credit
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i) (a) any fee-owned Real
Estate Asset having a fair market value in excess of $1,000,000 as of the date
of the acquisition thereof and (b) all Leasehold Properties other than those
with respect to which the aggregate payments under the term of the lease are
less than $50,000 per month, but in any event, including Leasehold Properties
that are subject to a sale and leaseback permitted under Section 6.11 or (ii)
any Real Estate Asset that the Requisite Lenders have determined is material to
the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Holdings or any Subsidiary thereof, including the Company.
22
"MERGER" means the merger of AAC with and into American
Achievement which shall occur on the Closing Date and pursuant to which,
American Achievement shall be the surviving corporation and shall assume all
obligations of AAC.
"MERGER AGREEMENT" means the agreement and plan of merger
among Holdings, AAC, the Sellers and the other parties thereto, dated as of
December 24, 2004.
"ML CAPITAL" as defined in the preamble hereto.
"MOODY'S" means Moody's Investor Services, Inc.
"MORTGAGE" means a Mortgage or Deed of Trust substantially in
the form of Exhibit J, as it may be amended, supplemented or otherwise modified
from time to time.
"MULTIEMPLOYER PLAN" means any "multiemployer plan" as defined
in Section 3(37) of ERISA with respect to which Holdings, any Subsidiary or any
ERISA Affiliate has, or would reasonably be expected to have, any liability
(whether absolute or contingent).
"NAIC" means The National Association of Insurance
Commissioners, and any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial
statements for which such narrative report is required, a narrative report
describing the operations of the Company and its Subsidiaries in the form
prepared for presentation to senior management thereof for the applicable Fiscal
Quarter or Fiscal Year and for the period from the beginning of the then current
Fiscal Year to the end of such period to which such financial statements relate.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, an amount equal to: (i) Cash payments (including any Cash received by way
of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by Holdings or any of its
Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs or
expenses incurred in connection with such Asset Sale and payable to a Person
that is not Holdings or its Subsidiaries, including without limitation, (a)
income or gains taxes payable by the seller as a result of any gain recognized
in connection with such Asset Sale, (b) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness
permitted to be incurred under Section 6.1 (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Asset Sale and (c) a
reasonable reserve for any indemnification payments (fixed or contingent)
attributable to seller's indemnities and representations and warranties to
purchaser in respect of such Asset Sale undertaken by Holdings or any of its
Subsidiaries in connection with such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal
to: (i) any Cash payments or proceeds received by Holdings or any of its
Subsidiaries (a) under any casualty insurance policy in respect of a covered
loss thereunder or (b) as a result of the taking of any assets of Holdings or
any of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with
23
such power under threat of such a taking, minus (ii) (a) any actual and
reasonable costs incurred by Holdings or any of its Subsidiaries in connection
with the adjustment or settlement of any claims of Holdings or such Subsidiary
in respect thereof and payable to a Person that is not Holdings or its
Subsidiaries, and (b) any bona fide direct costs incurred in connection with any
sale of such assets as referred to in clause (i)(b) of this definition,
including income taxes payable as a result of any gain recognized in connection
therewith.
"NEW REVOLVING COMMITMENTS" as defined in Section 2.24.
"NEW REVOLVING LENDER" as defined in Section 2.24.
"NEW REVOLVING LOAN EXPOSURE" means, with respect to any
Lender, as of any date of determination, the outstanding principal amount of the
New Revolving Loans of such Lender.
"NEW REVOLVING LOANS" as defined in Section 2.24.
"NEW REVOLVING LOAN MATURITY DATE" means the date that New
Revolving Loans of a Series shall become due and payable in full hereunder, as
specified in the applicable Joinder Agreement, including by acceleration or
otherwise.
"NEW TERM LOAN COMMITMENTS" as defined in Section 2.24.
"NEW TERM LOAN EXPOSURE" means, with respect to any Lender, as
of any date of determination, the outstanding principal amount of the New Term
Loans of such Lender.
"NEW TERM LOAN LENDER" as defined in Section 2.24.
"NEW TERM LOAN MATURITY DATE" means the date that New Term
Loans of a Series shall become due and payable in full hereunder, as specified
in the applicable Joinder Agreement, including by acceleration or otherwise.
"NEW TERM LOANS" as defined in Section 2.24.
"NON-US LENDER" as defined in Section 2.20(c).
"NOTE" means a Tranche B Term Note, a Revolving Loan Note or a
Swing Line Note.
"NOTICE" means a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
"OBLIGATIONS" means all obligations of every nature of each
Credit Party from time to time owed to the Agents (including former Agents), the
Lenders or any of them and Lender Counterparties, under any Credit Document or
Hedge Agreement (including, without limitation, with respect to a Hedge
Agreement, obligations owed thereunder to any person who was a Lender or an
Affiliate of a Lender at the time such Hedge Agreement was entered into),
24
whether for principal, interest (including interest which, but for the filing of
a petition in bankruptcy with respect to such Credit Party, would have accrued
on any Obligation, whether or not a claim is allowed against such Credit Party
for such interest in the related bankruptcy proceeding), reimbursement of
amounts drawn under Letters of Credit, payments for early termination of Hedge
Agreements, fees, expenses, indemnification (including, without limitation,
pursuant to Section 10.3 hereof) or otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any employee benefit plan within the
meaning of Section 3(3) of ERISA, other than a Multiemployer Plan, which is
subject to Title IV of ERISA, and with respect to which Holdings, any Subsidiary
or any ERISA Affiliate has, or would reasonably be expected to have, any
liability (whether absolute or contingent).
"PERMITTED ACQUISITION" means any acquisition by the Company
or any of its wholly-owned Subsidiaries, whether by purchase, merger or
otherwise, of all or substantially all of the assets of, all of the Capital
Stock of, or a business line or unit or a division of, any Person; provided,
(i) immediately prior to, and after giving
effect thereto, no Default or Event of Default shall have occurred and
be continuing or would result therefrom;
(ii) all transactions in connection therewith
shall be consummated, in all material respects, in accordance with all
applicable laws and in conformity with all applicable Governmental
Authorizations;
(iii) in the case of the acquisition of Capital
Stock, all of the Capital Stock (except for any such Securities in the
nature of directors' qualifying shares required pursuant to applicable
law) acquired or otherwise issued by such Person or any newly formed
Subsidiary of the Company in connection with such acquisition shall be
owned 100% by the Company or a Guarantor Subsidiary thereof, and the
Company shall have
25
taken, or caused to be taken, as of the date such Person becomes a
Subsidiary of the Company, each of the actions set forth in Sections
5.10 and/or 5.11, as applicable;
(iv) the Company and its Subsidiaries shall be in
compliance with the financial covenants set forth in Section 6.8 on a
pro forma basis after giving effect to such acquisition as of the last
day of the Fiscal Quarter most recently ended, (as determined in
accordance with Section 6.8(d));
(v) the Company shall have delivered to
Administrative Agent (A) at least ten (10) Business Days prior to such
proposed acquisition, a Compliance Certificate evidencing compliance
with Section 6.8 as required under clause (iv) above, together with all
relevant financial information with respect to such acquired assets,
including, without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate
compliance with Section 6.8; and
(vi) any Person or assets or division as acquired
in accordance herewith shall be in the same business or lines of
business in which the Company and/or its Subsidiaries are permitted to
engage in under Section 6.13.
"PERMITTED LIENS" means each of the Liens permitted pursuant
to Section 6.2.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PHASE I REPORT" means, with respect to any Facility, a report
that (i) conforms to the ASTM Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process, E 1527-00, (ii) was
conducted no more than six months prior to the date such report is required to
be delivered hereunder, by one or more environmental consulting firms reasonably
satisfactory to Administrative Agent, (iii) includes an assessment of
asbestos-containing materials at such Facility, (iv) is accompanied by (a) an
estimate of the reasonable worst-case cost of investigating and remediating any
Hazardous Materials Activity identified in the Phase I Report as giving rise to
an actual or potential material violation of any Environmental Law or as
presenting a material risk of giving rise to a material Environmental Claim, and
(b) a current compliance audit setting forth an assessment of Holdings', its
Subsidiaries' and such Facility's current and past compliance with Environmental
Laws and an estimate of the cost of rectifying any non-compliance with current
Environmental Laws identified therein and the cost of compliance with reasonably
anticipated pending or future Environmental Laws identified therein. All Phase I
Reports shall expressly specify that the report may be relied on by
Administrative Agent or the Administrative Agent shall have received a reliance
letter so stating.
26
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement to be executed by the Company and each Guarantor substantially in the
form of Exhibit I, as it may be amended, supplemented or otherwise modified from
time to time.
"PRIME RATE" means the rate of interest quoted in The Wall
Street Journal, Money Rates Section as the Prime Rate (currently defined as the
base rate on corporate loans posted by at least 75% of the nation's thirty (30)
largest banks), as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Agent or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"PRINCIPAL OFFICE" means, for each of Administrative Agent,
Swing Line Lender and Issuing Bank, such Person's "Principal Office" as set
forth on Appendix B, or such other office as such Person may from time to time
designate in writing to the Company, Administrative Agent and each Lender.
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan of any
Lender, the percentage obtained by dividing (a) the Tranche B Term Loan Exposure
of that Lender by (b) the aggregate Tranche B Term Loan Exposure of all Lenders;
(ii) with respect to all payments, computations and other matters relating to
the Revolving Commitment or Revolving Loans of any Lender or any Letters of
Credit issued or participations purchased therein by any Lender or any
participations in any Swing Line Loans purchased by any Lender, the percentage
obtained by dividing (a) the Revolving Exposure of that Lender by (b) the
aggregate Revolving Exposure of all Lenders; and (iv) with respect to all
payments, computations, and other matters relating to New Term Loan Commitments
or New Term Loans of a particular Series, the percentage obtained by dividing
(a) the New Term Loan Exposure of that Lender with respect to that Series by (b)
the aggregate New Term Loan Exposure of all Lenders with respect to that Series.
For all other purposes with respect to each Lender, "Pro Rata Share" means the
percentage obtained by dividing (A) an amount equal to the sum of the Tranche B
Term Loan Exposure, the Revolving Exposure and the New Term Loan Exposure of
that Lender, by (B) an amount equal to the sum of the aggregate Tranche B Term
Loan Exposure, the aggregate Revolving Exposure and the aggregate New Term Loan
Exposure of all Lenders.
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee or leasehold) then owned by any Credit Party in any real property.
"RECORD DOCUMENT" means, with respect to any Leasehold
Property, (i) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (ii) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to Collateral Agent.
27
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document has been recorded in all places necessary or
desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property.
"REDEMPTIONS" means the redemption or repurchase of the Series
A Preferred Stock of American Achievement and the Series A Preferred Stock of
Commemorative Brands, Inc.
"REFINANCING NOTE INDENTURE" means the trust indenture in form
and substance reasonably satisfactory to the Administrative Agent pursuant to
which any Refinancing Notes may be issued in accordance with the terms of this
Agreement, as such indenture may be further amended, restated, supplemented,
modified, extended, renewed or replaced from time to time in accordance with
Section 6.16 of this Agreement.
"REFINANCING NOTES" as defined in Section 6.1(o).
"REFUNDED SWING LINE LOANS" as defined in Section 2.3(b)(iv).
"REGISTER" as defined in Section 2.7(b).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" as defined in Section 2.4(d).
"RELATED AGREEMENTS" means, collectively, Gold Consignment
Agreement, the Gold Consignment Intercreditor Agreement, the Merger Agreement,
the Management Agreement, the Stockholders Agreement and the documents governing
the Senior Subordinated Notes, the Refinancing Notes, and the Existing Capital
Leases.
"RELATED FUND" means any investment fund that is (i) engaged
in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit and (ii) is administered and managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any Hazardous Material into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Material),
including the movement of any Hazardous Material through the air, soil, surface
water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.23.
"REQUISITE CLASS LENDERS" means, at any time of determination,
(i) for the Class of Lenders having Tranche B Term Loan Exposure, Lenders
holding more than 50% of the
28
aggregate Tranche B Term Loan Exposure of all Lenders; (ii) for the Class of
Lenders having Revolving Exposure, Lenders holding more than 50% of the
aggregate Revolving Exposure of all Lenders, and (iii) for each Class of Lenders
having New Term Loan Exposure, Lenders holding more than 50% of the aggregate
New Term Loan Exposure of that Class.
"REQUISITE LENDERS" means one or more Lenders having or
holding Tranche B Term Loan Exposure, New Term Loan Exposure and/or Revolving
Exposure and representing more than 50% of the sum of (i) the aggregate Tranche
B Term Loan Exposure of all Lenders, (ii) the aggregate Revolving Exposure of
all Lenders, and (iii) the aggregate New Term Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Holdings or the Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that class;
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of Holdings or the Company now or hereafter outstanding; (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of stock of Holdings or the
Company now or hereafter outstanding; (iv) management or similar fees payable to
Sponsor or any of its Affiliates and (v) any payment or prepayment of principal
of, premium, if any, or interest on, or redemption, purchase, repurchase,
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment (or any offer to do any of the foregoing) with respect
to, the Senior Subordinated Notes or the Refinancing Notes.
"REVOLVING COMMITMENT" means the commitment of a Lender to
make or otherwise fund any Revolving Loan and to acquire participations in
Letters of Credit and Swingline Loans hereunder and "REVOLVING COMMITMENTS"
means such commitments of all Lenders in the aggregate. The amount of each
Lender's Revolving Commitment, if any, is set forth on Appendix A-2 or in the
applicable Assignment Agreement, Joinder Agreement, subject to any adjustment or
reduction pursuant to the terms and conditions hereof. The aggregate amount of
the Revolving Commitments as of the Closing Date is $40,000,000.
"REVOLVING COMMITMENT PERIOD" means the period from the
Closing Date to but excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to
occur of (i) April 2, 2004, if the Term Loans are not made on or before that
date; (ii) the sixth (6) anniversary of the Closing Date, (iii) the date the
Revolving Commitments are permanently reduced to zero pursuant to Section
2.13(b) or 2.14, and (iv) the date of the termination of the Revolving
Commitments pursuant to Section 8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of
any date of determination, (i) prior to the termination of the Revolving
Commitments, that Lender's Revolving Commitment; and (ii) after the termination
of the Revolving Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender, (b) in the case of Issuing Bank,
the aggregate Letter of Credit Usage in respect of all Letters of Credit
29
issued by that Lender (net of any participations by Lenders in such Letters of
Credit), (c) the aggregate amount of all participations by that Lender in any
outstanding Letters of Credit or any unreimbursed drawing under any Letter of
Credit, (d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any participations therein by
other Lenders), and (e) the aggregate amount of all participations therein by
that Lender in any outstanding Swing Line Loans.
"REVOLVING LOAN" means a Loan made by a Lender to the Company
pursuant to Section 2.2(a) and/or 2.22.
"REVOLVING LOAN NOTE" means a promissory note in the form of
Exhibit B-2, as it may be amended, supplemented or otherwise modified from time
to time.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SECURED PARTIES" has the meaning assigned to that term in the
Pledge and Security Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SELLERS" means Castle Harlan Partners III, L.P., Castle
Harlan Partners II, L.P. and the other stockholders of American Achievement set
forth on Schedule I to the Merger Agreement.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated
as of the date hereof pursuant to which Company has issued its Senior
Subordinated Notes due 2012, as such indenture may be further amended, restated,
supplemented, modified, extended, renewed or replaced from time to time in
accordance with Section 6.16 of this Agreement.
"SENIOR SUBORDINATED NOTES" means Company's unsecured Senior
Subordinated Notes due April 1, 2012, dated the date hereof, and any registered
senior subordinated notes having substantially identical terms and issued
pursuant to the Senior Subordinated Indenture in exchange for the initial,
unregistered Senior Subordinated Notes, together with any additional senior
subordinated notes issued under the Senior Subordinated Note Indenture after the
Closing Date and expressly permitted hereunder.
"SERIES" as defined in Section 2.24.
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"SOLVENCY CERTIFICATE" means a Solvency Certificate of the
chief financial officer of Holdings substantially in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of
the date of determination, both (i) (a) the sum of such Credit Party's debt
(including contingent liabilities) does not exceed the present fair saleable
value of such Credit Party's present assets; (b) such Credit Party's capital is
not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).
"SPONSOR" means Fenway Partners, Inc. and its Affiliates.
"SPONSOR EQUITY" means the Capital Stock of Holdings purchased
by the Sponsor on or prior to the Closing Date in an aggregate Cash amount equal
to not less than $96,000,000.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, to
be entered into in form and substance reasonably satisfactory to the
Administrative Agent, prior to April 30, 2004, among the Company, Holdings and
certain stockholders of Holdings, as amended, waived and modified from time to
time in accordance with Section 6.15.
"SUBJECT TRANSACTION" as defined in Section 6.8(d).
"SUBORDINATED MANAGEMENT NOTES" means promissory notes,
payable in kind, of Holdings issued to certain officers and employees of the
Company in connection with a purchase or redemption of Capital Stock of Holdings
expressly permitted by Section 6.5; provided that all the terms and conditions
of such notes, including, without limitation, those relating to subordination,
shall be in form and substance reasonably satisfactory to the Administrative
Agent, as evidenced by its prior written approval thereof, it being understood
that such notes will not be satisfactory to the Administrative Agent unless they
include a provision prohibiting payments to be made thereunder if any Default or
Event of Default shall have occurred and be continuing and; provided, further,
that payments pursuant to the Subordinated Management Notes may only be made in
accordance with Section 6.5.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
31
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof; provided, in determining the percentage of ownership
interests of any Person controlled by another Person, no ownership interest in
the nature of a "qualifying share" of the former Person shall be deemed to be
outstanding.
"SWING LINE LENDER" means DBCI in its capacity as Swing Line
Lender hereunder, together with its permitted successors and assigns in such
capacity.
"SWING LINE LOAN" means a Loan made by Swing Line Lender to
the Company pursuant to Section 2.3.
"SWING LINE NOTE" means a promissory note in the form of
Exhibit B-3, as it may be amended, supplemented or otherwise modified from time
to time.
"SWING LINE SUBLIMIT" means the lesser of (i) $5,000,000, and
(ii) the aggregate unused amount of Revolving Commitments then in effect.
"SYNDICATION AGENT" as defined in the preamble hereto.
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided, "Tax on the overall net income" of a Person
shall (i) be construed as a reference to a tax imposed by the jurisdiction or
any subdivision thereof in which that Person is organized or in which that
Person's applicable principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business (a "RELEVANT TAX
JURISDICTION") on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office) and (ii)
include all franchise taxes, branch taxes, taxes on doing business or taxes on
the overall capital or net worth of any such Person (and/or in the case of a
Lender, its Principal Office), in each case imposed by any Relevant Tax
Jurisdiction in lieu of income, profits or gains taxes.
"TERM LOAN" means a Tranche B Term Loan or a New Term Loan.
"TERM LOAN COMMITMENT" means the Tranche B Term Loan
Commitment or the New Term Loan Commitment of a Lender, and "TERM LOAN
COMMITMENTS" means such commitments of all Lenders.
"TERM LOAN MATURITY DATE" means the Tranche B Term Loan
Maturity Date and the New Term Loan Maturity Date of any Series of New Term
Loans.
"TERMINATED LENDER" as defined in Section 2.23.
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"TITLE POLICY" as defined in Section 3.1(i).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any
amount drawn under any Letter of Credit, but not yet so applied), (ii) the
aggregate principal amount of all outstanding Swing Line Loans, and (iii) the
Letter of Credit Usage.
"TRANCHE B TERM LOAN" means a Tranche B Term Loan made by a
Lender to the Company pursuant to Section 2.1(a)(ii).
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a
Lender to make or otherwise fund a Tranche B Term Loan and "TRANCHE B TERM LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate. The amount
of each Lender's Tranche B Term Loan Commitment, if any, is set forth on
Appendix A-1 or in the applicable Assignment Agreement, subject to any
adjustment or reduction pursuant to the terms and conditions hereof. The
aggregate amount of the Tranche B Term Loan Commitments as of the Closing Date
is $155,000,000.
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any
Lender, as of any date of determination, the outstanding principal amount of the
Tranche B Term Loans of such Lender; provided, at any time prior to the making
of the Tranche B Term Loans, the Tranche B Term Loan Exposure of any Lender
shall be equal to such Lender's Tranche B Term Loan Commitment.
"TRANCHE B TERM LOAN MATURITY DATE" means the earlier of (i)
the seventh (7) anniversary of the Closing Date, and (ii) the date that all
Tranche B Term Loans shall become due and payable in full hereunder, whether by
acceleration or otherwise.
"TRANCHE B TERM LOAN NOTE" means a promissory note in the form
of Exhibit B-1, as it may be amended, supplemented or otherwise modified from
time to time.
"TRANSACTION COSTS" means the fees, costs and expenses payable
by Holdings, the Company or any of the Company's Subsidiaries on or before the
Closing Date in connection with the Transactions.
"TRANSACTIONS" means the Acquisition, the Contribution of the
Sponsor Equity, consummation of the Redemptions, the completion of the Debt
Tender, the assumption of the Existing Capital Leases, the repayment of the
Existing Indebtedness, the entering into of this Agreement, the issuance of the
Senior Subordinated Notes and the exchange offer in respect of the Senior
Subordinated Notes.
"TYPE OF LOAN" means (i) with respect to either Term Loans or
Revolving Loans, a Base Rate Loan or a Eurodollar Rate Loan, and (ii) with
respect to Swing Line Loans, a Base Rate Loan.
33
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNADJUSTED EURODOLLAR RATE COMPONENT" means that component of
the interest costs to the Company in respect of a Eurodollar Rate Loan that is
based upon the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate.
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein,
all accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP. Financial statements and other
information required to be delivered by Holdings to Lenders pursuant to Section
5.1(a), 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). For purposes of
determining compliance with the covenants contained in Section 6 all accounting
terms herein shall be interpreted and all accounting determinations hereunder
(in each case, unless otherwise provided for or defined herein) shall be made in
accordance with GAAP as used in the most recent of the annual financial
statements referred to in Section 4.7 and applied on a basis consistent with the
application used in the financial statements referred to in Section 4.7;
provided further, that if Company notifies the Administrative Agent that Company
wishes to amend any covenant in Section 2.14 or Section 6 or any related
definition to eliminate the effect of any change in GAAP occurring after the
date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies Company that the Required Lenders wish to amend
Section 2.14 or Section 6 or any related definition for such purpose), then (i)
Company and the Administrative Agent shall negotiate in good faith to agree upon
an appropriate amendment to such covenant and (ii) Company's compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective until such covenant is
amended in a manner satisfactory to Company and the Requisite Lenders. For the
purposes of determining compliance under Sections 6.1, 6.2, 6.6, 6.7 and 6.8
with respect to any amount in a currency other than Dollars, such amount shall
be deemed to equal the Dollar equivalent thereof at the time such amount was
incurred or expended, as the case may be.
1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference. References herein to any Section, Appendix, Schedule or
Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the
case may be, hereof unless otherwise specifically provided. The use herein of
the word "include" or "including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not no limiting language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1. TERM LOANS.
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(a) Loan Commitments. Subject to the terms and conditions
hereof, each Lender severally agrees to make, on the Closing Date, a Tranche B
Term Loan to the Company in an amount equal to such Lender's Tranche B Term Loan
Commitment. The Company may make only one borrowing under the Tranche B Term
Loan Commitments which shall be on the Closing Date. Any amount borrowed under
this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed.
Subject to Sections 2.13(a) and 2.14, all amounts owed hereunder with respect to
the Tranche B Term Loans shall be paid in full no later than the Tranche B Term
Loan Maturity Date. Each Lender's Tranche B Term Loan Commitment shall terminate
immediately and without further action on the Closing Date after giving effect
to the funding of such Lender's Tranche B Term Loan Commitment on such date.
(b) Borrowing Mechanics for Term Loans.
(i) The Company shall deliver to Administrative Agent
a fully executed Funding Notice no later than one (1) day prior to the
Closing Date. Promptly upon receipt by Administrative Agent of such
Certificate, Administrative Agent shall notify each Lender of the
proposed borrowing.
(ii) Each Lender shall make its Tranche B Term Loan,
as the case may be, available to Administrative Agent not later than
12:00 p.m. (New York City time) on the Closing Date, by wire transfer
of same day funds in Dollars, at Administrative Agent's Principal
Office. Upon satisfaction or waiver of the conditions precedent
specified herein, Administrative Agent shall make the proceeds of the
Term Loans available to the Company on the Closing Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such
Loans received by Administrative Agent from Lenders to be credited to
the account of the Company at Administrative Agent's Principal Office
or to such other account as may be designated in writing to
Administrative Agent by the Company.
2.2. REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving Commitment
Period, subject to the terms and conditions hereof, each Lender severally agrees
to make Revolving Loans to the Company in an aggregate amount up to but not
exceeding such Lender's Revolving Commitment; provided, that after giving effect
to the making of any Revolving Loans in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.2(a) may be repaid and reborrowed during the
Revolving Commitment Period. Each Lender's Revolving Commitment shall expire on
the Revolving Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to 2.3(b)(iv) and 2.4(d),
Revolving Loans that are Base Rate Loans shall be made in an aggregate
minimum amount of $1,000,000 and
35
integral multiples of $500,000 in excess of that amount, and Revolving
Loans that are Eurodollar Rate Loans shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of
that amount.
(ii) Whenever the Company desires that Lenders make
Revolving Loans, the Company shall deliver to Administrative Agent a
fully executed and delivered Funding Notice no later than 11:00 a.m.
(New York City time) at least three Business Days in advance of the
proposed Credit Date in the case of a Eurodollar Rate Loan, and at
least one Business Day in advance of the proposed Credit Date in the
case of a Revolving Loan that is a Base Rate Loan. Except as otherwise
provided herein, a Funding Notice for a Revolving Loan that is a
Eurodollar Rate Loan shall be irrevocable on and after the related
Interest Rate Determination Date, and the Company shall be bound to
make a borrowing in accordance therewith.
(iii) Notice of receipt of each Funding Notice in
respect of Revolving Loans, together with the amount of each Lender's
Pro Rata Share thereof, if any, together with the election of the
applicable interest rate, shall be provided by Administrative Agent to
each applicable Lender by telefacsimile with reasonable promptness, but
(provided Administrative Agent shall have received such notice by 11:00
a.m. (New York City time)) not later than 2:00 p.m. (New York City
time) on the same day as Administrative Agent's receipt of such Notice
from the Company.
(iv) Each Lender shall make the amount of its
Revolving Loan available to Administrative Agent not later than 12:00
p.m. (New York City time) on the applicable Credit Date by wire
transfer of same day funds in Dollars, at Administrative Agent's
Principal Office. Except as provided herein, upon satisfaction or
waiver of the conditions precedent specified herein, Administrative
Agent shall make the proceeds of such Revolving Loans available to the
Company on the applicable Credit Date by causing an amount of same day
funds in Dollars equal to the proceeds of all such Revolving Loans
received by Administrative Agent from Lenders to be credited to the
account of the Company at Administrative Agent's Principal Office or
such other account as may be designated in writing to Administrative
Agent by the Company.
2.3. SWING LINE LOANS.
(a) Swing Line Loans Commitments. During the Revolving
Commitment Period, subject to the terms and conditions hereof, Swing Line Lender
hereby agrees to make Swing Line Loans to the Company in the aggregate amount up
to but not exceeding the Swing Line Sublimit; provided, that after giving effect
to the making of any Swing Line Loan, in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.3 may be repaid and reborrowed during the
Revolving Commitment Period. Swing Line Lender's Revolving Commitment shall
expire on the Revolving Commitment Termination Date and all Swing Line Loans and
all other amounts owed hereunder with respect to the Swing Line Loans and the
Revolving Commitments shall be paid in full no later than such date.
36
(b) Borrowing Mechanics for Swing Line Loans.
(i) Swing Line Loans shall be made in an aggregate
minimum amount of $250,000 and integral multiples of $100,000 in excess
of that amount.
(ii) Whenever the Company desires that Swing Line
Lender make a Swing Line Loan, the Company shall deliver to
Administrative Agent a Funding Notice no later than 12:00 p.m. (New
York City time) on the proposed Credit Date.
(iii) Swing Line Lender shall make the amount of its
Swing Line Loan available to Administrative Agent not later than 2:00
p.m. (New York City time) on the applicable Credit Date by wire
transfer of same day funds in Dollars, at Administrative Agent's
Principal Office. Except as provided herein, upon satisfaction or
waiver of the conditions precedent specified herein, Administrative
Agent shall make the proceeds of such Swing Line Loans available to the
Company on the applicable Credit Date by causing an amount of same day
funds in Dollars equal to the proceeds of all such Swing Line Loans
received by Administrative Agent from Swing Line Lender to be credited
to the account of the Company at Administrative Agent's Principal
Office, or to such other account as may be designated in writing to
Administrative Agent by the Company.
(iv) With respect to any Swing Line Loans which have
not been voluntarily prepaid by the Company pursuant to Section 2.13,
Swing Line Lender may at any time in its sole and absolute discretion,
deliver to Administrative Agent (with a copy to the Company), no later
than 11:00 a.m. (New York City time) at least one Business Day in
advance of the proposed Credit Date, a notice (which shall be deemed to
be a Funding Notice given by the Company) requesting that each Lender
holding a Revolving Commitment make Revolving Loans that are Base Rate
Loans to the Company on such Credit Date in an amount equal to the
amount of such Swing Line Loans (the "REFUNDED SWING LINE LOANS")
outstanding on the date such notice is given which Swing Line Lender
requests Lenders to prepay. Promptly after receipt by Administrative
Agent of such notice, Administrative Agent shall notify each such
Lender thereof. Anything contained in this Agreement to the contrary
notwithstanding, (1) the proceeds of such Revolving Loans made by the
Lenders other than Swing Line Lender shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to the Company) and
applied to repay a corresponding portion of the Refunded Swing Line
Loans and (2) on the day such Revolving Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing
Line Lender to the Company, and such portion of the Swing Line Loans
deemed to be so paid shall no longer be outstanding as Swing Line Loans
and shall no longer be due under the Swing Line Note of Swing Line
Lender but shall instead constitute part of Swing Line Lender's
outstanding Revolving Loans to the Company and shall be due under the
Revolving Loan Note issued by the Company to Swing Line Lender. The
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge the Company's accounts with Administrative Agent and Swing Line
Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line
Loans to the extent of
37
the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loans deemed to be made by Swing Line Lender, are not
sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line
Lender should be recovered by or on behalf of the Company from Swing
Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably
shared among all Lenders in the manner contemplated by Section 2.17.
(v) If for any reason Revolving Loans are not made
pursuant to Section 2.3(b)(iv) in an amount sufficient to repay any
amounts owed to Swing Line Lender in respect of any outstanding Swing
Line Loans on or before the third Business Day after demand for payment
thereof by Swing Line Lender, each Lender holding a Revolving
Commitment shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans, and in an amount
equal to its Pro Rata Share of the applicable unpaid amount together
with accrued interest thereon. Upon one Business Day's notice from
Swing Line Lender, each Lender holding a Revolving Commitment shall
deliver to Swing Line Lender an amount equal to its respective
participation in the applicable unpaid amount in same day funds at the
Principal Office of Swing Line Lender. In order to evidence such
participation each Lender holding a Revolving Commitment agrees to
enter into a participation agreement at the request of Swing Line
Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Lender holding a Revolving Commitment fails to
make available to Swing Line Lender the amount of such Lender's
participation as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Lender together
with interest thereon for three Business Days at the rate customarily
used by Swing Line Lender for the correction of errors among banks and
thereafter at the Base Rate, as applicable.
(vi) Notwithstanding anything contained herein to the
contrary, (1) each Lender's obligation to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the
second preceding paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional and
shall not be affected by any circumstance, including without limitation
(A) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against Swing Line Lender, any Credit Party or any
other Person for any reason whatsoever; (B) the occurrence or
continuation of a Default or Event of Default; (C) any adverse change
in the business, operations, properties, assets, condition (financial
or otherwise) or prospects of any Credit Party; (D) any breach of this
Agreement or any other Credit Document by any party thereto; or (E) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that such obligations of each
Lender are subject to the condition that Swing Line Lender believed in
good faith that all conditions under Section 3.2 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans,
were satisfied at the time such Refunded Swing Line Loans or unpaid
Swing Line Loans were made, or the satisfaction of any such condition
not satisfied had been waived by the Requisite Lenders prior to or at
the time such Refunded
38
Swing Line Loans or other unpaid Swing Line Loans were made; and (2) Swing
Line Lender shall not be obligated to make any Swing Line Loans (A) if it
has elected not to do so after the occurrence and during the continuation
of a Default or Event of Default or (B) at a time when a Funding Default
exists unless Swing Line Lender has entered into arrangements reasonably
satisfactory to it and the Company to eliminate Swing Line Lender's risk
with respect to the Defaulting Lender's participation in such Swing Line
Loan, including by cash collateralizing such Defaulting Lender's Pro Rata
Share of the outstanding Swing Line Loans.
2.4. ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS
THEREIN.
(a) Letters of Credit. During the period from the Closing Date
until the thirtieth (30th) day before the end of the Revolving Commitment
Period, subject to the terms and conditions hereof, Issuing Bank agrees to issue
Letters of Credit for the account of the Company in the aggregate amount up to
but not exceeding the Letter of Credit Sublimit; provided, (i) each Letter of
Credit shall be denominated in Dollars; (ii) the stated amount of each Letter of
Credit shall not be less than $50,000 or such lesser amount as is acceptable to
Issuing Bank; (iii) after giving effect to such issuance, in no event shall the
Total Utilization of Revolving Commitments exceed the Revolving Commitments then
in effect; (iv) after giving effect to such issuance, in no event shall the
Letter of Credit Usage exceed the Letter of Credit Sublimit then in effect; (v)
in no event shall any standby Letter of Credit have an expiration date later
than the earlier of (1) the tenth (10th) Business Day prior to the Revolving
Commitment Termination Date and (2) the date which is one year from the date of
issuance of such standby Letter of Credit; (vi) in no event shall any commercial
Letter of Credit have an expiration date later than the earlier of (1) the
thirtieth (30th) day prior to the Revolving Loan Commitment Termination Date and
(2) the date which is 180 days from the date of issuance of such commercial
Letter of Credit, (vii) in no event shall any Letter of Credit be issued if such
Letter of Credit is otherwise unacceptable to Issuing Bank in its reasonable
discretion and (viii) all such Letters of Credit shall provide for sight
drawings. Subject to the foregoing, Issuing Bank may agree that a standby Letter
of Credit will automatically be extended for one or more successive periods not
to exceed one year each, unless Issuing Bank elects not to extend for any such
additional period; provided, Issuing Bank shall not extend any such Letter of
Credit if it has received written notice that an Event of Default has occurred
and is continuing at the time Issuing Bank must elect to allow such extension;
provided, further, in the event a Funding Default exists, Issuing Bank shall not
be required to issue any Letter of Credit unless Issuing Bank has entered into
arrangements satisfactory to it, the Administrative Agent and the Company to
eliminate Issuing Bank's risk with respect to the participation in Letters of
Credit of the Defaulting Lender, including by cash collateralizing such
Defaulting Lender's Pro Rata Share of the Letter of Credit Usage.
(b) Notice of Issuance. Whenever the Company desires the
issuance of a Letter of Credit, it shall deliver to Administrative Agent (with a
copy to the Issuing Bank) an Issuance Notice no later than 12:00 p.m. (New York
City time) at least three Business Days (in the case of standby letters of
credit) or five Business Days (in the case of commercial letters of credit), or
in each case such shorter period as may be agreed to by Issuing Bank in any
particular instance, in advance of the proposed date of issuance. Upon
satisfaction or waiver of the conditions set forth in Section 3.2, Issuing Bank
shall issue the requested Letter of Credit only in accordance with
39
Issuing Bank's standard operating procedures. Promptly after the issuance or
amendment of a standby Letter of Credit, the Issuing Bank shall notify the
Company and the Administrative Agent, in writing, of such issuance or amendment
and such notice shall be accompanied by a copy of such issuance or amendment.
Upon receipt of such notice, the Administrative Agent shall promptly notify each
Lender, in writing, of such issuance or amendment and if so requested by a
Lender, the Administrative Agent shall furnish such Lender with a copy of such
issuance or amendment. With regards to commercial Letters of Credit, the Issuing
Bank shall furnish the Administrative Agent, by facsimile, on the first Business
Day of each week with a report detailing the daily aggregate commercial Letter
of Credit outstandings for the previous week. In the event of any conflict
between the terms of a Letter of Credit or Letter of Credit application and this
Agreement, the terms of this Agreement shall govern and control.
(c) Responsibility of Issuing Bank With Respect to Requests
for Drawings and Payments. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible
only to examine the documents delivered under such Letter of Credit with
reasonable care so as to ascertain whether they appear on their face to be in
accordance with the terms and conditions of such Letter of Credit. As between
the Company and Issuing Bank, the Company assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by Issuing Bank, by the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, Issuing Bank shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit so long as such conditions are complied with
in all material respects; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of Issuing Bank,
including any Governmental Acts; none of the above shall affect or impair, or
prevent the vesting of, any of Issuing Bank's rights or powers hereunder.
Without limiting the foregoing and in furtherance thereof, any action taken or
omitted by Issuing Bank under or in connection with the Letters of Credit or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not give rise to any liability on the part of Issuing Bank to the
Company. Notwithstanding anything to the contrary contained in this Section
2.4(c), the Company shall retain any and all rights it may have against Issuing
Bank for any liability arising solely out of the gross negligence or willful
misconduct of Issuing Bank or from honoring a Letter of Credit that does not
comply in all material respects with the conditions to draw on such Letter of
Credit.
40
(d) Reimbursement by the Company of Amounts Drawn or Paid
Under Letters of Credit. In the event Issuing Bank has determined to honor a
drawing under a Letter of Credit, it shall immediately notify the Company and
Administrative Agent, and the Company shall reimburse Issuing Bank on or before
the Business Day immediately following the date on which such drawing is honored
(the "REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal
to the amount of such honored drawing; provided, anything contained herein to
the contrary notwithstanding, (i) unless the Company shall have notified
Administrative Agent and Issuing Bank prior to 10:00 a.m. (New York City time)
on the date such drawing is honored that the Company intends to reimburse
Issuing Bank for the amount of such honored drawing with funds other than the
proceeds of Revolving Loans, the Company shall be deemed to have given a timely
Funding Notice to Administrative Agent requesting Lenders having a Revolving
Commitment to make Revolving Loans that are Base Rate Loans on the Reimbursement
Date in an amount in Dollars equal to the amount of such honored drawing (and
Administrative Agent shall promptly notify each such Lender having a Revolving
Commitment of such deemed request), and (ii) subject to satisfaction or waiver
of the conditions specified in Section 3.2, Lenders shall, on the Reimbursement
Date, make Revolving Loans that are Base Rate Loans in the amount of such
honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse Issuing Bank for the amount of such honored
drawing; and provided further, if for any reason proceeds of Revolving Loans are
not received by Issuing Bank on the Reimbursement Date in an amount equal to the
amount of such honored drawing, the Company shall reimburse Issuing Bank, on
demand, in an amount in same day funds equal to the excess of the amount of such
honored drawing over the aggregate amount of such Revolving Loans, if any, which
are so received. Nothing in this Section 2.4(d) shall be deemed to relieve any
Lender having a Revolving Commitment from its obligation to make Revolving Loans
on the terms and conditions set forth herein, and the Company shall retain any
and all rights it may have against any such Lender resulting from the failure of
such Lender to make such Revolving Loans under this Section 2.4(d).
(e) Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Commitment shall be deemed to have purchased, and hereby agrees to
irrevocably purchase, from Issuing Bank a participation in such Letter of Credit
and any drawings honored thereunder in an amount equal to such Lender's Pro Rata
Share (with respect to the Revolving Commitments) of the maximum amount which is
or at any time may become available to be drawn thereunder. In the event that
the Company shall fail for any reason to reimburse Issuing Bank as provided in
Section 2.4(d), Issuing Bank shall promptly notify each Lender having a
Revolving Commitment of the unreimbursed amount of such honored drawing and of
such Lender's respective participation therein based on such Lender's Pro Rata
Share of the Revolving Commitments. Each Lender having a Revolving Commitment
shall make available to Issuing Bank an amount equal to its respective
participation, in Dollars and in same day funds, at the office of Issuing Bank
specified in such notice, not later than 12:00 p.m. (New York City time) on the
first Business Day (under the laws of the jurisdiction in which such office of
Issuing Bank is located which is also a Business Day in New York City) after the
date notified by Issuing Bank. In the event that any Lender having a Revolving
Commitment fails to make available to Issuing Bank on such business day the
amount of such Lender's participation in such Letter of Credit as provided in
this Section 2.4(e), Issuing Bank shall be entitled to recover such amount on
demand from such
41
Lender together with interest thereon for three Business Days at the rate
customarily used by Issuing Bank for the correction of errors among banks and
thereafter at the Base Rate. Nothing in this Section 2.4(e) shall be deemed to
prejudice the right of any Lender having a Revolving Commitment to recover from
Issuing Bank any amounts made available by such Lender to Issuing Bank pursuant
to this Section in the event that it is determined that the payment with respect
to a Letter of Credit in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of Issuing Bank.
In the event Issuing Bank shall have been reimbursed by other Lenders pursuant
to this Section 2.4(e) for all or any portion of any drawing honored by Issuing
Bank under a Letter of Credit, such Issuing Bank shall distribute to each Lender
which has paid all amounts payable by it under this Section 2.4(e) with respect
to such honored drawing such Lender's Pro Rata Share of all payments
subsequently received by Issuing Bank from the Company in reimbursement of such
honored drawing when such payments are received. Any such distribution shall be
made to a Lender having a Revolving Commitment at its primary address set forth
below its name on Appendix B or at such other address as such Lender may
request.
(f) Obligations Absolute. The obligation of the Company to
reimburse Issuing Bank for drawings honored under the Letters of Credit issued
by it and to repay any Revolving Loans made by Lenders pursuant to Section
2.4(d) and the obligations of Lenders under Section 2.4(e) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms hereof under all circumstances including any of the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit; (ii) the existence of any claim, set-off, defense or other right which
the Company or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such transferee
may be acting), Issuing Bank, Lender or any other Person or, in the case of a
Lender, against the Company, whether in connection herewith, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between the Company or one of its Subsidiaries and the beneficiary
for which any Letter of Credit was procured); (iii) any draft or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) payment by Issuing Bank under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit; (v) any adverse
change in the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Holdings or any of its Subsidiaries; (vi) any breach
hereof or any other Credit Document by any party thereto; (vii) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing; or (viii) the fact that an Event of Default or a Default shall have
occurred and be continuing; provided, in each case, that payment by Issuing Bank
under the applicable Letter of Credit shall not have constituted gross
negligence or willful misconduct of Issuing Bank under the circumstances in
question.
(g) Indemnification. Without duplication of any obligation of
the Company under Section 10.2 or 10.3, in addition to amounts payable as
provided herein, the Company hereby agrees to protect, indemnify, pay and save
harmless Issuing Bank from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and allocated costs of internal counsel)
which Issuing Bank may incur or be subject to as a consequence, direct or
indirect, of (i) the
42
issuance of any Letter of Credit by Issuing Bank, other than as a result of (1)
the gross negligence or willful misconduct of Issuing Bank or (2) the wrongful
dishonor by Issuing Bank of a proper demand for payment made under any Letter of
Credit issued by it, or (ii) the failure of Issuing Bank to honor a drawing
under any such Letter of Credit as a result of any Governmental Act.
2.5. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all
participations purchased, by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in such other Lender's
obligation to make a Loan requested hereunder or purchase a participation
required hereby nor shall any Term Loan Commitment or any Revolving Commitment
of any Lender be increased or decreased as a result of a default by any other
Lender in such other Lender's obligation to make a Loan requested hereunder or
purchase a participation required hereby.
(b) Availability of Funds. Unless Administrative Agent shall
have been notified by any Lender prior to the applicable Credit Date that such
Lender does not intend to make available to Administrative Agent the amount of
such Lender's Loan requested on such Credit Date, Administrative Agent may
assume that such Lender has made such amount available to Administrative Agent
on such Credit Date and Administrative Agent may, in its sole discretion, but
shall not be obligated to, make available to the Company a corresponding amount
on such Credit Date. If such corresponding amount is not in fact made available
to Administrative Agent by such Lender, Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify the Company and the Company shall immediately pay
such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Credit Date until the date such amount is paid
to Administrative Agent, at the rate payable hereunder for Base Rate Loans for
such Class of Loans. Nothing in this Section 2.5(b) shall be deemed to relieve
any Lender from its obligation to fulfill its Term Loan Commitments and
Revolving Commitments hereunder or to prejudice any rights that the Company may
have against any Lender as a result of any default by such Lender hereunder.
2.6. USE OF PROCEEDS. The proceeds of the Tranche B Term Loans, and up
to $2,000,000 of Revolving Loans, shall be applied by the Company together with
the proceeds from the issuance of the Senior Subordinated Notes to fund in part,
the Acquisition, the repayment of the Existing Indebtedness, the consummation of
the Redemptions, and the payment of fees and expenses in connection with the
foregoing. The proceeds of the Revolving Loans, Swing Line Loans and Letters of
Credit made after the Closing Date shall be applied by the Company for working
capital and general corporate purposes of Holdings and its Subsidiaries,
including Permitted Acquisitions and permitted capital expenditures. No portion
of the proceeds of any Credit Extension shall be used in any manner that causes
or might cause such Credit
43
Extension or the application of such proceeds to violate Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation thereof or to violate the Exchange Act.
2.7. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on
its internal records an account or accounts evidencing the Obligations of the
Company to such Lender, including the amounts of the Loans made by it and each
repayment and prepayment in respect thereof. Any such recordation shall be
conclusive and binding on the Company, absent manifest error; provided, that the
failure to make any such recordation, or any error in such recordation, shall
not affect any Lender's Revolving Commitments or the Company's Obligations in
respect of any applicable Loans; and provided further, in the event of any
inconsistency between the Register and any Lender's records, the recordations in
the Register shall govern.
(b) Register. Administrative Agent shall maintain at its
Principal Office a register for the recordation of the names and addresses of
Lenders and the Revolving Commitments and Loans of each Lender from time to time
(the "REGISTER"). The Register shall be available for inspection by the Company
or any Lender at any reasonable time and from time to time upon reasonable prior
notice. Administrative Agent shall record in the Register the Revolving
Commitments and the Loans, and each repayment or prepayment in respect of the
principal amount of the Loans, and any such recordation shall be conclusive and
binding on the Company and each Lender, absent manifest error; provided, failure
to make any such recordation, or any error in such recordation, shall not affect
any Lender's Revolving Commitments or the Company's Obligations in respect of
any Loan. The Company hereby designates GSCP to serve as the Company's agent
solely for purposes of maintaining the Register as provided in this Section 2.7,
and the Company hereby agrees that, to the extent GSCP serves in such capacity,
GSCP and its officers, directors, employees, agents and affiliates shall
constitute "Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
the Company (with a copy to Administrative Agent) at least two Business Days
prior to the Closing Date, or at any time thereafter, the Company shall execute
and deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after the Company's receipt of such notice) a Note or Notes to
evidence such Lender's Tranche B Term Loan, New Term Loan, Revolving Loan or
Swing Line Loan, as the case may be.
2.8. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Class of Loan
shall bear interest on the unpaid principal amount thereof from the date made
through repayment (whether by acceleration or otherwise) thereof as follows:
(i) in the case of Revolving Loans:
44
(1) if a Base Rate Loan, at the Base Rate
plus the Applicable Margin; or
(2) if a Eurodollar Rate Loan, at the
Adjusted Eurodollar Rate plus the Applicable Margin;
(ii) in the case of Swing Line Loans, at the Base
Rate plus the Applicable Margin; and
(iii) in the case of Tranche B Term Loans:
(1) if a Base Rate Loan, at the Base Rate
plus the Applicable Margin; or
(2) if a Eurodollar Rate Loan, at the
Adjusted Eurodollar Rate plus the Applicable Margin;
(b) The basis for determining the rate of interest with
respect to any Loan (except a Swing Line Loan which can be made and maintained
as Base Rate Loans only), and the Interest Period with respect to any Eurodollar
Rate Loan, shall be selected by the Company and notified to Administrative Agent
and Lenders pursuant to the applicable Funding Notice or Conversion/Continuation
Notice, as the case may be; provided, (i) the Term Loans initially shall be made
as Base Rate Loans until the earlier of (x) the date which is thirty (30) days
following the Closing Date or such earlier date otherwise agreed by the
Administrative Agent and (y) the date upon which the primary syndication of the
Loans and Revolving Commitments as determined by the Administrative Agent has
been completed and (ii) until the date that Administrative Agent notifies the
Company that the primary syndication of the Loans and Revolving Commitments has
been completed, as determined by Administrative Agent, the Term Loans shall be
maintained as either (1) Eurodollar Rate Loans having an Interest Period of no
longer than one month or (2) Base Rate Loans. If on any day a Loan is
outstanding with respect to which a Funding Notice or Conversion/Continuation
Notice has not been delivered to Administrative Agent in accordance with the
terms hereof specifying the applicable basis for determining the rate of
interest, then for that day such Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no
more than eight (8) Interest Periods outstanding at any time. In the event the
Company fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in
the applicable Funding Notice or Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will be automatically converted into a
Base Rate Loan on the last day of the then-current Interest Period for such Loan
(or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event the Company fails
to specify an Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, the Company shall be deemed to
have selected an Interest Period of one month. As soon as practicable after
10:00 a.m. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate
45
Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to the Company and each Lender.
(d) Interest payable pursuant to Section 2.8(a) shall be
computed (i) in the case of Base Rate Loans on the basis of a 365-day or 366-day
year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided, if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
(e) Except as otherwise set forth herein, interest on each
Loan shall be payable in arrears on and to (i) each Interest Payment Date
applicable to that Loan; (ii) upon any prepayment of that Loan, whether
voluntary or mandatory, to the extent accrued on the amount being prepaid; and
(iii) at maturity, including final maturity; provided, however, with respect to
any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.
(f) The Company agrees to pay to Issuing Bank, with respect to
drawings honored under any Letter of Credit, interest on the amount paid by
Issuing Bank in respect of each such honored drawing from the date such drawing
is honored to but excluding the date such amount is reimbursed by or on behalf
of the Company at a rate equal to (i) for the period from the date such drawing
is honored to but excluding the applicable Reimbursement Date, the rate of
interest otherwise payable hereunder with respect to Revolving Loans that are
Base Rate Loans, and (ii) thereafter, a rate which is 2% per annum in excess of
the rate of interest otherwise payable hereunder with respect to Revolving Loans
that are Base Rate Loans.
(g) Interest payable pursuant to Section 2.8(f) shall be
computed on the basis of a 365/366-day year for the actual number of days
elapsed in the period during which it accrues, and shall be payable on demand
or, if no demand is made, on the date on which the related drawing under a
Letter of Credit is reimbursed in full. Promptly upon receipt by Issuing Bank of
any payment of interest pursuant to Section 2.8(f), Issuing Bank shall
distribute to each Lender, out of the interest received by Issuing Bank in
respect of the period from the date such drawing is honored to but excluding the
date on which Issuing Bank is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of any Revolving Loans),
the amount that such Lender would have been entitled to receive in respect of
the letter of credit fee that would have been payable in respect of such Letter
of Credit for such period if no drawing had been honored under such Letter of
Credit. In the event Issuing Bank shall have been reimbursed by Lenders for all
or any portion of such honored drawing, Issuing Bank shall distribute to each
Lender which has paid all amounts payable by it under Section 2.4(e) with
46
respect to such honored drawing such Lender's Pro Rata Share of any interest
received by Issuing Bank in respect of that portion of such honored drawing so
reimbursed by Lenders for the period from the date on which Issuing Bank was so
reimbursed by Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by the Company.
2.9. CONVERSION/CONTINUATION.
(a) Subject to Section 2.18 and so long as no Default or Event
of Default shall have occurred and then be continuing, the Company shall have
the option:
(i) to convert at any time all or any part of any
Term Loan or Revolving Loan equal to $1,000,000 and integral multiples
of $500,000 in excess of that amount from one Type of Loan to another
Type of Loan; provided, a Eurodollar Rate Loan may only be converted on
the expiration of the Interest Period applicable to such Eurodollar
Rate Loan unless the Company shall pay all amounts due under Section
2.18 in connection with any such conversion; or
(ii) upon the expiration of any Interest Period
applicable to any Eurodollar Rate Loan, to continue all or any portion
of such Loan equal to $1,000,000 and integral multiples of $500,000 in
excess of that amount as a Eurodollar Rate Loan.
(b) The Company shall deliver a Conversion/Continuation Notice
to Administrative Agent no later than 10:00 a.m. (New York City time) at least
one Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and the
Company shall be bound to effect a conversion or continuation in accordance
therewith.
2.10. DEFAULT INTEREST. The principal amount of all Loans not paid when
due and, to the extent permitted by applicable law, any interest payments on the
Loans or any fees or other amounts owed hereunder not paid when due, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate that is 2% per annum in excess of the interest rate otherwise payable
hereunder with respect to the applicable Loans (or, in the case of any such fees
and other amounts, at a rate which is 2% per annum in excess of the highest
interest rate otherwise then payable hereunder for Base Rate Loans); provided,
in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the highest interest rate otherwise then payable hereunder for Base
Rate Loans. Payment or acceptance of the increased rates of interest provided
for in this Section 2.10 is not a permitted alternative to timely payment and
shall not constitute a waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of Administrative Agent or any Lender.
47
2.11. FEES.
(a) The Company agrees to pay to Lenders having Revolving
Exposure:
(i) commitment fees equal to (1) the average of the
daily difference between (a) the Revolving Commitments, and (b) the sum
of (x) the aggregate principal amount of outstanding Revolving Loans
(but not any outstanding Swing Line Loans) plus (y) the Letter of
Credit Usage, times (2) the Commitment Fee Percentage; and
(ii) letter of credit fees equal to (1) the
Applicable Margin for Revolving Loans that are Eurodollar Rate Loans,
times (2) the aggregate daily maximum amount available to be drawn
under all such Letters of Credit (regardless of whether any conditions
for drawing could then be met and determined as of the close of
business on any date of determination).
All fees referred to in this Section 2.11(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
(b) The Company agrees to pay directly to Issuing Bank, for
its own account, the following fees:
(i) a fronting fee equal to 0.125%, per annum, times
the aggregate daily maximum amount available to be drawn under all
Letters of Credit (determined as of the close of business on any date
of determination); provided that, in no event, shall the fronting fee
in respect of any Letter of Credit be less than $500 per annum; and
(ii) such documentary and processing charges for any
issuance, amendment, transfer or payment of a Letter of Credit as are
in accordance with Issuing Bank's standard schedule for such charges
and as in effect at the time of such issuance, amendment, transfer or
payment, as the case may be.
(c) All fees referred to in Section 2.11(a) and 2.11(b)(i)
shall be calculated on the basis of a 360-day year and the actual number of days
elapsed and shall be payable quarterly in arrears on each of the dates specified
in Section 2.12(a) for payment of principal during the Revolving Commitment
Period, commencing on the first such date to occur after the Closing Date, and
on the Revolving Commitment Termination Date.
(d) In addition to any of the foregoing fees, the Company
agrees to pay to Agents such other fees in the amounts and at the times
separately agreed upon.
2.12. SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS.
(a) Scheduled Installments. The principal amounts of the
Tranche B Term Loans shall be repaid in consecutive quarterly installments
(each, an "INSTALLMENT") in the aggregate amounts set forth below on the
Business Day immediately following the last day of each Fiscal Quarter (each, an
"INSTALLMENT DATE"), commencing May 31, 2004:
48
FISCAL QUARTER TRANCHE B TERM LOAN INSTALLMENTS
-------------- --------------------------------
May 31, 2004 $ 387,500
August 30, 2004 $ 387,500
November 29, 2004 $ 387,500
February 28, 2005 $ 387,500
May 30, 2005 $ 387,500
August 29, 2005 $ 387,500
November 28, 2005 $ 387,500
February 2, 2006 $ 387,500
May 29, 2006 $ 387,500
August 28, 2006 $ 387,500
November 27, 2007 $ 387,500
February 26, 2007 $ 387,500
May 28, 2007 $ 387,500
August 27, 2007 $ 387,500
November 26, 2007 $ 387,500
February 25, 2008 $ 387,500
June 2, 2008 $ 387,500
September 1, 2008 $ 387,500
December 1, 2008 $ 387,500
March 2, 2009 $ 387,500
June 1, 2009 $ 387,500
August 31, 2009 $ 387,500
November 30, 2009 $ 387,500
March 1, 2010 $ 387,500
May 31, 2010 $ 387,500
August 30, 2010 $ 387,500
November 29, 2010 $ 387,500
February 28, 2011 $ 387,500
Tranche B Term Loan $144,150,000
Maturity Date
; provided, in the event any New Term Loans are made, such New Term Loans shall
be repaid on each Installment Date occurring on or after the applicable
Increased Amount Date in an amount equal to (i) the aggregate principal amount
of New Term Loans of the applicable Series of New
49
Term Loans, times (ii) the ratio (expressed as a percentage) of (y) the amount
of all other Term Loans being repaid on such Installment Date and (z) the total
aggregate principal amount of all other Term Loans outstanding on such Increased
Amount Date.
Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Tranche B Term
Loans, in accordance with Sections 2.13, 2.14 and 2.15, as applicable; and (y)
the Tranche B Term Loans, together with all other amounts owed hereunder with
respect thereto, shall, in any event, be paid in full no later than the Tranche
B Term Loan Maturity Date.
(b) Revolving Loans shall be paid in full on the Revolving
Commitment Termination Date.
2.13. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Base Rate Loans, the
Company may prepay any such Loans on any Business Day in whole
or in part, in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount;
(2) with respect to Eurodollar Rate Loans,
the Company may prepay any such Loans on any Business Day in
whole or in part in an aggregate minimum amount of $1,000,000
and integral multiples of $500,000 in excess of that amount;
and
(3) with respect to Swing Line Loans, the
Company may prepay any such Loans on any Business Day in whole
or in part in an aggregate minimum amount of $250,000, and in
integral multiples of $100,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's
prior written or telephonic notice in the case of Base Rate
Loans;
(2) upon not less than three Business Days'
prior written or telephonic notice in the case of Eurodollar
Rate Loans; and
(3) upon written or telephonic notice on the
date of prepayment, in the case of Swing Line Loans;
50
in each case given to Administrative Agent or Swing Line Lender, as the case may
be, by 12:00 p.m. (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (and
Administrative Agent will promptly transmit such telephonic or original notice
for Term Loans or Revolving Loans, as the case may be, by telefacsimile or
telephone promptly confirmed in writing to each Lender) or Swing Line Lender, as
the case may be. Upon the giving of any such notice, the principal amount of the
Loans specified in such notice shall become due and payable on the prepayment
date specified therein. Any such voluntary prepayment shall be applied as
specified in Section 2.15(a).
(b) Voluntary Commitment Reductions.
(i) The Company may, upon not less than three
Business Days' prior written or telephonic notice confirmed in writing
to Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone promptly confirmed in writing to each applicable Lender), at
any time and from time to time terminate in whole or permanently reduce
in part, without premium or penalty, the Revolving Commitments in an
amount up to the amount by which the Revolving Commitments exceed the
Total Utilization of Revolving Commitments at the time of such proposed
termination or reduction; provided, any such partial reduction of the
Revolving Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of that amount.
(ii) The Company's notice to Administrative Agent
shall designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction, and
such termination or reduction of the Revolving Commitments shall be
effective on the date specified in the Company's notice and shall
reduce the Revolving Commitment of each Lender proportionately to its
Pro Rata Share thereof.
2.14. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. No later than the first Business Day
following the date of receipt by Holdings or any of its Subsidiaries of any Net
Asset Sale Proceeds in excess of $1,000,000 from the Closing Date through the
applicable date of determination, the Company shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in Section
2.15(b) in an aggregate amount equal to such amount of Net Asset Sale Proceeds
in excess of $1,000,000 from the Closing Date; provided, so long as no Default
or Event of Default shall have occurred and be continuing, the Company shall
have the option, directly or through one or more of its Subsidiaries, to invest
Net Asset Sale Proceeds within three hundred-sixty (360) days of receipt thereof
in long-term productive assets of the general type used in the business of the
Company and its Subsidiaries; provided further, pending any such investment all
such Net Asset Sale Proceeds shall be applied to prepay Revolving Loans to the
extent outstanding (without a reduction in Revolving Commitments).
(b) Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Holdings or any of its
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds in excess of $1,000,000 from the
51
Closing Date through the applicable date of determination, the Company shall
prepay the Loans and/or the Revolving Commitments shall be permanently reduced
as set forth in Section 2.15(b) in an aggregate amount equal to such amount of
Net Insurance/Condemnation Proceeds in excess of $1,000,000; provided, so long
as no Default or Event of Default shall have occurred and be continuing, the
Company shall have the option, directly or through one or more of its
Subsidiaries to invest such Net Insurance/Condemnation Proceeds within three
hundred-sixty (360) days of receipt thereof in long term productive assets of
the general type used in the business of Holdings and its Subsidiaries, which
investment may include the repair, restoration or replacement of the applicable
assets thereof; provided further, pending any such investment all such Net
Insurance/Condemnation Proceeds, as the case may be, shall be applied to prepay
Revolving Loans to the extent outstanding (without a reduction in Revolving
Commitments).
(c) Issuance of Equity Securities. On the date of receipt by
Holdings of any Cash proceeds from a capital contribution to, or the issuance of
any Capital Stock of, Holdings or any of its Subsidiaries (other than pursuant
to any employee stock or stock option compensation plan or equity issued to
Sponsor or Sponsor's Affiliates, all or substantially all of the Cash proceeds
of which are utilized by the Company to consummate Permitted Acquisitions or for
capital expenditures or Investments otherwise permitted hereunder), the Company
shall prepay the Loans and/or the Revolving Commitments shall be permanently
reduced as set forth in Section 2.15(b) in an aggregate amount equal to 50.0% of
such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, payable to a Person that is
not Holdings or its Subsidiaries, including reasonable legal fees and expenses.
(d) Issuance of Debt. No later than the first Business Day
following the date of receipt by Holdings or any of its Subsidiaries of any Cash
proceeds from the incurrence of any Indebtedness of Holdings or any of its
Subsidiaries (other than with respect to any Indebtedness permitted to be
incurred pursuant to Section 6.1, but expressly including the proceeds of any
sale and leaseback pursuant to Section 6.11), the Company shall prepay the Loans
and/or the Revolving Commitments shall be permanently reduced as set forth in
Section 2.15(b) in an aggregate amount equal to 100% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, payable to a Person that is not Holdings or its
Subsidiaries, including reasonable legal fees and expenses.
(e) Consolidated Excess Cash Flow. In the event that there
shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with
Fiscal Year 2004 but only for the period starting with the Closing Date for such
Fiscal Year), the Company shall, no later than one hundred-five (105) days after
the end of such Fiscal Year, prepay the Loans and/or the Revolving Commitments
shall be permanently reduced as set forth in Section 2.15(b) in an aggregate
amount equal to 75.0% of such Consolidated Excess Cash Flow; provided, during
any period in which the Leverage Ratio (determined for any such period by
reference to the most recent Compliance Certificate delivered pursuant to
Section 5.1(d) calculating the Leverage Ratio) shall be 4.50:1.00 or less, the
Company shall only be required to make the prepayments and/or reductions
otherwise required hereby in an amount equal to 50.0% of such Consolidated
Excess Cash Flow.
52
(f) Revolving Loans and Swing Loans. The Company shall from
time to time prepay first, the Swing Line Loans, and second, the Revolving Loans
to the extent necessary so that the Total Utilization of Revolving Commitments
shall not at any time exceed the Revolving Commitments then in effect.
(g) Prepayment Certificate. Concurrently with any prepayment
of the Loans and/or reduction of the Revolving Commitments pursuant to Sections
2.14(a) through 2.14(e), the Company shall deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the calculation of the amount
of the applicable net proceeds or Consolidated Excess Cash Flow, as the case may
be. In the event that the Company shall subsequently determine that the actual
amount received exceeded the amount set forth in such certificate, the Company
shall promptly make an additional prepayment of the Loans and/or the Revolving
Commitments shall be permanently reduced in an amount equal to such excess, and
the Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.
(h) Subordinated Indebtedness. In the event that the Company
shall otherwise be required to make any mandatory prepayment of Indebtedness
under the Senior Subordinated Notes (other than Refinancing Notes) or any
Refinancing Notes, the Company shall prepay the Loans and reduce the Commitments
in accordance with Section 2.15 in an aggregate amount equal to the amount of
such mandatory prepayment.
2.15. APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type of Loans. Any
prepayment of any Loan pursuant to Section 2.13(a) shall be applied as specified
by the Company in the applicable notice of prepayment; provided, in the event
the Company fails to specify the Loans to which any such prepayment shall be
applied, such prepayment shall be applied as follows:
first, to repay outstanding Swing Line Loans to the
full extent thereof;
second, to repay outstanding Revolving Loans to the
full extent thereof; and
third, to prepay the Term Loans on a pro rata basis
(in accordance with the respective outstanding principal amounts
thereof).
Any prepayment of any Term Loan pursuant to Section
2.13(a) shall be further applied on a pro rata basis to reduce the
scheduled remaining Installments of principal on such Term Loan.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount required to be paid pursuant to Sections 2.14(a) through 2.14(e) shall be
applied as follows:
first, to prepay Term Loans on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof)
and shall be further applied on a pro rata basis to the remaining
scheduled Installments of the applicable Term Loans;
53
second, to prepay the Swing Line Loans to the full
extent thereof and to permanently reduce the Revolving Commitments by
the amount of such prepayment;
third, to prepay the Revolving Loans to the full
extent thereof and to further permanently reduce the Revolving
Commitments by the amount of such prepayment;
fourth, to prepay outstanding reimbursement
obligations with respect to Letters of Credit and to further
permanently reduce the Revolving Loan Commitments by the amount of such
prepayment;
fifth, to cash collateralize Letters of Credit and to
further permanently reduce the Revolving Loan Commitments by the amount
of such cash collateralization; and
sixth, to further permanently reduce the Revolving
Commitments to the full extent thereof.
(c) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Considering each Class of Loans being prepaid separately,
any prepayment thereof shall be applied first to Base Rate Loans to the full
extent thereof before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be made by the
Company pursuant to Section 2.18(c).
(d) Notwithstanding the foregoing, so long as an Event of
Default exists and is continuing, any amount required to be paid pursuant to
Section 2.14(a) through Section 2.14(e) shall be applied to prepay the Term
Loans and outstanding Revolving Loans on a pro rata basis and, in respect of the
Term Loans, any such amounts shall be applied to reduce on a pro rata basis the
remaining scheduled Installments of principal on the Term Loans.
2.16. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by the Company of principal, interest, fees
and other Obligations shall be made in Dollars in same day funds, without
defense, setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 p.m. (New York City time)
on the date due at Administrative Agent's Principal Office for the account of
Lenders; funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by the Company on the next succeeding Business
Day.
(b) All payments in respect of the principal amount of any
Loan (other than voluntary prepayments of Base Rate Revolving Loans) shall be
accompanied by payment of accrued interest on the principal amount being repaid
or prepaid.
(c) Administrative Agent shall promptly distribute to each
Lender at such address as such Lender shall indicate in writing, such Lender's
applicable Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other
54
amounts due thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of
"Interest Period", whenever any payment to be made hereunder shall be stated to
be due on a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Revolving Commitment
fees and any Letter of Credit fees hereunder.
(f) The Company hereby authorizes Administrative Agent to
charge the Company's accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, Letter of Credit
reimbursements, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).
(g) Administrative Agent shall deem any payment by or on
behalf of the Company hereunder that is not made in same day funds prior to
12:00 p.m. (New York City time) to be a non-conforming payment. Any such payment
shall not be deemed to have been received by Administrative Agent until the
later of (i) the time such funds become available funds, and (ii) the applicable
next Business Day. Administrative Agent shall give prompt telephonic notice to
the Company and each applicable Lender (confirmed in writing) if any payment is
non-conforming. Any non-conforming payment may constitute or become a Default or
Event of Default in accordance with the terms of Section 8.1(a). Interest shall
continue to accrue on any principal as to which a non-conforming payment is made
until such funds become available funds (but in no event less than the period
from the date of such payment to the next succeeding applicable Business Day) at
the rate determined pursuant to Section 2.10 from the date such amount was due
and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not
otherwise been waived, and the maturity of the Obligations shall have been
accelerated pursuant to Section 8.1, all payments or proceeds received by Agents
hereunder in respect of any of the Obligations, shall be applied in accordance
with the application arrangements described in Section 7.2 of the Pledge and
Security Agreement.
2.17. RATABLE SHARING. Lenders hereby agree among themselves that,
except as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy
55
Code, receive payment or reduction of a proportion of the aggregate amount of
principal, interest, amounts payable in respect of Letters of Credit, fees and
other amounts then due and owing to such Lender hereunder or under the other
Credit Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender)
which is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of the Company or otherwise (and whether as a result of any
demand, settlement, litigation or otherwise), those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
The Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by the Company to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder directly by
Company.
2.18. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability to Determine Applicable Interest Rate. In the
event that Administrative Agent shall have determined (which determination shall
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances affecting the London interbank market adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to the Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies the
Company and Lenders that the circumstances giving rise to such notice no longer
exist, and (ii) any Funding Notice or Conversion/Continuation Notice given by
the Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by the Company.
(b) Illegality or Impracticability of Eurodollar Rate Loans.
In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with the Company and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans
(i) has become unlawful as a result of compliance by such Lender in good faith
with any law, treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful), or (ii) has become impracticable, as a result of
contingencies occurring after the date hereof which materially and adversely
affect the
56
London interbank market or the position of such Lender in that market, then, and
in any such event, such Lender shall be an "AFFECTED LENDER" and it shall on
that day give notice (by telefacsimile or by telephone confirmed in writing) to
the Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(1) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (2) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by the
Company pursuant to a Funding Notice or a Conversion/Continuation Notice, the
Affected Lender shall make such Loan as (or continue such Loan as or convert
such Loan to, as the case may be) a Base Rate Loan, (3) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (4) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by the Company pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Company shall have the
option, subject to the provisions of Section 2.18(c), to rescind such Funding
Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender). Except as provided in the
immediately preceding sentence, nothing in this Section 2.18(b) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. The Company shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits including, without limitation, the
Applicable Margin) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not
occur on a date specified therefor in a Funding Notice or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Conversion/Continuation Notice
or a telephonic request for conversion or continuation; (ii) if any prepayment
or other principal payment of, or any conversion of, any of its Eurodollar Rate
Loans occurs on a date prior to the last day of an Interest Period applicable to
that Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not
made on any date specified in a notice of prepayment given by the Company.
(d) Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of such Lender.
57
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.18 and under
Section 2.19 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.18 and under
Section 2.19.
2.19. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.20 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (which term shall include
Issuing Bank for purposes of this Section 2.19(a)) shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law): (i)
subjects such Lender (or its applicable lending office) to any additional Tax
(other than any Tax on the overall net income of such Lender) with respect to
this Agreement or any of the other Credit Documents or any of its obligations
hereunder or thereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable
hereunder; (ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or (iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the London interbank market; and the
result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, the Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to the Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for
58
calculating the additional amounts owed to such Lender under this Section
2.19(a), which statement shall be conclusive and binding upon all parties hereto
absent manifest error. Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Company shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender or
the Issuing Bank, as the case may be, notifies the Company of the change giving
rise to such increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefor (except that, if the change
giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).
(b) Capital Adequacy Adjustment. In the event that any Lender
(which term shall include Issuing Bank for purposes of this Section 2.19(b))
shall have determined that the adoption, effectiveness, phase-in or
applicability after the Closing Date of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its applicable lending office) with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Revolving
Commitments or Letters of Credit, or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by the Company from such Lender of the
statement referred to in the next sentence, the Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to the Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.19(b), which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
Notwithstanding the foregoing, the Company shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section for any increased costs
incurred or reductions suffered more than nine months prior to the date that
such Lender or the Issuing Bank, as the case may be, notifies the Company of the
change giving rise to such increased costs or reductions and of such Lender's or
the Issuing Bank's intention to claim compensation therefor (except that, if the
change giving rise to such increased costs or reductions is retroactive, then
the nine-month period referred to above shall be extended to include the period
of retroactive effect thereof).
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2.20. TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums payable by any
Credit Party hereunder and under the other Credit Documents shall (except to the
extent required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) Withholding of Taxes. If any Credit Party or any other
Person is required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by any Credit Party to Administrative
Agent or any Lender (which term shall include Issuing Bank for purposes of this
Section 2.20(b)) under any of the Credit Documents: (i) the Company shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as the Company becomes aware of it; (ii) the Company shall
pay any such Tax before the date on which penalties attach thereto, such payment
to be made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative Agent or such
Lender; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, Administrative Agent or such Lender, as the case may be, receives on
the due date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and (iv) within thirty
days after paying any sum from which it is required by law to make any deduction
or withholding, and within thirty days after the due date of payment of any Tax
which it is required by clause (ii) above to pay, the Company shall deliver to
Administrative Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to the relevant
taxing or other authority; provided, no such additional amount shall be required
to be paid to any Lender under clause (iii) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(c) Evidence of Exemption From U.S. Withholding Tax. Each
Lender that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes
(a "NON-US LENDER") shall deliver to Administrative Agent for transmission to
the Company, on or prior to the Closing Date (in the case of each Lender listed
on the signature pages hereof on the Closing Date) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the
determination of the
60
Company or Administrative Agent (each in the reasonable exercise of its
discretion), (i) two original copies of Internal Revenue Service Form W-8ECI (or
any successor forms), properly completed and duly executed by such Lender, and
such other documentation required under the Internal Revenue Code and reasonably
requested by the Company to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts payable
under any of the Credit Documents, or (ii) if such Lender is not a "bank" or
other Person described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form W-8BEN or W-8ECI pursuant to
clause (i) above, a Certificate re Non-Bank Status together with two original
copies of Internal Revenue Service Form W-8BEN (or any successor form), properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by the Company
to establish that such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments to such Lender of
interest payable under any of the Credit Documents. Each Lender required to
deliver any forms, certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to this Section 2.20(c) hereby
agrees, from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to the Company two new original copies of
Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank
Status and two original copies of Internal Revenue Service Form W-8BEN (or any
successor form), as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by the Company to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and the Company of its inability to deliver any
such forms, certificates or other evidence. The Company shall not be required to
pay any additional amount to any Non-US Lender under Section 2.20(b)(iii) if
such Lender shall have failed (1) to deliver the forms, certificates or other
evidence referred to in the second sentence of this Section 2.20(c), or (2) to
notify Administrative Agent and the Company of its inability to deliver any such
forms, certificates or other evidence, as the case may be; provided, if such
Lender shall have satisfied the requirements of the first sentence of this
Section 2.20(c) on the Closing Date or on the date of the Assignment Agreement
pursuant to which it became a Lender, as applicable, nothing in this last
sentence of Section 2.20(c) shall relieve the Company of its obligation to pay
any additional amounts pursuant this Section 2.20 in the event that, as a result
of any change in any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described herein.
2.21. OBLIGATION TO MITIGATE. Each Lender (which term shall include
Issuing Bank for purposes of this Section 2.21) agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans or Letters of Credit, as the case may be, becomes aware of the occurrence
of an event or the existence of a condition that would cause such Lender
61
to become an Affected Lender or that would entitle such Lender to receive
payments under Section 2.18, 2.19 or 2.20, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or
maintain its Credit Extensions, including any Affected Loans, through another
office of such Lender, or (b) take such other measures as such Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender pursuant to Section
2.18, 2.19 or 2.20 would be materially reduced and if, as determined by such
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Revolving Commitments, Loans or Letters of Credit through such other office
or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Revolving Commitments, Loans or Letters of
Credit or the interests of such Lender; provided, such Lender will not be
obligated to utilize such other office pursuant to this Section 2.21 unless the
Company agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by the Company
pursuant to this Section 2.21 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender to the Company (with a copy to
Administrative Agent) shall be conclusive absent manifest error.
2.22. DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender, at the direction or request of
any regulatory agency or authority, defaults (a "DEFAULTING LENDER") in its
obligation to fund (a "FUNDING DEFAULT") any Revolving Loan or its portion of
any unreimbursed payment under Section 2.3(b)(iv) or 2.4(e) (in each case, a
"DEFAULTED LOAN"), then (a) during any Default Period with respect to such
Defaulting Lender, such Defaulting Lender shall be deemed not to be a "Lender"
for purposes of voting on any matters (including the granting of any consents or
waivers) with respect to any of the Credit Documents; (b) to the extent
permitted by applicable law, until such time as the Default Excess with respect
to such Defaulting Lender shall have been reduced to zero, (i) any voluntary
prepayment of the Revolving Loans shall, if the Company so directs at the time
of making such voluntary prepayment, be applied to the Revolving Loans of other
Lenders as if such Defaulting Lender had no Revolving Loans outstanding and the
Revolving Exposure of such Defaulting Lender were zero, and (ii) any mandatory
prepayment of the Revolving Loans shall, if the Company so directs at the time
of making such mandatory prepayment, be applied to the Revolving Loans of other
Lenders (but not to the Revolving Loans of such Defaulting Lender) as if such
Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender, it
being understood and agreed that the Company shall be entitled to retain any
portion of any mandatory prepayment of the Revolving Loans that is not paid to
such Defaulting Lender solely as a result of the operation of the provisions of
this clause (b); (c) such Defaulting Lender's Revolving Commitment and
outstanding Revolving Loans and such Defaulting Lender's Pro Rata Share of the
Letter of Credit Usage shall be excluded for purposes of calculating the
Revolving Commitment fee payable to Lenders pursuant to Section 2.11 in respect
of any day during any Default Period with respect to such Defaulting Lender, and
such Defaulting Lender shall not be entitled to receive any Revolving Commitment
fee pursuant to Section 2.11 with respect to such Defaulting Lender's Revolving
Commitment in respect of any Default Period with respect to such Defaulting
Lender; and (d) the Total Utilization of Revolving Commitments as at any date of
determination shall be calculated as if such Defaulting Lender had funded all
Defaulted Loans
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of such Defaulting Lender. No Revolving Commitment of any Lender shall be
increased or otherwise affected, and, except as otherwise expressly provided in
this Section 2.22, performance by the Company of its obligations hereunder and
the other Credit Documents shall not be excused or otherwise modified as a
result of any Funding Default or the operation of this Section 2.22. The rights
and remedies against a Defaulting Lender under this Section 2.22 are in addition
to other rights and remedies which the Company may have against such Defaulting
Lender with respect to any Funding Default and which Administrative Agent or any
Lender may have against such Defaulting Lender with respect to any Funding
Default.
2.23. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to
the contrary notwithstanding, in the event that: (a) (i) any Lender (an
"INCREASED-COST LENDER") shall give notice to the Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.18, 2.19 or 2.20, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after the Company's request for such withdrawal; or
(b) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five Business Days after the Company's request that it cure such
default; or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"NON-CONSENTING LENDER") whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "TERMINATED LENDER"), the Company may, by giving
written notice to Administrative Agent and any Terminated Lender of its election
to do so, elect to cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign its outstanding Loans and its Revolving
Commitments, if any, in full to one or more Eligible Assignees (each a
"REPLACEMENT LENDER") in accordance with the provisions of Section 10.6;
provided, (1) on the date of such assignment, the Replacement Lender shall pay
to Terminated Lender an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings that have
been funded by such Terminated Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section
2.11; (2) on the date of such assignment, the Company shall pay any amounts
payable to such Terminated Lender pursuant to Section 2.18(c), 2.19 or 2.20; or
otherwise as if it were a prepayment and (3) in the event such Terminated Lender
is a Non-Consenting Lender, each Replacement Lender shall consent, at the time
of such assignment, to each matter in respect of which such Terminated Lender
was a Non-Consenting Lender; provided, the Company may not make such election
with respect to any Terminated Lender that is also an Issuing Bank unless, prior
to the effectiveness of such election, the Company shall have caused each
outstanding Letter of Credit issued thereby to be cancelled. Upon the prepayment
of all amounts owing to any Terminated Lender and the termination of such
Terminated Lender's Revolving Commitments, if any, such Terminated Lender shall
no longer constitute a "Lender" for purposes hereof; provided, any rights of
such Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender.
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2.24. INCREMENTAL FACILITIES. The Company may by written notice to
Administrative Agent elect to request (A) prior to the Revolving Commitment
Termination Date, an increase to the existing Revolving Loan Commitments (any
such increase, the "NEW REVOLVING LOAN COMMITMENTS") and/or (B) the
establishment of one or more new term loan commitments (the "NEW TERM LOAN
COMMITMENTS"), by an amount not in excess of $25,000,000 in the aggregate and
not less than $5,000,000 individually (or such lesser amount which shall be
approved by Administrative Agent or such lesser amount that shall constitute the
difference between $5,000,000 and all such New Revolving Loan Commitments and
New Term Loan Commitments obtained prior to such date), and integral multiples
of $1,000,000 in excess of that amount. Each such notice shall specify (A) the
date (each, an "INCREASED AMOUNT DATE") on which the Company proposes that the
New Revolving Loan Commitments or New Term Loan Commitments, as applicable,
shall be effective, which shall be a date not less than 10 Business Days after
the date on which such notice is delivered to Administrative Agent and (B) the
identity of each Lender or other Person that is an Eligible Assignee (each, a
"NEW REVOLVING LOAN LENDER" or "NEW TERM LOAN LENDER", as applicable) to whom
the Company proposes any portion of such New Revolving Loan Commitments or New
Term Loan Commitments, as applicable, be allocated and the amounts of such
allocations; provided that any Lender approached to provide all or a portion of
the New Revolving Loan Commitments or New Term Loan Commitments may elect or
decline, in its sole discretion, to provide a New Revolving Loan Commitment or a
New Term Loan Commitment. Such New Revolving Loan Commitments or New Term Loan
Commitments shall become effective, as of such Increased Amount Date; provided
that (1) no Default or Event of Default shall exist on such Increased Amount
Date before or after giving effect to such New Revolving Loan Commitments or New
Term Loan Commitments, as applicable; (2) both before and after giving effect to
the making of any Series of New Term Loans, each of the conditions set forth in
Section 3.2 shall be satisfied; (3) the Company and its Subsidiaries shall be in
pro forma compliance with each of the covenants set forth in Section 6.8 as of
the last day of the most recently ended Fiscal Quarter after giving effect to
such New Revolving Loan Commitments or New Term Loan Commitments, as applicable;
(4) the New Revolving Loan Commitments or New Term Loan Commitments, as
applicable, shall be effected pursuant to one or more Joinder Agreements
executed and delivered by the Company, Administrative Agent, and each of which
shall be recorded in the Register and shall be subject to the requirements set
forth in Section 2.20(c); (5) the Company shall make any payments in respect of
breakage or non-commencement of an Interest Period required pursuant to Section
2.18(c) in connection with the New Revolving Loan Commitments or New Term Loan
Commitments, as applicable; (6) the Company shall deliver or cause to be
delivered any legal opinions or other documents reasonably requested by
Administrative Agent in connection with any such transaction. Any New Term Loans
made on an Increased Amount Date shall be designated, a separate series (a
"SERIES") of New Term Loans for all purposes of this Agreement; and (7) the
Leverage Ratio on a pro forma basis as of the last day of the most recently
ended Fiscal Quarter after giving effect to any Loans made pursuant to such New
Revolving Loan Commitments on the Increased Amount Date or New Term Loan
Commitments, as applicable and after giving effect to use of proceeds thereof,
shall be the Leverage Ratio as set forth for such Fiscal Quarter in Section
6.8(b) minus 0.25.
On any Increased Amount Date on which New Revolving Loan Commitments
are effected, subject to the satisfaction of the foregoing terms and conditions,
(a) each of the
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Revolving Lenders shall assign to each of the New Revolving Loan Lenders, and
each of the New Revolving Loan Lenders shall purchase from each of the Revolving
Loan Lenders, at the principal amount thereof (together with accrued interest),
such interests in the Revolving Loans outstanding on such Increased Amount Date
as shall be necessary in order that, after giving effect to all such assignments
and purchases, such Revolving Loans will be held by existing Revolving Loan
Lenders and New Revolving Loan Lenders ratably in accordance with their
Revolving Loan Commitments after giving effect to the addition of such New
Revolving Loan Commitments to the Revolving Loan Commitments, (b) each New
Revolving Loan Commitment shall be deemed for all purposes a Revolving Loan
Commitment and each Loan made thereunder (a "NEW REVOLVING LOAN") shall be
deemed, for all purposes, a Revolving Loan and (c) each New Revolving Loan
Lender shall become a Lender with respect to the New Revolving Loan Commitment
and all matters relating thereto.
On any Increased Amount Date on which any New Term Loan Commitments of
any Series are effective, subject to the satisfaction of the foregoing terms and
conditions, (i) each New Term Loan Lender of any Series shall make a Loan to the
Company (a "NEW TERM LOAN") in an amount equal to its New Term Loan Commitment
of such Series, and (ii) each New Term Loan Lender of any Series shall become a
Lender hereunder with respect to the New Term Loan Commitment of such Series and
the New Term Loans of such Series made pursuant thereto.
Administrative Agent shall notify Lenders promptly upon receipt of the
Company's notice of each Increased Amount Date and in respect thereof (y) the
New Revolving Loan Commitments and the New Revolving Loan Lenders or the Series
of New Term Loan Commitments and the New Term Loan Lenders of such Series, as
applicable, and (z) in the case of each notice to any Revolving Loan Lender, the
respective interests in such Revolving Loan Lender's Revolving Loans, in each
case subject to the assignments contemplated by this Section.
The terms and provisions of the New Term Loans and New Term Loan
Commitments of any Series shall be, except as otherwise set forth herein or in
the Joinder Agreement, identical to the Tranche B Term Loans. The terms and
provisions of the New Revolving Loans shall be identical to the Revolving Loans.
In any event (i) the weighted average life to maturity of all New Term Loans of
any Series shall be no shorter than the weighted average life to maturity of the
Tranche B Terms Loans, (ii) the applicable New Term Loan Maturity Date of each
Series shall be no shorter than the final maturity of the Revolving Loans and
the Tranche B Term Loans, (iii) the rate of interest applicable to the New Term
Loans of each Series shall be determined by the Company and the applicable new
Lenders and shall be set forth in each applicable Joinder Agreement; provided
however that the interest rate applicable to the New Term Loans shall not be
greater than the highest interest rate that may, under any circumstances, be
payable with respect to Tranche B Term Loans plus 0.50% per annum unless the
interest rate with respect to the Tranche B Term Loan is increased so as to
equal the interest rate applicable to the New Term Loans and (iv) to the extent
deemed necessary by Administrative Agent, in its sole discretion, provisions
shall have been made to ensure that no less than 50% of the New Revolving Loan
Commitments remain funded through the applicable New Term Loan Maturity Date.
Each Joinder Agreement may, without the consent of any other Lenders, effect
such amendments to this Agreement and the other Credit Documents as may be
necessary or
65
appropriate, in the opinion of the Administrative Agent, to effect the provision
of this Section 2.24.
SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE. The obligation of any Lender to make a Credit
Extension on the Closing Date is subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions on or before the
Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent
shall have received (i) sufficient copies of each Organizational Document
executed and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender, each dated the Closing Date or a recent date prior
thereto; (ii) signature and incumbency certificates of the officers of such
Person executing the Credit Documents to which it is a party; (iii) resolutions
of the Board of Directors or similar governing body of each Credit Party
approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents and the Related Agreements to which it
is a party or by which it or its assets may be bound as of the Closing Date,
certified as of the Closing Date by its secretary or an assistant secretary as
being in full force and effect without modification or amendment; (iv) a good
standing certificate from the applicable Governmental Authority of each Credit
Party's jurisdiction of incorporation, organization or formation and in each
jurisdiction listed on Schedule 4.1 in which it is qualified as a foreign
corporation or other entity to do business, each dated a recent date prior to
the Closing Date; and (v) such other documents as Administrative Agent may
reasonably request.
(c) Organizational and Capital Structure. The organizational
structure and capital structure of Holdings and its Subsidiaries, both before
and after giving effect to Transactions, shall be as set forth on Schedule 4.1.
(d) Capitalization of Holdings and the Company. (i)
Simultaneously with the first borrowings hereunder, Sponsor shall have made the
contribution of the Sponsor Equity and the Company shall have received the
proceeds thereof; and (ii) simultaneously with the first borrowings hereunder,
the Company shall have issued $150,000,000 of Senior Subordinated Notes which
together with the Sponsor Equity and the proceeds of the Loans made hereunder on
the Closing Date shall be sufficient (with the use of any Revolving Loans) to
consummate the Acquisition and the transactions contemplated in connection
therewith and pay all Transaction Costs.
(e) Consummation of Transactions.
(i) (1) All conditions set forth in the Acquisition
Documents and documents related to the Senior Subordinated Notes shall have been
satisfied or the
66
fulfillment of any such conditions shall have been waived with the consent of
Administrative Agent (which consent shall not be unreasonably withheld) and (2)
the Transactions shall have become effective in accordance with the terms of the
Related Agreements.
(ii) Administrative Agent shall have received a fully
executed or conformed copy of each Related Agreement and any documents
executed in connection therewith. Each Related Agreement shall be in
full force and effect, shall include terms and provisions reasonably
satisfactory to Administrative Agent and no provision thereof shall
have been modified or waived in any respect reasonably determined by
Administrative Agent to be material, in each case without the consent
of Administrative Agent.
(iii) Since the date of execution thereof, there
shall have been no amendment, restatement, or other modification or
waiver of the terms and conditions of the Merger Agreement which, in
the reasonable opinion of the Administrative Agent, is in any manner
adverse to the Lenders without the prior written consent of the
Administrative Agent (which consent shall not be unreasonably
withheld).
(iv) The Company shall have issued the Senior
Subordinated Notes in the aggregate principal amount of not less than
$150,000,000 pursuant to the Senior Subordinated Note Indenture.
(f) Existing Indebtedness; Debt Tender; CB Notes Call. On the
Closing Date, Holdings and its Subsidiaries shall have (i) repaid in full all
outstanding Existing Indebtedness, (ii) terminated any commitments to lend or
make other extensions of credit thereunder, (iii) delivered to Administrative
Agent all documents or instruments necessary to release all Liens securing
Existing Indebtedness or other obligations of Holdings and its Subsidiaries
thereunder being repaid on the Closing Date, and (iv) made arrangements
reasonably satisfactory to Administrative Agent with respect to the cancellation
of any letters of credit outstanding thereunder or the issuance of Letters of
Credit to support the obligations of Holdings and its Subsidiaries with respect
thereto. The Administrative Agent shall be reasonably satisfied that an
irrevocable notice of redemption for all outstanding CB Notes has been deposited
with the trustee and sufficient funds have been irrevocably deposited to fund
such redemption and the Debt Tender shall have occurred, each on terms
reasonably acceptable to the Administrative Agent.
(g) Transaction Costs. On or prior to the Closing Date, the
Company shall have delivered to Administrative Agent the Company's reasonable
best estimate of the Transaction Costs (other than fees payable to any Agent).
(h) Governmental Authorizations and Consents. Each Credit
Party shall have obtained all Governmental Authorizations and all consents of
other Persons, in each case that are necessary in connection with the
transactions contemplated by the Credit Documents and the Related Agreements and
each of the foregoing shall be in full force and effect and in form and
substance reasonably satisfactory to Administrative Agent. All applicable
waiting periods shall
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have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the transactions contemplated by the Credit Documents or the Related
Agreements or the financing thereof and no action, request for stay, petition
for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable agency to take
action to set aside its consent on its own motion shall have expired.
(i) Real Estate Assets. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid and, subject to
any filing and/or recording referred to herein, perfected First Priority
security interest in certain Real Estate Assets, Company and each applicable
Guarantor shall have used their commercially reasonable efforts to obtain and
deliver to Collateral Agent, in the case of each Leasehold Property listed on
Schedule 3.1(i), (I) a Landlord Consent and Estoppel and (II) evidence that such
Leasehold Property is a Recorded Leasehold Interest, and Collateral Agent shall
have received from the Company and each applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper
form for recording in all appropriate places in all applicable
jurisdictions, encumbering each Real Estate Asset listed in Schedule
3.1(i) (each, a "CLOSING DATE MORTGAGED PROPERTY");
(ii) an opinion of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) in each state in which a
Closing Date Mortgaged Property is located addressed to the Agents and
the Lenders and dated as of the Closing Date with respect to the
enforceability of the form(s) of Mortgages to be recorded in such state
and such other matters as Collateral Agent may reasonably request, in
each case in form and substance reasonably satisfactory to Collateral
Agent;
(iii) (A) ALTA mortgagee title insurance policies or
unconditional commitments therefor issued by one or more title
companies reasonably satisfactory to Collateral Agent with respect to
each Closing Date Mortgaged Property (each, a "TITLE POLICY"), in
amounts not less than the fair market value of each Closing Date
Mortgaged Property, together with a title report issued by a title
company with respect thereto, dated not more than thirty days prior to
the Closing Date and copies of all recorded documents listed as
exceptions to title or otherwise referred to therein, each in form and
substance reasonably satisfactory to Collateral Agent and (B) evidence
reasonably satisfactory to Collateral Agent that such Credit Party has
paid to the title company or to the appropriate governmental
authorities all expenses and premiums of the title company and all
other sums required in connection with the issuance of each Title
Policy and all recording and stamp taxes (including mortgage recording
and intangible taxes) payable in connection with recording the
Mortgages for each Closing Date Mortgaged Property in the appropriate
real estate records;
(iv) evidence of flood insurance with respect to each
Flood Hazard Property that is located in a community that participates
in the National Flood Insurance Program, in each case in compliance
with any applicable regulations of the Board of
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Governors of the Federal Reserve System, in form and substance
reasonably satisfactory to Collateral Agent; and
(v) ALTA survey in respect of the Dallas Facility,
certified to Collateral Agent and dated not more than thirty days prior
to the Closing Date.
(j) Personal Property Collateral. In order to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid, perfected
First Priority security interest in the personal property Collateral, Collateral
Agent shall have received:
(i) evidence reasonably satisfactory to Collateral
Agent of the compliance by each Credit Party with their obligations
under the Pledge and Security Agreement and the other Collateral
Documents (including, without limitation, their obligations to execute
and deliver UCC financing statements, originals of securities,
instruments and chattel paper and any agreements perfecting the
security interest in the deposit and/or securities accounts as provided
therein);
(ii) A completed Collateral Questionnaire dated the
Closing Date and executed by an Authorized Officer of each Credit
Party, together with all attachments contemplated thereby, including
(A) the results of a recent search, by a Person satisfactory to
Collateral Agent, of all effective UCC financing statements (or
equivalent filings) made with respect to any personal or mixed property
of any Credit Party in the jurisdictions specified in the Collateral
Questionnaire, together with copies of all such filings disclosed by
such search, and (B) UCC amendment financing statements (or similar
documents) duly authorized for filing by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate
any effective UCC financing statements (or equivalent filings)
disclosed in such search (other than any such financing statements in
respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) with respect to the
creation and perfection of the security interests in favor of
Collateral Agent in such Collateral and such other matters governed by
the laws of each jurisdiction in which any Credit Party or any personal
property Collateral is located addressed to the Agents and the Lenders
and dated as of the Closing Date (for the purposes of the UCC) and the
laws of other applicable jurisdictions, in each case as Collateral
Agent may reasonably request, in form and substance reasonably
satisfactory to Collateral Agent; and
(iv) evidence that each Credit Party shall have taken
or caused to be taken any other action, executed and delivered or
caused to be executed and delivered any other agreement, document and
instrument (including without limitation, (i) a Landlord Personal
Property Collateral Access Agreement executed by the landlord of any
Leasehold Property and by the applicable Credit Party and (ii) any
intercompany notes evidencing Indebtedness permitted to be incurred
pursuant to Section 6.1(b)) and made or caused to be made any other
filing and recording (other than as set forth herein) reasonably
required by Collateral Agent.
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(k) Environmental Reports. Administrative Agent shall have
received reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent, regarding environmental matters relating
to the Facilities, which reports shall include a Phase I Report for each of the
Facilities specified by the Administrative Agent.
(l) Historical Financial Statements; Projections. Lenders
shall have received from Holdings (i) the Historical Financial Statements, and
(ii) the Projections.
(m) Evidence of Insurance. Collateral Agent shall have
received a certificate from the Company's insurance broker or other evidence
reasonably satisfactory to it that all insurance required to be maintained
pursuant to Section 5.5 is in full force and effect, together with endorsements
naming the Collateral Agent, for the benefit of the Secured Parties as
additional insured and loss payee for any covered loss in excess of $500,000
thereunder to the extent required under Section 5.5.
(n) Opinions of Counsel to Credit Parties. Lenders shall have
received originally executed copies of the favorable written opinions of Ropes &
Gray LLP, counsel for Credit Parties, addressed to the Administrative Agent and
the Lenders, as to such other matters as Administrative Agent may reasonably
request, dated as of the Closing Date and otherwise in form and substance
reasonably satisfactory to Administrative Agent (and each Credit Party hereby
instructs such counsel to deliver such opinions to Agents and Lenders).
(o) Fees. The Company shall have paid to Administrative Agent
the fees payable on the Closing Date referred to in Section 2.11(d).
(p) Solvency Certificate. On the Closing Date, Administrative
Agent shall have received a Solvency Certificate from the chief financial
officer of the Company, dated the Closing Date and addressed to Administrative
Agent and Lenders, in form, scope and substance reasonably satisfactory to
Administrative Agent, with appropriate attachments and demonstrating that after
giving effect to the consummation of Transactions, the Company and its
Subsidiaries are and will be Solvent.
(q) Closing Date Certificate. Holdings and the Company shall
have delivered to Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
(r) Credit Rating. The credit facilities provided for under
this Agreement shall have been assigned a credit rating by either S&P and
Moody's in each case reasonably satisfactory to the Agents.
(s) Closing Date. Lenders shall have made the Term Loans to
the Company on or before April 2, 2004.
(t) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent,
singly or in the aggregate, materially impairs the Transactions, the
70
financing thereof or any of the other transactions contemplated by the Credit
Documents or the Related Agreements, or that could have a Material Adverse
Effect.
(u) Chief Financial Officer Certificate. Holdings and the
Company shall have delivered to Administrative Agent and Lenders an originally
executed chief financial officer certificate certifying that the pro forma
Leverage Ratio as of August 30, 2003 and for the most recent twelve-month period
for which financial statements are available of the Company and its Subsidiaries
for the twelve-month period then ended (which pro forma ratio shall be
calculated reflecting the Transactions on a pro forma basis and shall be
acceptable to the Lenders) shall not be greater than 5.55 to 1.0, it being
understood that the Company and the Administrative Agent have agreed that (A)
pro forma Consolidated Adjusted EBITDA for (1) the twelve-month period ended
August 30, 2003 is $57.7 million and (2) and for any subsequent twelve-month
period for which financial statements are available is not less than $55.0
million and (B) such previously discussed adjustments to Consolidated Adjusted
EBITDA are (1) $3.7 million for the twelve-month period ended August 30, 2003
and (2) $5.2 million for any subsequent twelve-month period for which financial
statements are available.
(v) Completion of Proceedings. All partnership, corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent and its counsel shall be reasonably
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2. CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each Lender to
make any Loan, or Issuing Bank to issue any Letter of Credit, on any Credit
Date, including the Closing Date, are subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions precedent:
(i) Administrative Agent shall have received a fully
executed and delivered Funding Notice or Issuance Notice, as the case
may be;
(ii) after making the Credit Extensions requested on
such Credit Date, the Total Utilization of Revolving Commitments shall
not exceed the Revolving Commitments then in effect;
(iii) as of such Credit Date, the representations and
warranties contained herein and in the other Credit Documents shall be
true and correct in all material respects on and as of that Credit Date
to the same extent as though made on and as of that date,
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except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on
and as of such earlier date;
(iv) as of such Credit Date, no event shall have
occurred and be continuing or would result from the consummation of the
applicable Credit Extension that would constitute an Event of Default
or a Default;
(v) on or before the date of issuance of any Letter
of Credit, Administrative Agent shall have received all other
information required by the applicable Issuance Notice, and such other
documents or information as Issuing Bank may reasonably require in
connection with the issuance of such Letter of Credit; and
(vi) after giving effect to such Credit Extension the
aggregate Cash and Cash Equivalents of Holdings and its Subsidiaries
will not exceed $12.5 million.
Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of any Credit Extension, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of
any of the foregoing if, in the good faith judgment of such Agent or Requisite
Lender such request is warranted under the circumstances.
(b) Notices. Any Notice shall be executed by an Authorized
Officer in a writing delivered to Administrative Agent. In lieu of delivering a
Notice, the Company may give Administrative Agent telephonic notice by the
required time of any proposed borrowing, conversion/continuation or issuance of
a Letter of Credit, as the case may be; provided each such notice shall be
promptly confirmed in writing by delivery of the applicable Notice to
Administrative Agent on or before the applicable date of borrowing,
continuation/conversion or issuance. Neither Administrative Agent nor any Lender
shall incur any liability to the Company in acting upon any telephonic notice
referred to above that Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized on behalf of the
Company or for otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Issuing Bank to enter into this
Agreement and to make each Credit Extension to be made thereby, each Credit
Party represents and warrants to each Lender and Issuing Bank, on the Closing
Date and on each Credit Date, that the following statements are true and correct
(it being understood and agreed that the representations and warranties made on
the Closing Date are deemed to be made concurrently with the consummation of the
Transactions contemplated hereby):
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each
of Holdings and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry
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out the transactions contemplated thereby, and (c) is qualified to do business
and in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had, and could not be reasonably expected to have, a Material Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of Holdings
and its Subsidiaries has been duly authorized and validly issued and is fully
paid and non-assessable. Except as set forth on Schedule 4.2, as of the date
hereof, there is no existing option, warrant, call, right, commitment or other
agreement to which Holdings or any of its Subsidiaries is a party requiring, and
there is no membership interest or other Capital Stock of Holdings or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Holdings or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Holdings or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Holdings or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Holdings and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date both before and after giving effect to the
Acquisition.
4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4. NO CONFLICT. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, any of the Organizational
Documents of Holdings or any of its Subsidiaries, or any order, judgment or
decree of any court or other agency of government binding on Holdings or any of
its Subsidiaries; (b) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any Contractual Obligation
of Holdings or any of its Subsidiaries; (c) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Holdings or any
of its Subsidiaries (other than any Liens created under any of the Credit
Documents in favor of Collateral Agent, on behalf of Secured Parties); or (d)
require any approval of stockholders, members or partners or any approval or
consent of any Person under any Contractual Obligation of Holdings or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders.
4.5. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except as otherwise set
forth in the Merger Agreement, and except for filings and recordings with
respect to the Collateral to be made, or otherwise delivered to Collateral Agent
for filing and/or recordation, as of the Closing Date.
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4.6. BINDING OBLIGATION. Each Credit Document has been duly executed
and delivered by each Credit Party that is a party thereto and is the legally
valid and binding obligation of such Credit Party, enforceable against such
Credit Party in accordance with its respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles relating
to enforceability.
4.7. HISTORICAL FINANCIAL STATEMENTS. The Historical Financial
Statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position, on a consolidated basis, of the
Persons described in such financial statements as at the respective dates
thereof and the results of operations and cash flows, on a consolidated basis,
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments and in the case of interim
statements, the absence of footnotes. As of the Closing Date, neither Holdings
nor any of its Subsidiaries has any contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the Historical Financial Statements or the notes thereto and which in any
such case is material in relation to the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings and any of
its Subsidiaries taken as a whole.
4.8. PROJECTIONS. On and as of the Closing Date, the Projections of
Holdings and its Subsidiaries for the period Fiscal Year 2004 through and
including Fiscal Year 2011 (the "PROJECTIONS") are based on good faith estimates
and assumptions made by the management of Holdings; provided, the Projections
are not to be viewed as facts and that actual results during the period or
periods covered by the Projections may differ from such Projections and that the
differences may be material; provided further, as of the Closing Date,
management of Holdings believed that the Projections were reasonable and
attainable.
4.9. NO MATERIAL ADVERSE CHANGE. Since the date of the most recent
audited financial statements completed prior to the Closing Date, no event,
circumstance or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect.
4.10. NO RESTRICTED JUNIOR PAYMENTS. Since the date of the most recent
audited financial statements completed prior to the Closing Date, neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.5.
4.11. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Certain Adverse Proceedings are listed on Schedule 4.11
hereto. Neither Holdings nor any of its Subsidiaries (a) is in violation of any
applicable laws (including Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, or
(b) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental
74
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
4.12. PAYMENT OF TAXES. Except as otherwise permitted under Section
5.3, all tax returns and reports of Holdings and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon Holdings and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable. Holdings knows of no proposed tax assessment against
Holdings or any of its Subsidiaries which is not being contested by Holdings or
such Subsidiary in good faith and by appropriate proceedings; provided, such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
4.13. PROPERTIES.
(a) Title. Each of Holdings and its Subsidiaries has, subject
to Permitted Liens, (i) good, sufficient and legal title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), and (iii) good title to (in
the case of all other personal property), all of their respective properties and
assets reflected in their respective Historical Financial Statements referred to
in Section 4.5 and in the most recent financial statements delivered pursuant to
Section 5.1, in each case except for assets disposed of since the date of such
financial statements in the ordinary course of business or as otherwise
permitted under Section 6.9. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13
contains a true, accurate and complete list of (i) all Real Estate Assets, and
(ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Estate Asset of any Credit Party, regardless of whether such
Credit Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Each agreement
listed in clause (ii) of the immediately preceding sentence is in full force and
effect and Holdings does not have knowledge of any default that has occurred and
is continuing thereunder, and to Holdings' knowledge, each such agreement
constitutes the legally valid and binding obligation of each applicable Credit
Party, enforceable against such Credit Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
4.14. ENVIRONMENTAL MATTERS. Neither Holdings nor any of its
Subsidiaries nor any of their respective past or present Facilities or
operations are subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to any Environmental Law, any
Environmental Claim, or any Hazardous Materials Activity that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect. Neither Holdings nor any of its Subsidiaries has either been notified in
writing by a Governmental Agency or by any other Person that it may be a
potentially responsible party or received any letter or request
75
for information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9604) or any comparable state
law which could reasonably be expected to have a Material Adverse Effect. Except
as set forth on Schedule 4.14, there are and, to each of Holdings' and its
Subsidiaries' knowledge, have been, no conditions, occurrences, or Hazardous
Materials Activities which could reasonably be expected to form the basis of an
Environmental Claim against Holdings or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries nor, to
any Credit Party's knowledge, any predecessor of Holdings or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past or
present treatment of Hazardous Materials at any Facility, and none of Holdings'
or any of its Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent except as set forth on Schedule 4.14.
Compliance with all current or reasonably foreseeable future or pending
requirements pursuant to or under Environmental Laws could not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
Except as set forth on Schedule 4.14, no event or condition has occurred or is
occurring with respect to Holdings or any of its Subsidiaries relating to any
Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity which individually or in the aggregate has had, or could
reasonably be expected to have, a Material Adverse Effect.
4.15. NO DEFAULTS. Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
4.16. MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder.
4.17. GOVERNMENTAL REGULATION. Neither Holdings nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. Neither Holdings nor any of its Subsidiaries
is a "registered investment company" or a company "controlled" by a "registered
investment company" or a "principal underwriter" of a "registered investment
company" as such terms are defined in the Investment the Company Act of 1940.
4.18. MARGIN STOCK. Neither Holdings nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Loans made to such Credit Party will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock or for any purpose that
76
violates, or is inconsistent with, the provisions of Regulation T, U or X of
said Board of Governors.
4.19. EMPLOYEE MATTERS. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries, or to the knowledge of Holdings and
the Company, threatened against any of them before the National Labor Relations
Board and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement that is so pending against Holdings or any of
its Subsidiaries or to the knowledge of Holdings and the Company, threatened
against any of them, (b) no strike or work stoppage in existence or to the
knowledge of Holdings threatened involving Holdings or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect, and (c) to
the knowledge of Holdings and the Company, no union representation question
existing with respect to the employees of Holdings or any of its Subsidiaries
and, to the knowledge of Holdings and the Company, no union organization
activity that is taking place, except (with respect to any matter specified in
clause (a), (b) or (c) above, either individually or in the aggregate) such as
is not reasonably likely to have a Material Adverse Effect.
4.20. EMPLOYEE BENEFIT PLANS. Holdings and each of its Subsidiaries are
in compliance with all applicable provisions and requirements of ERISA and the
Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan except as would not
reasonably be expected to cause a Material Adverse Effect. Each Employee Benefit
Plan which is intended to qualify under Section 401(a) of the Internal Revenue
Code has received a favorable determination letter from the Internal Revenue
Service indicating that such Employee Benefit Plan is so qualified and nothing
has occurred subsequent to the issuance of such determination letter which would
reasonably be expected to cause such Employee Benefit Plan to lose its qualified
status. No liability to the PBGC (other than required premium payments), the
Internal Revenue Service, any Employee Benefit Plan (other than the payment of
benefits in the ordinary course) or any trust established under Title IV of
ERISA has been or is expected to be incurred by Holdings, any of its
Subsidiaries except as would not reasonably be expected to cause a Material
Adverse Effect. No liability to the PBGC or any trust established under Title IV
of ERISA has been, or is reasonably expected to be, incurred by any ERISA
Affiliate of Holdings or any of its Subsidiaries, except as would not reasonably
be expected to cause a Material Adverse Effect. No ERISA Event has occurred or
is reasonably expected to occur except as would not reasonably be expected to
cause a Material Adverse Effect. Except to the extent required under Section
4980B of the Internal Revenue Code or similar state laws or as set forth on
Schedule 4.20, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates. Holdings, each of its Subsidiaries and each of their ERISA
Affiliates have complied in all material respects with the requirements of
Section 515 of ERISA with respect to each Multiemployer Plan and are not in
material "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan.
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4.21. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
4.22. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.23. RELATED AGREEMENTS.
(a) Delivery. Holdings and the Company have delivered to
Administrative Agent complete and correct copies of (i) each Related Agreement
and of all exhibits and schedules thereto as of the date hereof and (ii) copies
of any material amendment, restatement, supplement or other modification to or
waiver of each Related Agreement entered into after the date hereof.
(b) Representations and Warranties. Except to the extent
otherwise expressly set forth herein or in the schedules hereto, and subject to
the qualifications set forth therein, each of the representations and warranties
given by any Credit Party in any Related Agreement is true and correct in all
material respects as of the Closing Date (or as of any earlier date to which
such representation and warranty specifically relates). Notwithstanding anything
in the Related Agreement to the contrary, the representations and warranties of
each Credit Party set forth in this Section 4.23 shall, solely for purposes
hereof, survive the Closing Date for the benefit of Lenders.
(c) Governmental Approvals. All Governmental Authorizations
and all other authorizations, approvals and consents of any other Person
required by the Related Agreements or to consummate the Transactions have been
obtained and are in full force and effect.
(d) Conditions Precedent. On the Closing Date, (i) all of the
conditions to effecting or consummating the Transactions set forth in the
Related Agreements have been duly satisfied or, with the consent of
Administrative Agent waived, and (ii) the Related Transactions have been
consummated in accordance with the Related Agreements and all applicable laws.
4.24. COMPLIANCE WITH STATUTES, ETC. Each of Holdings and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
property (including compliance with all applicable Environmental Laws with
respect to any Real Estate Asset or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Estate Asset or the operations of Holdings or any of its Subsidiaries),
except such non-compliance that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
4.25. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Holdings or any of
its Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to
78
state a material fact (known to Holdings or the Company, in the case of any
document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Holdings or the Company to be reasonable
at the time made, it being recognized by Lenders that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected
results. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to Holdings or the Company (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
4.26. SUBORDINATION. DESIGNATION OF THE CREDIT DOCUMENTS AS "DESIGNATED
SENIOR DEBT"; ETC.
(a) (i) The subordination provisions contained in documents
governing the Senior Subordinated Notes or the Refinancing Notes are enforceable
against Holdings, the Company and any of its Subsidiaries party thereto and the
holders of such Indebtedness, and (ii) all Obligations of the Credit Parties (to
the extent they are obligors with respect to Senior Subordinated Notes or the
Refinancing Notes) hereunder and in the other Credit Documents are within the
definitions of "Designated Senior Debt" and "Senior Indebtedness" included in
the respective subordination provisions. In addition, the Company hereby
designates the Obligations under this Agreement as "Designated Senior
Indebtedness" for the purposes of the definition of "Designated Senior
Indebtedness" contained in the Senior Subordinated Notes and the Refinancing
Notes.
(b) All incurrences of Loans and issuances of Letters of
Credit as permitted under this Agreement are, and when incurred or issued will
be, permitted under (and shall give rise to no breach or violation of any of)
the AA Notes, CB Notes, the Senior Subordinated Notes or the Refinancing Notes.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Commitment
is in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, each Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. The Company will deliver
to Administrative Agent (and Administrative Agent shall promptly deliver to each
Lender):
(a) Monthly Reports. As soon as available, and in any event
within thirty (30) days after the end of each month ending after the Closing
Date, the consolidated balance sheet of
79
the Company and its Subsidiaries as at the end of such month and the related
consolidated statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, to the extent prepared on a
monthly basis, all in reasonable detail, together with a Financial Officer
Certification with respect thereto (it being understood that such monthly
statements are not, for this purpose, required to be prepared in accordance with
GAAP);
(b) Quarterly Financial Statements. As soon as available, and
in any event within forty-five days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated balance sheets of the
Company and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of income, stockholders' equity and cash flows
of the Company 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, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year, all
in reasonable detail, together with a Financial Officer Certification and a
Narrative Report with respect thereto;
(c) Annual Financial Statements. As soon as available, and in
any event within one hundred-five (105) days after the end of each Fiscal Year,
(i) the consolidated balance sheets of the Company and its Subsidiaries as at
the end of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements, in
reasonable detail, together with a Financial Officer Certification and a
Narrative Report with respect thereto; and (ii) with respect to such
consolidated financial statements a report thereon of Deloitte & Touche LLP or
other independent certified public accountants of recognized national standing
selected by the Company, and reasonably satisfactory to Administrative Agent
(which report shall be unqualified as to going concern and scope of audit, and
shall state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of the Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards) together with a written statement by such
independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Credit Documents, (2)
whether, in connection therewith, any condition or event that constitutes a
Default or an Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof, and (3) that nothing has come to their attention that
causes them to believe that the information contained in any Compliance
Certificate is not
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correct or that the matters set forth in such Compliance Certificate are not
stated in accordance with the terms hereof;
(d) Compliance Certificate. Together with each delivery of
financial statements of the Company and its Subsidiaries pursuant to Sections
5.1(b) and 5.1(c), a duly executed and completed Compliance Certificate;
(e) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of the Company and its Subsidiaries delivered
pursuant to Section 5.1(b) or 5.1(c) will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant to
such subdivisions had no such change in accounting principles and policies been
made, then, together with the first delivery of such financial statements after
such change, one or more statements of reconciliation for all such prior
financial statements in form and substance reasonably satisfactory to
Administrative Agent;
(f) Notice of Default. Promptly upon any officer of Holdings
or the Company obtaining knowledge (i) of any condition or event that
constitutes a Default or an Event of Default or that notice has been given to
Holdings or the Company with respect thereto; (ii) that any Person has given any
notice to Holdings or any of its Subsidiaries or taken any other action with
respect to any event or condition set forth in Section 8.1(b); (iii) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, a certificate of its
Authorized Officers specifying the nature and period of existence of such
condition, event or change, or specifying the notice given and action taken by
any such Person and the nature of such claimed Event of Default, Default,
default, event or condition, and what action the Company has taken, is taking
and proposes to take with respect thereto or (iv) that any Person has given any
notice to Holdings or any of its Subsidiaries or taken any other action with
respect to any condition or event that constitutes a default under any lease of
a Real Estate Asset subject to a Mortgage;
(g) Notice of Litigation. Promptly upon any officer of
Holdings or the Company obtaining knowledge of (i) the institution of, or
non-frivolous threat of, any Adverse Proceeding not previously disclosed in
writing by the Company to Lenders, or (ii) any material development in any
Adverse Proceeding that, in the case of either (i) or (ii) if adversely
determined, could be reasonably expected to have a Material Adverse Effect, or
seeks to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated hereby,
written notice thereof together with such other information as may be reasonably
available to Holdings or the Company to enable Lenders and their counsel to
evaluate such matters;
(h) ERISA. (i) Promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Holdings or any of its Subsidiaries or any of their
then-existing ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
81
thereto; and (ii) with reasonable promptness, copies of (1) all notices received
by Holdings or any of its Subsidiaries or any of their then-existing ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (2)
copies of such other documents or governmental reports or filings relating to
any Employee Benefit Plan (including without limitation any Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by
Holdings, any of its Subsidiaries or any of their then-existing ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan) as
Administrative Agent shall reasonably request;
(i) Financial Plan. As soon as practicable and in any event no
later than thirty days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and each Fiscal Year (or
portion thereof) through the final maturity date of the Loans (a "FINANCIAL
PLAN"), including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of the Company and its
Subsidiaries for each such Fiscal Year, together with pro forma Compliance
Certificates for each such Fiscal Year and an explanation of the assumptions on
which such forecasts are based, and (ii) forecasted consolidated statements of
income and cash flows of the Company and its Subsidiaries for each month of the
first Fiscal Year included in the Financial Plan;
(j) Insurance Report. As soon as practicable and in any event
by no later than five (5) Business Days after the annual renewal date, a summary
report in form and substance reasonably satisfactory to Administrative Agent
outlining all material insurance coverage maintained as of the date of such
report by Holdings and its Subsidiaries and all material insurance coverage
planned to be maintained by Holdings and its Subsidiaries in the immediately
succeeding Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Holdings or the Company;
(l) Notice Regarding Material Contracts. Promptly, and in any
event within ten Business Days (i) after any Material Contract of Holdings or
any of its Subsidiaries is terminated or amended in a manner that is materially
adverse to Holdings or such Subsidiary, as the case may be, or (ii) any new
Material Contract is entered into, a written statement describing such event,
with copies of such material amendments or new contracts, delivered to
Administrative Agent (to the extent such delivery is permitted by the terms of
any such Material Contract, provided, no such prohibition on delivery shall be
effective if it were bargained for by Holdings or its applicable Subsidiary with
the intent of avoiding compliance with this Section 5.1(l)), and an explanation
of any actions being taken with respect thereto;
(m) Environmental Reports and Audits. As soon as practicable
following receipt thereof, copies of all environmental audits and reports with
respect to environmental matters at any Facility (including any Phase I Reports)
or which relate to any environmental liabilities of Holdings or its Subsidiaries
which, in any such case, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect;
82
(n) Information Regarding Collateral. (a) The Company will
furnish to Collateral Agent prompt written notice of any change (i) in any
Credit Party's organizational name, (ii) in any Credit Party's identity or
organizational structure (iii) in any Credit Party's jurisdiction of
organization (to the extent permitted by the Pledge and Security Agreement) or
(iv) in any Credit Party's Federal Taxpayer Identification Number or
organizational identification number. Company agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected security interest in all the Collateral and for the
Collateral at all times following such change to have a valid, legal and
perfected security interest as contemplated in the Collateral Documents. Company
also agrees promptly to notify Collateral Agent if any material portion of the
Collateral is damaged or destroyed;
(o) Annual Collateral Verification. Each year, at the time of
delivery of annual financial statements with respect to the preceding Fiscal
Year pursuant to Section 5.1(c), the Company shall deliver to Collateral Agent
an Officer's Certificate either confirming that there has been no change in such
information since the date of the Collateral Questionnaire delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section and/or identifying such changes; and
(p) Other Information. (A) Promptly upon their becoming
available, copies of (i) all financial statements, reports, notices and proxy
statements sent or made available generally by Holdings to its security holders
acting in such capacity or by any Subsidiary of Holdings to its security holders
other than Holdings or another Subsidiary of Holdings, (ii) all regular and
periodic reports and all registration statements and prospectuses, if any, filed
by Holdings or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, (iii) all press releases and other statements made available
generally by Holdings or any of its Subsidiaries to the public concerning
material developments in the business of Holdings or any of its Subsidiaries,
and (B) such other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by Administrative
Agent or any Lender.
Documents required to be delivered pursuant to Sections
5.1(a), 5.1(b), 5.1(c), 5.1(e) or 5.1(i) may be delivered electronically, and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Company posts such documents or provides a link thereto on the Company's
website on the Internet at the website address listed on Appendix B; or (ii) on
which such documents are posted on the Company's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided, however,
that: (x) the Company shall deliver paper copies of such documents to the
Administrative Agent until a written request to cease delivering paper copies is
given by the Administrative Agent and (y) the Company shall notify (which may be
by facsimile or electronic mail) the Administrative Agent of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Company shall be required to
provide paper copies of the Compliance Certificates to the Administrative Agent.
Except for
83
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Company with any such request for delivery.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, no Credit
Party or any of its Subsidiaries shall be required to preserve any such right or
franchise, licenses and permits if the preservation thereof is no longer
desirable in the conduct of the business of such Person, and that the loss
thereof is not disadvantageous in any material respect to such Person or to
Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will
cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, and (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax or claim. No
Credit Party will, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than Holdings or any of its Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Holdings and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5.5. INSURANCE. Holdings will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Holdings and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Holdings will
maintain or cause to be maintained (a) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, (b) the
pollution legal liability insurance policy presently in effect providing for
$10,000,000 of coverage relating to Environmental Claims at
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the Facility located in Dallas, Texas, and (c) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses. Each such
policy of insurance shall (i) name Collateral Agent, on behalf of the Secured
Parties as an additional insured thereunder as its interests may appear and (ii)
in the case of each casualty insurance policy contain a loss payable clause or
endorsement, reasonably satisfactory in form and substance to Collateral Agent,
that names Collateral Agent, on behalf of the Secured Parties as the loss payee
thereunder for any covered loss in excess of $500,000 and provides for at least
thirty days' prior written notice to Collateral Agent of any modification or
cancellation of such policy.
5.6. INSPECTIONS. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of any Credit Party and any of its
respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested; provided, however, that each Lender
shall at all times coordinate with the Administrative Agent regarding the
frequency and timing of such visits and inspections so as to reasonably minimize
the burden imposed on the Credit Parties.
5.7. LENDERS MEETINGS. Holdings and the Company will, upon the request
of Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at the
Company's corporate offices (or at such other location as may be agreed to by
the Company and Administrative Agent) at such time as may be agreed to by the
Company and Administrative Agent.
5.8. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall
cause each of its Subsidiaries and all other Persons, if any, on or occupying
any Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Holdings will deliver to
Administrative Agent:
(i) as soon as practicable following receipt thereof,
copies of all environmental audits, investigations, analyses and
reports (including any Phase I Reports) of any kind or character,
whether prepared by personnel of Holdings or any of its Subsidiaries or
by independent consultants, Governmental Authorities or any other
Persons, with respect to significant environmental matters at any
Facility or with respect to any Environmental Claims;
85
(ii) promptly upon the occurrence thereof, written
notice describing in reasonable detail (1) any Release required to be
reported to any Governmental Authority under any applicable
Environmental Laws other than any report (A) in the ordinary course of
business required under any Environmental Law (or any Governmental
Authorization issued thereunder) and (B) in material compliance with
Environmental Law and that does not have a reasonable possibility of
becoming an Environmental Claim which could reasonably be expected to
have a Material Adverse Effect, (2) any remedial action taken by
Holdings or any other Person in response to (A) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (B) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect, and (3) Holdings
or the Company's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause
such Facility or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws;
(iii) as soon as practicable following the sending or
receipt thereof by Holdings or any of its Subsidiaries, a copy of any
and all written communications with respect to (1) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of giving rise to a Material Adverse Effect, and (2) any
request for information from any Governmental Authority that suggests
such Governmental Authority is investigating whether Holdings or any of
its Subsidiaries may be potentially responsible for any Hazardous
Materials Activity;
(iv) prompt written notice describing in reasonable
detail (1) any proposed acquisition of stock, assets, or property by
Holdings or any of its Subsidiaries that could reasonably be expected
to (A) expose Holdings or any of its Subsidiaries to, or result in,
Environmental Claims that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or (B)
affect the ability of Holdings or any of its Subsidiaries to maintain
in full force and effect all material Governmental Authorizations
required under any Environmental Laws for their respective operations
and (2) any proposed action to be taken by Holdings or any of its
Subsidiaries to modify current operations in a manner that could
reasonably be expected to subject Holdings or any of its Subsidiaries
to any additional material obligations or requirements under any
Environmental Laws; and
(v) with reasonable promptness, such other documents
and information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to
this Section 5.9(a).
(b) Hazardous Materials Activities. Each Credit Party shall,
at its sole cost and expense, promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all actions necessary to (i) cure any
violation of applicable Environmental Laws by such Credit Party or its
Subsidiaries that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, (ii) reasonably effectuate remediation of
any Hazardous
86
Materials in, on, under or from any Facility or otherwise related to any
Hazardous Material Activity which could reasonably be expected to have a
Material Adverse Effect that may be required (A) under any Environmental Law or
(B) under any reasonable written request of Administrative Agent, and (iii) make
an appropriate response to any Environmental Claim against such Credit Party or
any of its Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(c) Environmental Covenants. Each Credit Party will take, and
shall cause each of its Subsidiaries to take, such actions as reasonably
necessary to ensure that: (a) all uses and operations on or of any Facility
shall be in material compliance with all Environmental Laws and Governmental
Authorizations issued pursuant thereto; (b) there shall be no Releases of
Hazardous Materials in, on, under or from any Facility that would be reasonably
likely to result in an Environmental Claim which could reasonably be expected to
have a Material Adverse Effect; and (c) there shall be no Hazardous Materials
in, on, or under any Facility, except those that are both (i) in material
compliance with all Environmental Laws and with Governmental Authorizations
issued pursuant thereto, if and to the extent required, and (ii) in amounts not
in material excess of that reasonably necessary to operate the Facility for the
purposes set forth herein.
5.10. SUBSIDIARIES. In the event that any Person becomes a Domestic
Subsidiary of the Company, the Company shall (a) promptly cause such Domestic
Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and
Security Agreement by executing and delivering to Administrative Agent and
Collateral Agent a Counterpart Agreement, and (b) take all such actions and
execute and deliver, or cause to be executed and delivered, all such documents,
instruments, agreements, and certificates as are similar to those described in
Sections 3.1(b), 3.1(i), 3.1(j), 3.1(k) and 3.1(n). In the event that any Person
becomes a Foreign Subsidiary of the Company, and the ownership interests of such
Foreign Subsidiary are owned by the Company or by any Domestic Subsidiary
thereof, the Company shall, or shall cause such Domestic Subsidiary to, deliver,
all such documents, instruments, agreements, and certificates as are similar to
those described in Sections 3.1(b), and the Company shall take, or shall cause
such Domestic Subsidiary to take, all of the actions referred to in Section
3.1(j)(i) necessary to grant and to perfect a First Priority Lien in favor of
Collateral Agent, for the benefit of Secured Parties, under the Pledge and
Security Agreement in 65% of such ownership interests. With respect to each such
Subsidiary, the Company shall promptly send to Administrative Agent written
notice setting forth with respect to such Person (i) the date on which such
Person became a Subsidiary of the Company, and (ii) all of the data required to
be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of the
Company; provided, such written notice shall be deemed to supplement Schedule
4.1 and 4.2 for all purposes hereof.
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS. In the event that any
Credit Party acquires a Material Real Estate Asset or a Real Estate Asset owned
or leased on the Closing Date becomes a Material Real Estate Asset and such
interest has not otherwise been made subject to the Lien of the Collateral
Documents in favor of Collateral Agent, for the benefit of Secured Parties, then
such Credit Party, as soon as practical after and, in any event, no later than
30 days after acquiring such Material Real Estate Asset, shall take all such
actions and execute and
87
deliver, or cause to be executed and delivered, all such mortgages, documents,
instruments, agreements, opinions and certificates similar to those described in
Sections 3.1(i), 3.1(j) and 3.1(k) with respect to each such Material Real
Estate Asset that Collateral Agent shall reasonably request to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid and, subject to
any filing and/or recording referred to herein, perfected First Priority
security interest in such Material Real Estate Assets. In addition to the
foregoing, the Company shall, at the request of Requisite Lenders, deliver, from
time to time, to Administrative Agent such appraisals as are required by law or
regulation of Real Estate Assets with respect to which Collateral Agent has been
granted a Lien.
5.12. INTEREST RATE PROTECTION. No later than sixty (60) days following
the Closing Date and at all times thereafter, the Company shall maintain, or
cause to be maintained, in effect one or more Interest Rate Agreements for a
term of not less than three (3) years and otherwise in form and substance
reasonably satisfactory to Administrative Agent, such that the amount of not
less than 50.0% of the aggregate principal amount of the total Indebtedness
(excluding Revolving Loans) of the Company and its Subsidiaries outstanding from
time to time (based on the assumption that such notional principal amount was a
Eurodollar Rate Loan with an Interest Period of three months) shall be either
(i) fixed rate Indebtedness or (ii) subject to Interest Rate Agreements
effectively limiting the Unadjusted Eurodollar Rate Component of the interest
costs to the Company to a rate reasonably acceptable to the Administrative
Agent. Notwithstanding the foregoing, the Company shall not be required to so
maintain such Interest Rate Agreements to the extent that the aggregate notional
principal amount of the Interest Rate Agreements of the Company and its
Subsidiaries otherwise required by this Section 5.12 is less than $5,000,000.
5.13. FURTHER ASSURANCES. At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent or Collateral Agent may reasonably
request to ensure that the Obligations are guarantied by the Guarantors and are
secured by substantially all of the assets of Holdings, and its Subsidiaries and
all of the outstanding Capital Stock of the Company and its Subsidiaries
(subject to limitations contained in the Credit Documents with respect to
Foreign Subsidiaries). In addition, each Credit Party will provide Lenders with
any information requested pursuant to Section 10.21.
5.14. CASH MANAGEMENT SYSTEMS. Holdings and its Subsidiaries shall
establish and maintain cash management systems reasonably acceptable to the
Administrative Agent. Such systems shall be outlined on Schedule 5.14 (as it may
be amended from time to time with the consent of the Administrative Agent).
5.15. CERTAIN POST-CLOSING OBLIGATIONS. (a) On or before May 31, 2004,
the Lenders shall have received from Holdings the pro forma consolidated balance
sheet of the Company and its Subsidiaries as at the Closing Date, and reflecting
the consummation of the Transactions, the related financings and the other
transactions contemplated by the Credit Documents to occur on or prior to the
Closing Date, which pro forma financial statements shall be in form satisfactory
to Administrative Agent.
88
(b) For the period of 120 days after the Closing Date, each
Credit Party shall use all its commercially reasonable efforts to obtain a
Landlord Consent and Estoppel and, upon receipt of same, executed by the
applicable landlord, the applicable Credit Party shall deliver a fully executed
and notarized Mortgage in proper form for recording in all appropriate places in
all appropriate jurisdictions in respect of each Leasehold Property (other than
those in respect of which such has already been delivered prior to the Closing
Date pursuant to Section 3.1(i)).
(c) Within 45 days after the Closing Date, Holdings shall
deliver to the Collateral Agent a survey in respect of the Austin Facility in
form sufficient to allow the title company to remove the survey exception.
(d) Within 10 Business Days after the Closing Date, to the
extent not delivered on the Closing Date, the Borrower shall deliver to the
Collateral Agent account control agreements, in form reasonably satisfactory to
the Collateral Agent, in respect of certain accounts maintained by the Credit
Parties at JPMorgan.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Commitment
is in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, such Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 6.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty,
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness of any Guarantor Subsidiary to the Company or
to any other Guarantor Subsidiary, or of the Company to any Guarantor
Subsidiary; provided, (i) all such Indebtedness shall be evidenced by promissory
notes and all such notes shall be subject to a First Priority Lien pursuant to
the Pledge and Security Agreement, (ii) all such Indebtedness shall be unsecured
and subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case, is reasonably satisfactory to
Administrative Agent, and (iii) any payment by any such Guarantor Subsidiary
under any guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any Indebtedness owed by such Subsidiary to the Company or to any
of its Subsidiaries for whose benefit such payment is made;
(c) Indebtedness incurred by Holdings or any of its
Subsidiaries arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from guaranties or letters of
credit, surety bonds or performance bonds securing the performance of the
Company or any such Subsidiary pursuant to such agreements, in connection with
Permitted Acquisitions or permitted dispositions of any business, assets or
Subsidiary of Holdings or any of its Subsidiaries;
89
(d) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
(e) Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(f) guaranties in the ordinary course of business of the
obligations of suppliers, customers, franchisees and licensees of Holdings and
its Subsidiaries;
(g) guaranties by the Company of Indebtedness of a Guarantor
Subsidiary or guaranties by a Subsidiary of the Company of Indebtedness of the
Company or a Guarantor Subsidiary with respect, in each case, to Indebtedness
otherwise permitted to be incurred pursuant to this Section 6.1;
(h) Indebtedness described in Schedule 6.1, but not any
extensions, renewals or replacements of such Indebtedness except (i) renewals
and extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this Agreement and (ii)
refinancings and extensions of any such Indebtedness if the terms and conditions
thereof are not less favorable to the obligor thereon or to the Lenders than the
Indebtedness being refinanced or extended, and the average life to maturity
thereof is greater than or equal to that of the Indebtedness being refinanced or
extended; provided, such Indebtedness permitted under the immediately preceding
clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that
was not an obligor with respect to the Indebtedness being extended, renewed or
refinanced, (B) exceed in a principal amount the Indebtedness being renewed,
extended or refinanced or (C) be incurred, created or assumed if any Default or
Event of Default has occurred and is continuing or would result therefrom;
(i) Indebtedness incurred in connection with the repurchase of
shares of the capital stock of Holdings as permitted by Section 6.5(g) in an
amount not to exceed $5,000,000 at any one time outstanding; provided that such
Indebtedness is evidenced by Subordinated Management Notes;
(j) Indebtedness, if any, under the Gold Consignment
Agreement;
(k) Indebtedness evidenced by any AA Notes not repurchased in
the Debt Tender in an aggregate amount principal amount not to exceed
$8,000,000;
(l) Until the earlier of (x) the consummation of the CB Call
and (y) the date falling 45 days after the Closing Date, Indebtedness evidenced
by the CB Notes;
(m) Indebtedness with respect to (i) Capital Leases in an
aggregate amount not to exceed at any time $15,000,000 when aggregated with
outstanding Indebtedness permitted pursuant to Section 6.1(n) and (ii) the
Existing Capital Leases;
(n) purchase money Indebtedness in an aggregate amount not to
exceed at any time $15,000,000 when aggregated with indebtedness pursuant to
clause (i) of Section 6.1(m)
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(including any Indebtedness acquired in connection with a Permitted
Acquisition); provided, any such Indebtedness (i) shall be secured only to the
asset acquired in connection with the incurrence of such Indebtedness, and (ii)
shall constitute not less than 75% of the aggregate consideration paid with
respect to such asset; and
(o) senior subordinated unsecured debt securities issued to
redeem the Senior Subordinated Notes in full, in an amount of up to the
aggregate outstanding principal amount of the Senior Subordinated Notes (but in
any event not to exceed $150,000,000) plus any reasonable and customary
transaction costs and fees (approved by the Administrative Agent) and required
premium incurred in connection therewith (the "REFINANCING NOTES"); provided
that the proceeds thereof are used to prepay or redeem the Senior Subordinated
Notes and/or prepay the Term Loans, or a portion thereof, and reasonable and
customary fees, commissions, legal fees and other costs and expenses incurred in
connection with such issuance and redemption or prepayment; provided further
that (i)(A) the terms of such additional Indebtedness shall not contain any
cross-default provisions (other than for material non-payment, and may include a
cross-acceleration provision), (B) the terms of such additional Indebtedness
shall not contain any financial maintenance covenants, (C) such additional
Indebtedness shall not be secured by any asset of Company or any of its
Subsidiaries (other than restricted Cash or Cash Equivalents allocated from the
funds representing such Indebtedness securing prefunded interest payments), (D)
no portion of the principal of such additional Indebtedness shall be scheduled
to be redeemed, repurchased or otherwise repaid or prepaid (other than as a
result of a change of control, acceleration or such other provision as shall be
customary for comparable high-yield debt securities) prior to the date that is
six months after the Term Loan Maturity Date, and (E) such Indebtedness shall
otherwise, taken as a whole, be on terms no less favorable to the Lenders than
the terms of the Senior Subordinated Notes; and (ii) after giving effect to the
incurrence of such Indebtedness, (A) Company and its Subsidiaries shall be in
pro forma compliance with the financial covenants set forth in Section 6.8 and
(B) no Default or Event of Default shall exist or would result therefrom;
(p) Indebtedness under Hedge Agreements or any commodities
hedging agreement entered into for the purpose of hedging risks associated with
Holdings' and its Subsidiaries' operations and not for speculative purposes;
(q) (i) Indebtedness of any Foreign Subsidiary, consisting of
local lines of credit incurred in the ordinary course of business of such
Foreign Subsidiary and not guaranteed by a Guarantor Subsidiary, in an aggregate
amount not to exceed at any time the U.S. dollar equivalent of $5,000,000 and
(ii) Indebtedness of any Foreign Subsidiary, consisting of an Investment made by
a Credit Party to such Foreign Subsidiary as permitted by Section 6.7(j); and
(r) other unsecured Indebtedness of Holdings and its
Subsidiaries in an aggregate amount not to exceed at any time $7,500,000.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or
91
any income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the UCC of any
State or under any similar recording or notice statute, except:
(a) Liens in favor of Collateral Agent for the benefit of
Secured Parties granted pursuant to any Credit Document;
(b) Liens for Taxes not then due or if due if obligations with
respect to such Taxes are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted;
(c) statutory Liens of landlords, banks (and rights of
set-off), of carriers, warehousemen, mechanics, repairmen, workmen and
materialmen, and other Liens imposed by law (other than any such Lien imposed
pursuant to Section 401 (a)(29) or 412(n) of the Internal Revenue Code or by
ERISA), in each case incurred in the ordinary course of business (i) for amounts
not yet overdue or (ii) for amounts that are overdue and that are being
contested in good faith by appropriate proceedings, so long as such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made for any such contested amounts;
(d) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not and
will not interfere in any material respect with the ordinary conduct of the
business of Holdings or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any
lease of real estate permitted hereunder and any restriction, lien or
encumbrance that the interest or title of such lessor or sublessor may be
subject to;
(g) Liens solely on any cash earnest money deposits made by
Holdings or any of its Subsidiaries in connection with any letter of intent or
purchase agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary
UCC financing statements relating solely to operating leases of personal
property entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods;
92
(j) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of any real
property;
(k) (i) licenses of patents, trademarks and other intellectual
property rights granted by Holdings or any of its Subsidiaries in the ordinary
course of business and not interfering in any respect with the ordinary conduct
of the business of the Company or such Subsidiary and (ii) leases or subleases
granted by Holdings or any of its Subsidiaries to third parties in respect of
surplus property which is not fundamental to the operation of the business in
the ordinary course of business; provided that such leases and subleases are on
arms-length, commercial terms and otherwise satisfactory to the Administrative
Agent;
(l) Liens described in Schedule 6.2 or on a title report
delivered pursuant to Section 3.1(i)(iii);
(m) Liens securing Indebtedness permitted pursuant to 6.1(m)
and 6.1(n); provided, any such Lien shall encumber only the asset acquired with
the proceeds of such Indebtedness;
(n) Liens securing Indebtedness of Foreign Subsidiaries
permitted pursuant to Section 6.1(q) and (r) provided that such Liens only
attach to the assets of Foreign Subsidiaries;
(o) Liens securing judgments for the payment of money (except
to the extent giving rise to an Event of Default under Section 8.1(h);
(p) Liens that are contractual rights of setoff (i) relating
to the establishment of depository relations with banks not given in connection
with the issuance of Indebtedness or (ii) pertaining to pooled deposit and/or
sweep accounts of the Company and/or any Subsidiary of the Company to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of the Company and the Subsidiaries of the Company;
(q) (i) ownership interests of Persons who consign gold to the
Company or its Subsidiaries in the ordinary course of business; provided that
the interests of such Person are limited to such consigned gold and (ii) Liens
on gold and certain other Collateral approved by the Administrative Agent
granted pursuant to the Gold Consignment Agreement so long as the Collateral
Agent is granted a second Lien on such collateral and so long as the holder of
such Liens and the Collateral Agent shall have entered into an intercreditor
agreement with respect to such Liens on terms satisfactory to the Collateral
Agent; and
(r) other Liens securing Indebtedness in an aggregate amount
not to exceed $2,500,000 at any time outstanding.
6.3. EQUITABLE LIEN. If any Credit Party or any of its Subsidiaries
shall create or assume any Lien upon any of its properties or assets, whether
now owned or hereafter acquired, other than Permitted Liens, it shall make or
cause to be made effective provisions whereby the Obligations will be secured by
such Lien equally and ratably with any and all other Indebtedness secured
thereby as long as any such Indebtedness shall be so secured; provided,
notwithstanding
93
the foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.
6.4. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale; (b)
restrictions contained in agreements with respect to Indebtedness incurred by
Foreign Subsidiaries in accordance with this Agreement (provided that such
restrictions are limited to the property or assets of such Foreign Subsidiary
and its Subsidiaries); (c) restrictions contained in the Senior Subordinated
Notes Indenture; (d) restrictions by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be); (e) Liens permitted to be incurred under
Section 6.2 and restrictions in the agreements relating thereto that limit the
right of the Company to dispose of or transfer the assets subject to such Liens;
(f) provisions limiting the disposition or distribution of assets or property in
joint venture agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements, which limitation is applicable only to the assets that
are the subject of such agreements; (g) any encumbrance or restriction in
connection with an acquisition of property, so long as such encumbrance or
restriction relates solely to the property so acquired and was not created in
connection with or in anticipation of such acquisition; and (h) restrictions
imposed by customary provisions in partnership agreements, limited liability
company organizational governance documents, joint venture agreements and other
similar agreements that restrict the transfer of ownership interests in such
partnership, limited liability company, joint venture or similar Person, no
Credit Party nor any of its Subsidiaries shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
6.5. RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it
permit any of its Subsidiaries or Affiliates through any manner or means or
through any other Person to, directly or indirectly, declare, order, pay, make
or set apart, or agree to declare, order, pay, make or set apart, any sum for
any Restricted Junior Payment except that (a) the Company may make regularly
scheduled payments of interest in respect of Senior Subordinated Notes or
Refinancing Notes in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, the
indenture or other agreement pursuant to which such Subordinated Indebtedness
was issued; (b) the Company may prepay or redeem the Senior Subordinated Notes
in full with the proceeds of the Refinancing Notes; (c) so long as no Default or
Event of Default shall have occurred and be continuing or shall be caused
thereby, the Company may make Restricted Junior Payments to Holdings (i) in an
aggregate amount not to exceed $250,000 in any Fiscal Year, to the extent
necessary to permit Holdings to pay general administrative costs and expenses
and (ii) to the extent necessary to permit Holdings to discharge the
consolidated tax liabilities of Holdings and its Subsidiaries, in each case so
long as Holdings applies the amount of any such Restricted Junior Payment for
such purpose; (d) the Company may on the Closing Date pay a transaction fee to
the Sponsor pursuant to and as expressly required by the Management Agreement
and reimburse the Sponsor for reasonable out of pocket fees, costs and expenses
incurred in connection with the Transactions; (e) so long as no Default
94
or Event of Default pursuant to Sections 8.1(a), 8.1(f) or 8.1(g) shall have
occurred and be continuing or shall be caused thereby, the Company may pay the
Management Fees (plus reasonable expenses in connection with the Management
Agreement and unpaid amounts accrued for prior periods); (f) so long as no
Default or Event of Default shall have occurred and be continuing or shall be
caused thereby, the Company may repurchase the AA Notes which were not tendered
in connection with the Debt Tender; (g) so long as no Default or Event of
Default shall have occurred and be continuing or shall be caused thereby,
Holdings may purchase or redeem (and the Company may declare and pay dividends
or make other distributions to Holdings the proceeds of which are to be used by
Holdings to so purchase or redeem) Capital Stock of Holdings (including related
stock appreciation rights or similar securities) held by then present or former
officers or employees of Holdings, Company or any of their Subsidiaries or by
any Pension Plan upon such person's death, disability, retirement or termination
of employment or under the terms of any such Pension Plan or any other agreement
under which such shares of stock or related rights were issued; provided that
the aggregate amount of such Cash purchases or redemptions under this paragraph
(g) when added to the aggregate amount of principal, interest and any other Cash
amounts, if any, paid in respect of the Subordinated Management Notes, shall not
exceed in any Fiscal Year $500,000; (h) so long as no Default or Event of
Default shall have occurred and be continuing or shall be caused thereby,
Holdings may issue Subordinated Management Notes in lieu of the Cash purchases
and redemptions under paragraph (g) hereof and (i) Holdings may make on the
Closing Date the payments required by the Merger Agreement.
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided
herein, in the Senior Subordinated Notes Indenture or Refinancing Notes
Indenture or (with respect to encumbrances or restrictions on the ability of any
Foreign Subsidiary of Holdings only) in any documentation evidencing the local
lines of credit of Foreign Subsidiaries expressly permitted by Section 6.1(q) or
(r), no Credit Party shall, nor shall it permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of the
Company to (a) pay dividends or make any other distributions on any of such
Subsidiary's Capital Stock owned by the Company or any other Subsidiary of the
Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to the
Company or any other Subsidiary of the Company, (c) make loans or advances to
the Company or any other Subsidiary of the Company, or (d) transfer any of its
property or assets to the Company or any other Subsidiary of the Company other
than restrictions (i) in agreements evidencing Indebtedness permitted by Section
6.1(m) and (n) that impose restrictions on the property so acquired and (ii) by
reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses, joint venture agreements and similar
agreements entered into in the ordinary course of business, (iii) that are or
were created by virtue of any transfer of, agreement to transfer or option or
right with respect to any property, assets or Capital Stock not otherwise
prohibited under this Agreement; (iv) in any instrument governing Indebtedness
or Capital Stock of a Person acquired by the Company or any of its Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition),which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired; provided that,
in the case of Indebtedness, such Indebtedness was permitted by Section 6.1 to
be incurred; (v) in any
95
agreement for the sale or other disposition of a Subsidiary that restricts
distributions by that Subsidiary pending the sale or other disposition; and (vi)
in provisions in agreements or instruments which prohibit the payment of
dividends or the making of other distributions with respect to any class of
Capital Stock of a Person other than on a pro rata basis.
6.7. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any
Subsidiary and Investments made after the Closing Date in any wholly owned
Guarantor Subsidiaries of the Company;
(c) Investments (i) in any Securities received in satisfaction
or partial satisfaction thereof from financially troubled account debtors and
(ii) deposits, prepayments and other credits to suppliers made in the ordinary
course of business of Holdings and its Subsidiaries;
(d) intercompany loans to the extent permitted under Section
6.1(b) and intercompany guaranties to the extent permitted under Section 6.1(g);
(e) Consolidated Capital Expenditures permitted by Section
6.8(c);
(f) (i) loans and advances to employees of Holdings and its
Subsidiaries made in the ordinary course of business in an aggregate principal
amount not to exceed $500,000 in the aggregate at any one time outstanding and
(ii) loans and advances to sales representatives of Holdings and its
Subsidiaries made in the ordinary course of business in an aggregate principal
amount not to exceed $5,000,000 in the aggregate at any one time outstanding;
(g) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9;
(h) Investments described in Schedule 6.7;
(i) other Investments (excluding Investments in Foreign
Subsidiaries) in an aggregate amount not to exceed at any time $2,500,000;
(j) Investments in Foreign Subsidiaries of Holdings in an
aggregate amount not to exceed $5,000,000 per Fiscal Year; and
(k) Investments received in lieu of Cash in connection with
Asset Sales expressly permitted by Section 6.9.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
payment not otherwise permitted under the terms of Section 6.5.
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6.8. FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. The Company shall not permit the
Interest Coverage Ratio as of the last day of any Fiscal Quarter, beginning with
the Fiscal Quarter ending May 29, 2004, to be less than the correlative ratio
indicated:
INTEREST
FISCAL QUARTER ENDING COVERAGE RATIO
--------------------- --------------
May 29, 2004 through February 26, 2005 2.25:1.00
May 28, 2005 through February 25, 2006 2.40:1.00
May 27, 2006 through February 24, 2007 2.50:1.00
May 31, 2007 through February 23, 2008 2.75:1.00
May 31, 2008 through February 28, 2009 3.00:1.00
Thereafter 3.50:1.00
(b) Leverage Ratio. The Company shall not permit the Leverage
Ratio as of the last day of any Fiscal Quarter, beginning with the Fiscal
Quarter ending May 29, 2004, to exceed the correlative ratio indicated:
LEVERAGE
FISCAL QUARTER ENDING RATIO
--------------------- ---------
May 29, 2004 6.25:1.00
August 28, 2004 through February 26, 2005 5.95:1.00
May 28, 2005 5.75:1.00
August 27, 2005 through November 26, 2005 5.50:1.00
February 25, 2006 through May 27, 2006 5.25:1.00
August 26, 2006 through November 25, 2006 4.75:1.00
February 24, 2007 through May 26, 2007 4.50:1.00
August 25, 2007 through November 24, 2007 4.00:1.00
February 23, 2008 through May 31, 2008 3.75:1.00
August 30, 2008 through November 29, 2008 3.50:1.00
February 28, 2009 through May 30, 2009 3.25:1.00
Thereafter 3.00:1.00
(c) Maximum Consolidated Capital Expenditures. The Company
shall not, and shall not permit its Subsidiaries to, make or incur Consolidated
Capital Expenditures, in any period indicated below, in an aggregate amount for
the Company and its Subsidiaries in excess
97
of the corresponding amount set forth below opposite such Fiscal Year; provided,
such amount for any Fiscal Year shall be increased by an amount equal to 50% of
the excess, if any (without giving effect to any adjustment in accordance with
this proviso) over the actual amount of Consolidated Capital Expenditures for
the previous Fiscal Year:
CONSOLIDATED
PERIOD CAPITAL EXPENDITURES
------ --------------------
Closing Date to
August 31, 2004 $ 8,000,000
Fiscal Year 2005 $14,500,000
Fiscal Year 2006 $14,500,000
Any Fiscal Year $11,000,000
Thereafter
(d) Certain Calculations. With respect to any period during
which a Permitted Acquisition or an Asset Sale has occurred (each, a "SUBJECT
TRANSACTION"), for purposes of determining compliance with the financial
covenants set forth in this Section 6.8, Consolidated Adjusted EBITDA shall be
calculated with respect to such period on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to a specific
transaction or which are to be implemented by the business subject to that
transaction or by the Company and its Subsidiaries as a result of such
Transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission or as otherwise approved by the
Administrative Agent, which would include cost savings resulting from head count
reduction, closure of facilities and similar restructuring charges, which pro
forma adjustments shall be certified by the chief financial officer of the
Company) using the historical financial statements of any business so acquired
or to be acquired or sold or to be sold and the consolidated financial
statements of the Company and its Subsidiaries which shall be reformulated as if
such Subject Transaction, and any Indebtedness incurred or repaid in connection
therewith, had been consummated or incurred or repaid at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans incurred
during such period).
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, enter into
any transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease or
sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
assets or property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible, whether now owned or hereafter acquired, or
acquire by purchase or otherwise (other than purchases or other acquisitions of
inventory, materials, supplies, and equipment and Capital Expenditures in the
ordinary course of business) the business, property or fixed assets of, or
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stock or other evidence of beneficial ownership of, any Person or any division
or line of business or other business unit of any Person, except:
(a) any Subsidiary of Holdings may be merged with or into the
Company or any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or
all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series of
transactions, to the Company or any Guarantor Subsidiary; provided, in the case
of such a merger, the Company or such Guarantor Subsidiary, as applicable shall
be the continuing or surviving Person;
(b) sales or other dispositions of assets that do not
constitute Asset Sales;
(c) Asset Sales, the proceeds of which (valued at the
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) (i) are less than $25,000,000 when aggregated with the
proceeds of all other Asset Sales made within the same Fiscal Year; provided (1)
the consideration received for such assets shall be in an amount at least equal
to the fair market value thereof (determined in good faith by the board of
directors of the Company (or similar governing body)), (2) no less than 75%
thereof shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall
be applied as required by Section 2.14(a);
(d) disposals of obsolete, worn out or surplus property;
(e) Permitted Acquisitions, the consideration for which
constitutes less than $15,000,000 in the aggregate from the Closing Date to the
date of determination; provided that so long as the Leverage Ratio is less than
4.0:1.0, the Company may make Permitted Acquisitions the consideration for which
constitutes less than $25,000,000 in the aggregate from the Closing Date to the
date of determination; and
(f) Investments made in accordance with Section 6.7.
6.10. DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of all of
its interests in the Capital Stock of any of its Subsidiaries in compliance with
the provisions of Section 6.9, no Credit Party shall, nor shall it permit any of
its Subsidiaries to, (a) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any Capital Stock of any of its Subsidiaries,
except to qualify directors if required by applicable law; or (b) permit any of
its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
another Credit Party (subject to the restrictions on such disposition otherwise
imposed hereunder), or to qualify directors if required by applicable law.
6.11. SALES AND LEASE-BACKS. Unless the proceeds resulting from such
transaction are used to prepay Loans to the extent required by Section 2.14, no
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety
with respect to any lease of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, which such Credit Party (a) has sold or
transferred or is to sell or to transfer to any other Person (other than
Holdings or any of its
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Subsidiaries), or (b) intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by such Credit
Party to any Person (other than Holdings or any of its Subsidiaries) in
connection with such lease.
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of Capital Stock of Holdings or any of its
Subsidiaries or with any Affiliate of Holdings or of any such holder, on terms
that are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from a Person who is not such a holder
or Affiliate; provided, the foregoing restriction shall not apply to (a) any
transaction between the Company and any Guarantor Subsidiary; (b) reasonable and
customary fees paid to members of the board of directors (or similar governing
body) of Holdings and its Subsidiaries; (c) compensation arrangements for
officers and other employees of Holdings and its Subsidiaries entered into in
the ordinary course of business; (d) payment of or on account of the Management
Fee or similar fees payable to the Sponsor pursuant to the Management Agreement;
(e) transactions described in Schedule 6.12 and (f) transactions permitted under
Section 6.5(g).
6.13. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by such Credit Party on the
Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
6.14. PERMITTED ACTIVITIES OF HOLDINGS. Holdings shall not (a) incur,
directly or indirectly, any Indebtedness or any other obligation or liability
whatsoever other than the Indebtedness permitted under Section 6.1(i) and the
Management Fee and other obligations not constituting Indebtedness incurred in
the ordinary course of business as a holding company and not otherwise
restricted by this Section 6.14; (b) create or suffer to exist any Lien upon any
property or assets now owned or hereafter acquired by it other than the Liens
created under the Collateral Documents to which it is a party or permitted
pursuant to Section 6.2; (c) engage in any business or activity or own any
assets other than (i) holding 100% of the Capital Stock of the Company, (ii)
performing its obligations and activities incidental thereto under the Credit
Documents, and to the extent not inconsistent therewith, the Related Agreements;
and (iii) making Restricted Junior Payments and Investments to the extent
permitted by this Agreement; (d) consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any Person;
(e) sell or otherwise dispose of any Capital Stock of any of its directly owned
Subsidiaries; (f) create or acquire any Subsidiary or make or own any Investment
in any Person other than the Company; or (g) fail to hold itself out to the
public as a legal entity separate and distinct from all other Persons.
6.15. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Except as
set forth in Section 6.16, no Credit Party shall nor shall it permit any of its
Subsidiaries to, agree to any amendment, restatement, supplement or other
modification to, or waiver of, any of its rights under any Related Agreement
(other than agreements with respect to the Senior Subordinated Notes and
Refinancing Notes which are subject to the provisions of Section 6.16) after the
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Closing Date that would be materially adverse to the Company, any other Credit
Party, Administrative Agent or the Lenders or that would increase the fees or
other amounts payable under the Management Agreement.
6.16. AMENDMENTS OR WAIVERS OF WITH RESPECT TO SUBORDINATED
INDEBTEDNESS AND THE GOLD CONSIGNMENT AGREEMENT. (a) No Credit Party shall,
nor shall it permit any of its Subsidiaries to, amend or otherwise change the
terms of the Senior Subordinated Notes or Refinancing Notes, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on the Senior Subordinated
Notes or Refinancing Notes, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions of Senior Subordinated Notes (or of any
guaranty thereof), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
such Senior Subordinated Notes (or a trustee or other representative on their
behalf) which would be adverse to any Credit Party or Lenders.
(b) No Credit Party shall, nor shall it permit any of its
Subsidiaries to, change or amend the terms of the Gold Consignment Agreement if
the effect of such amendment is to (i) increase the "Maximum Dollar Amount", as
such term is defined in the Gold Consignment Agreement; (ii) change any event of
default or add or make more restrictive any covenant with respect thereto; (iii)
grant additional collateral (other than that in effect on the Closing Date); or
(iv) change or amend any other term if such change or amendment would (A)
materially increase the monetary obligations of the obligor or (B) confer
additional material rights on the holder of the Gold Consignment Agreement in a
manner adverse to the Lenders.
6.17. FISCAL YEAR. No Credit Party shall, nor shall it permit any of
its Subsidiaries to change its Fiscal Year-end from the last Saturday in August.
6.18. NO OTHER "DESIGNATED SENIOR INDEBTEDNESS". No Credit Party shall
designate, or permit the designation of, any Indebtedness (other than under this
Agreement or other Credit Documents or the Gold Consignment Agreement) as
"Designated Senior Debt" for the purposes of the definition of the same or the
subordination provisions contained in the Senior Subordinated Notes Indenture or
the Refinancing Note Indenture without the consent of Administrative Agent.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative Agent for the ratable benefit of the Beneficiaries
the due and punctual payment and performance in full of all Obligations when the
same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
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become due but for the operation of the automatic stay under Section 362(a) or
any other provision of the Bankruptcy Code, 11 U.S.C. Section 362(a))
(collectively, the "GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS. All Guarantors desire to allocate
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor's Aggregate Payments to equal
its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of the Company to
pay any of the Guaranteed Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) or any other provision of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), Guarantors will upon demand pay,
or cause to be paid, in Cash, to Administrative
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Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guaranteed Obligations then due as aforesaid,
accrued and unpaid interest on such Guaranteed Obligations (including interest
which, but for the Company's becoming the subject of a case under the Bankruptcy
Code, would have accrued on such Guaranteed Obligations, whether or not a claim
is allowed against the Company for such interest in the related bankruptcy case)
and all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional,
and constitute primary obligations of such Guarantor and not a contract of
surety to the maximum extent permitted by law and to the extent permitted by
applicable law shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guaranteed Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) the obligations of each Guarantor hereunder are
independent of the obligations of the Company and the obligations of any other
guarantor (including any other Guarantor) of the obligations of the Company, and
a separate action or actions may be brought and prosecuted against such
Guarantor whether or not any action is brought against the Company or any of
such other guarantors and whether or not the Company is joined in any such
action or actions;
(c) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guaranteed Obligations;
(d) any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may (i)
renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guaranteed Obligations; (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guaranteed Obligations or
any agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration,
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any security for payment of the Guaranteed Obligations, any other guaranties of
the Guaranteed Obligations, or any other obligation of any Person (including any
other Guarantor) with respect to the Guaranteed Obligations (provided that no
Credit Document to which such Guarantor is a party may be amended without its
written consent); (v) enforce and apply any security now or hereafter held by or
for the benefit of such Beneficiary in respect hereof or the Guaranteed
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that such Beneficiary may have against any such security,
in each case as such Beneficiary in its discretion may determine consistent
herewith or the applicable Hedge Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against the Company or any security for the Guaranteed
Obligations; and (vi) exercise any other rights available to it under the Credit
Documents or the Hedge Agreements; and
(e) this Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and to the extent permitted by applicable law
shall not be subject to any reduction, limitation, impairment, discharge or
termination for any reason (other than payment in full of the Guaranteed
Obligations), including the occurrence of any of the following, whether or not
any Guarantor shall have had notice or knowledge of any of them: (i) any failure
or omission to assert or enforce or agreement or election not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Credit Documents or the Hedge
Agreements, at law, in equity or otherwise) with respect to the Guaranteed
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guaranteed Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to events of
default) hereof, any of the other Credit Documents, any of the Hedge Agreements
or any agreement or instrument executed pursuant thereto, or of any other
guaranty or security for the Guaranteed Obligations, in each case whether or not
in accordance with the terms hereof or such Credit Document, such Hedge
Agreement or any agreement relating to such other guaranty or security; (iii)
the Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Credit Documents or any of the Hedge Agreements or from
the proceeds of any security for the Guaranteed Obligations, except to the
extent such security also serves as collateral for indebtedness other than the
Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Guaranteed Obligations (provided that no
Credit Document to which such Guarantor is a party may be amended without its
written consent); (v) any Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Holdings or any of its
Subsidiaries and to any corresponding restructuring of the Guaranteed
Obligations; (vi) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guaranteed Obligations;
(vii) any defenses, set-offs or counterclaims which the Company may allege or
assert against any Beneficiary in respect of the Guaranteed Obligations,
including failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations,
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accord and satisfaction and usury; and (viii) any other act or thing or
omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of any Guarantor as an obligor in respect
of the Guaranteed Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Beneficiaries to the extent permitted by applicable law: (a) any
right to require any Beneficiary, as a condition of payment or performance by
such Guarantor, to (i) proceed against the Company, any other guarantor
(including any other Guarantor) of the Guaranteed Obligations or any other
Person, (ii) proceed against or exhaust any security held from the Company, any
such other guarantor or any other Person, (iii) proceed against or have resort
to any balance of any Deposit Account or credit on the books of any Beneficiary
in favor of the Company or any other Person, or (iv) pursue any other remedy in
the power of any Beneficiary whatsoever; (b) any defense arising by reason of
the incapacity, lack of authority or any disability or other defense of the
Company or any other Guarantor including any defense based on or arising out of
the lack of validity or the unenforceability of the Guaranteed Obligations or
any agreement or instrument relating thereto or by reason of the cessation of
the liability of the Company or any other Guarantor from any cause other than
payment in full in Cash of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (d) any defense based upon any Beneficiary's errors or
omissions in the administration of the Guaranteed Obligations, except behavior
which amounts to bad faith; (e) (i) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms hereof
and any legal or equitable discharge of such Guarantor's obligations hereunder,
(ii) the benefit of any statute of limitations affecting such Guarantor's
liability hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any security
interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedge Agreements or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to the
Company and notices of any of the matters referred to in Section 7.4 and any
right to consent to any thereof; and (g) any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been indefeasibly paid in full and the
Revolving Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled or collateralized with Cash, each Guarantor hereby
waives any claim, right or remedy, direct or indirect, that such Guarantor now
has or may hereafter have against the Company or any other Guarantor or any of
its assets in connection with this Guaranty or the performance by such Guarantor
of its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against the
Company with respect to the Guaranteed Obligations, (b) any right to
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enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have against the Company, and (c) any benefit of, and
any right to participate in, any collateral or security now or hereafter held by
any Beneficiary. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full and the Revolving Commitments shall have terminated
and all Letters of Credit shall have expired or been cancelled or collateralized
with Cash, each Guarantor shall withhold exercise of any right of contribution
such Guarantor may have against any other guarantor (including any other
Guarantor) of the Guaranteed Obligations, including, without limitation, any
such right of contribution as contemplated by Section 7.2. Each Guarantor
further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification such Guarantor may have against the Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against the Company, to all right, title and interest
any Beneficiary may have in any such collateral or security, and to any right
any Beneficiary may have against such other guarantor. If any amount shall be
paid to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of the
Company or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
GUARANTOR") is hereby subordinated in right of payment to the Guaranteed
Obligations, and any such indebtedness collected or received by the Obligee
Guarantor after an Event of Default has occurred and is continuing shall be held
in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith
be paid over to Administrative Agent for the benefit of Beneficiaries to be
credited and applied against the Guaranteed Obligations but without affecting,
impairing or limiting in any manner the liability of the Obligee Guarantor under
any other provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full and the Revolving Commitments shall have terminated and all Letters
of Credit shall have expired or been cancelled. Each Guarantor hereby
irrevocably waives any right to revoke this Guaranty as to future transactions
giving rise to any Guaranteed Obligations.
7.9. AUTHORITY OF GUARANTORS OR THE COMPANY. It is not necessary for
any Beneficiary to inquire into the capacity or powers of any Guarantor or the
Company or the officers, directors or any agents acting or purporting to act on
behalf of any of them.
7.10. FINANCIAL CONDITION OF THE COMPANY AND GUARANTORS. Any Credit
Extension may be made to the Company or continued from time to time, and any
Hedge Agreements may be entered into from time to time, in each case without
notice to or authorization from any
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Guarantor regardless of the financial or other condition of the Company or any
other Guarantor at the time of any such grant or continuation or at the time
such Hedge Agreement is entered into, as the case may be. No Beneficiary shall
have any obligation to disclose or discuss with any Guarantor its assessment, or
any Guarantor's assessment, of the financial condition of the Company or any
other Guarantor. Each Guarantor has adequate means to obtain information from
the Company and each other Guarantor on a continuing basis concerning the
financial condition of the Company and the other Guarantors and their respective
abilities to perform their respective obligations under the Credit Documents and
the Hedge Agreements, and each Guarantor assumes the responsibility for being
and keeping informed of the financial condition of the Company and the other
Guarantors and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of the Company and any other Guarantor
now known or hereafter known by any Beneficiary.
7.11. BANKRUPTCY, ETC. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against the Company or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of the Company or any
other Guarantor or by any defense which the Company or any other Guarantor may
have by reason of the order, decree or decision of any court or administrative
body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest
on any portion of the Guaranteed Obligations which accrues after the
commencement of any case or proceeding referred to in clause (a) above (or, if
interest on any portion of the Guaranteed Obligations ceases to accrue by
operation of law by reason of the commencement of such case or proceeding, such
interest as would have accrued on such portion of the Guaranteed Obligations if
such case or proceeding had not been commenced) shall be included in the
Guaranteed Obligations because it is the intention of Guarantors and
Beneficiaries that the Guaranteed Obligations which are guaranteed by Guarantors
pursuant hereto should be determined without regard to any rule of law or order
which may relieve the Company of any portion of such Guaranteed Obligations.
Guarantors will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay
Administrative Agent, or allow the claim of Administrative Agent in respect of,
any such interest accruing after the date on which such case or proceeding is
commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by the Company, the obligations of Guarantors hereunder
shall continue and remain in full force and effect or be reinstated, as the case
may be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise (and whether as a result of any demand,
settlement, litigation or otherwise),
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and any such payments which are so rescinded or recovered shall constitute
Guaranteed Obligations for all purposes hereunder.
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
Capital Stock of any Guarantor or any of its successors in interest hereunder
shall be sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale.
SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions
or events shall occur:
(a) Failure to Make Payments When Due. Failure by the Company
to pay (i) when due any installment of principal of any Loan, whether at stated
maturity, by acceleration, by notice of voluntary prepayment, by mandatory
prepayment or otherwise; (ii) when due any amount payable to Issuing Bank in
reimbursement of any drawing under a Letter of Credit; or (iii) any interest on
any Loan or any fee or any other amount due hereunder within five days after the
date due; or
(b) Default in Other Agreements. (i) Failure of any Credit
Party or any of their respective Subsidiaries to pay when due any principal of
or interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an
individual or aggregate principal amount of $5,000,000 or more, in each case
beyond the grace period, if any, provided therefor; (ii) breach or default by
any Credit Party with respect to any other material term of (1) one or more
items of Indebtedness in the individual or aggregate principal amounts referred
to in clause (i) above or (2) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness, in each case beyond the
grace period, if any, provided therefor, if the effect of such breach or default
is to cause, or to permit the holder or holders of that Indebtedness (or a
trustee on behalf of such holder or holders), to cause, that Indebtedness to
become or be declared due and payable (or redeemable), or to require the
prepayment, redemption, repurchase or defeasance of, or to cause Holdings,
Company or any of its Subsidiaries to make any offer to prepay, redeem,
repurchase or defease that Indebtedness (other than an asset proceeds offer
under the Senior Subordinated Notes to the extent otherwise permitted
hereunder), prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or (iii) any Event of Default (as
defined in the Senior Subordinated Note Indenture or any Refinancing Notes
Indenture) shall occur under the Senior Subordinated Note Indenture or any
Refinancing Notes Indenture; or (iv) (a) breach or default by any Credit Party
with respect to the Gold Consignment Agreement if the effect thereof is to
cause, or permit the consignor to cause, such agreement to terminate or
accelerate the obligations thereunder, if the obligations thereunder are not
discharged in full by the Credit Parties within 10 days of any such breach or
default, or (b) an Acceleration Notice (as
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defined in the Gold Consignment Intercreditor Agreement) shall have been
delivered under the Gold Consignment Intercreditor Agreement;
(c) Breach of Certain Covenants. Failure of any Credit Party
to perform or comply with any term or condition contained in Section 2.6,
Section 5.2 or Section 6; or
(d) Breach of Representations, etc. Any representation,
warranty, certification or other statement made or deemed made by any Credit
Party in any Credit Document or in any statement or certificate at any time
given by any Credit Party or any of its Subsidiaries in writing pursuant hereto
or thereto or in connection herewith or therewith shall be false in any material
respect as of the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party
shall default in the performance of or compliance with any term contained herein
or any of the other Credit Documents, other than any such term referred to in
any other provision of this Section 8.1, and such default shall not have been
remedied or waived within thirty days after the earlier of (i) an Authorized
Officer of such Credit Party becoming aware of such default or (ii) receipt by
the Company of notice from Administrative Agent or any Lender of such default;
or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i)
A court of competent jurisdiction shall enter a decree or order for relief in
respect of Holdings or any of its Subsidiaries other than an Immaterial
Subsidiary in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Holdings or any of its Subsidiaries other than its
Immaterial Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Holdings or any of its Subsidiaries other than its
Immaterial Subsidiaries, or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Holdings or
any of its Subsidiaries other than its Immaterial Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Holdings or any of its Subsidiaries other than its Immaterial
Subsidiaries, and any such event described in this clause (ii) shall continue
for sixty days without having been dismissed, bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i)
Holdings or any of its Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Holdings or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries shall
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be unable, or shall fail generally, or shall admit in writing its inability, to
pay its debts as such debts become due; or the board of directors (or similar
governing body) of Holdings or any of its Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any money judgment, writ or
warrant of attachment or similar process involving in any individual case or in
the aggregate at any time an amount in excess of $5,000,000 (in either case to
the extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Holdings or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty days (or in any event later than five days prior to the date of
any proposed sale thereunder); or
(i) Dissolution. Any order, judgment or decree shall be
entered against any Credit Party decreeing the dissolution or split up of such
Credit Party and such order shall remain undischarged or unstayed for a period
in excess of thirty days; or
(j) Employee Benefit Plans. (i) There shall occur one or more
ERISA Events which individually or in the aggregate results in or would
reasonably be expected to result in liability of Holdings or any of its
Subsidiaries in excess of $4,000,000 during the term hereof; or (ii) there shall
occur the imposition of a Lien or security interest under Section 412(n) of the
Internal Revenue Code or under ERISA.
(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents and other Credit
Documents. At any time after the execution and delivery thereof, (i) the
Guaranty for any reason, other than the satisfaction in full in Cash of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void or any
Guarantor shall repudiate its obligations thereunder, (ii) this Agreement or any
Collateral Document ceases to be in full force and effect (other than by reason
of a release of Collateral in accordance with the terms hereof or thereof or the
satisfaction in full in Cash of the Obligations in accordance with the terms
hereof) or shall be declared null and void, or Collateral Agent shall not have
or shall cease to have a valid and perfected Lien in any Collateral purported to
be covered by the Collateral Documents with the priority required by the
relevant Collateral Document, in each case for any reason other than the failure
of Collateral Agent or any Secured Party to take any action within its control,
or (iii) any Credit Party shall contest the validity or enforceability of any
Credit Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Credit Document
to which it is a party or (iv) the Loans shall cease to constitute senior
indebtedness under the subordination provisions of the Senior Subordinated Notes
or the Refinancing Notes or shall be invalidated or otherwise cease to be legal,
valid and binding obligations of the parties thereto, enforceable in accordance
with their terms; or
(m) Failure to Effect Merger. The Merger shall not have
occurred by close of business on the day immediately following the Closing Date.
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THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence and during the
continuance, of any other Event of Default, at the request of (or with the
consent of) Requisite Lenders, upon notice to the Company by Administrative
Agent, (A) the Revolving Commitments, if any, of each Lender having such
Revolving Commitments and the obligation of Issuing Bank to issue any Letter of
Credit shall immediately terminate; (B) each of the following shall immediately
become due and payable, in each case without presentment, demand, protest or
other requirements of any kind, all of which are hereby expressly waived by each
Credit Party: (I) the unpaid principal amount of and accrued interest on the
Loans, (II) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (regardless of whether any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letters of Credit), and (III) all other Obligations;
provided, the foregoing shall not affect in any way the obligations of Lenders
under Section 2.3(b)(iv) or Section 2.4(e); (C) Administrative Agent may cause
Collateral Agent to enforce any and all Liens and security interests created
pursuant to Collateral Documents; and (D) Administrative Agent shall direct the
Company to pay (and the Company hereby agrees upon receipt of such notice, or
upon the occurrence of any Event of Default specified in Section 8.1(f) and (g)
to pay) to Administrative Agent such additional amounts of Cash, to be held as
security for the Company's reimbursement Obligations in respect of Letters of
Credit then outstanding, equal to the Letter of Credit Usage at such time.
SECTION 9. AGENTS
9.1. APPOINTMENT OF AGENTS. DBCI is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. GSCP
is hereby appointed Administrative Agent hereunder and under the other Credit
Documents and each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. CIT is
hereby appointed Co-Documentation Agent hereunder, and each Lender hereby
authorizes such Co-Documentation Agent to act as its agent in accordance with
the terms hereof and the other Credit Documents. GECC is hereby appointed
Co-Documentation Agent hereunder, and each Lender hereby authorizes such
Co-Documentation Agent to act as its agent in accordance with the terms hereof
and the other Credit Documents. ML Capital is hereby appointed Co-Documentation
Agent hereunder, and each Lender hereby authorizes such Co-Documentation Agent
to act as its agent in accordance with the terms hereof and the other Credit
Documents. Each Agent hereby agrees to act upon the express conditions contained
herein and the other Credit Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Agents and Lenders and no Credit Party
shall have any rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties hereunder, each Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for Holdings or any of its Subsidiaries. Each of Syndication Agent and the
Co-Documentation Agents, without consent of or notice to any party hereto, may
assign any and all of its rights or obligations hereunder to any of its
Affiliates. As of the Closing Date, neither GSCP, in its capacity as Syndication
Agent, nor CIT, in its capacity as Co-Documentation Agent, nor GE Capital, in
its
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capacity as Co-Documentation Agent, nor ML Capital, in its capacity as
Co-Documentation Agent shall have any obligations but shall be entitled to all
benefits of this Section 9.
9.2. POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3. GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party to any Agent or any Lender in connection with the Credit Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of any Credit Party or any other Person liable for the payment
of any Obligations, nor shall any Agent be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Credit Documents or as to the
use of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default or Default or to make any disclosures with respect to the
foregoing. Anything contained herein to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication,
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instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper Person or Persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of attorneys (who
may be attorneys for Holdings and its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against any Agent as a result of such Agent acting or
(where so instructed) refraining from acting hereunder or any of the other
Credit Documents in accordance with the instructions of Requisite Lenders (or
such other Lenders as may be required to give such instructions under Section
10.5).
9.4. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with Holdings or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Company for services in connection herewith and otherwise
without having to account for the same to Lenders.
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it has made its
own independent investigation of the financial condition and affairs of Holdings
and its Subsidiaries in connection with Credit Extensions hereunder and that it
has made and shall continue to make its own appraisal of the creditworthiness of
Holdings and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this
Agreement or a Joinder Agreement and funding its Tranche B Term Loan and/or
Revolving Loans on the Closing Date or by the funding of any New Term Loans, as
the case may be, shall be deemed to have acknowledged receipt of, and consented
to and approved, each Credit Document and each other document required to be
approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date or as of the date of funding of such New Term Loans.
9.6. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or
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asserted against such Agent in exercising its powers, rights and remedies or
performing its duties hereunder or under the other Credit Documents or otherwise
in its capacity as such Agent in any way relating to or arising out of this
Agreement or the other Credit Documents; provided, no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct. If any indemnity furnished to
any Agent for any purpose shall, in the opinion of such Agent, be insufficient
or become impaired, such Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided further, this sentence shall not be deemed
to require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL AGENT AND SWING LINE
LENDER. Administrative Agent may resign at any time by giving thirty days' prior
written notice thereof to Lenders and the Company, and Administrative Agent may
be removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to the Company and Administrative Agent and
signed by Requisite Lenders. Upon any such notice of resignation or any such
removal, Requisite Lenders shall have the right, upon five Business Days' notice
to the Company, to appoint a successor Administrative Agent. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under the Credit Documents, and (ii) take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Administrative Agent whereupon such retiring or removed Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring or removed Administrative Agent's resignation or removal hereunder as
Administrative 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
Administrative Agent hereunder. Any resignation or removal of Administrative
Agent pursuant to this Section shall also constitute the resignation or removal
of GSCP or its successor as Collateral Agent, and any successor Administrative
Agent appointed pursuant to this Section shall, upon its acceptance of such
appointment, become the successor Collateral Agent for all purposes hereunder
and under the Credit Documents and such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Collateral Agent under this Agreement and
the other Credit Documents, and the retiring or removed Collateral Agent under
this Agreement and the other Credit Documents shall promptly (i) transfer to
such successor Collateral Agent all sums, Securities and other items of
Collateral held under this Agreement or the Credit Documents, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Collateral Agent under this Agreement
or the other Credit Documents, and (ii) execute and deliver to such successor
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Collateral Agent or otherwise authorize the filing of such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Collateral Agent
of the security interests created under the Credit Documents, whereupon such
retiring or removed Collateral Agent shall be discharged from its duties and
obligations under this Agreement and other Credit Documents. After any retiring
or removed Collateral Agent's resignation or removal under this Agreement and
other Credit Documents, the provisions of this Section 9 and the other Credit
Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement or the other Credit Documents while it was the
Collateral Agent hereunder or thereunder. Any resignation or removal of
Administrative Agent pursuant to this Section shall also constitute the
resignation or removal of GSCP or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to this Section shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (a) the Company shall prepay any
outstanding Swing Line Loans made by the retiring or removed Administrative
Agent in its capacity as Swing Line Lender, (b) upon such prepayment, the
retiring or removed Administrative Agent and Swing Line Lender shall surrender
any Swing Line Note held by it to the Company for cancellation, and (c) the
Company shall issue, if so requested by successor Administrative Agent and Swing
Line Loan Lender, a new Swing Line Note to the successor Administrative Agent
and Swing Line Lender, in the principal amount of the Swing Line Loan Sublimit
then in effect and with other appropriate insertions.
9.8. COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and Guaranty. Each
Lender hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Lenders, to be the agent for and
representative of Lenders with respect to the Guaranty, the Collateral and the
Collateral Documents. Subject to Section 10.5, without further written consent
or authorization from Lenders, Administrative Agent or Collateral Agent, as
applicable may execute any documents or instruments necessary to (i) release any
Lien encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5) have
otherwise consented or (ii) release any Guarantor from the Guaranty pursuant to
Section 7.12 or with respect to which Requisite Lenders (or such other Lenders
as may be required to give such consent under Section 10.5) have otherwise
consented.
(b) Right to Realize on Collateral and Enforce Guaranty.
Anything contained in any of the Credit Documents to the contrary
notwithstanding, the Company, Administrative Agent, Collateral Agent and each
Lender hereby agree that (i) no Lender shall have any right individually to
realize upon any of the Collateral or to enforce the Guaranty, it being
understood and agreed that all powers, rights and remedies hereunder may be
exercised solely by Administrative Agent, on behalf of Lenders in accordance
with the terms hereof and all powers, rights and remedies under the Collateral
Documents may be exercised solely by Collateral Agent, and (ii) in the event of
a foreclosure by Collateral Agent on any of the Collateral pursuant to a public
or private sale, Collateral Agent or any Lender may be the purchaser of any or
all of such Collateral at any such sale and Collateral Agent, as agent for and
representative of Secured
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Parties (but not any Lender or Lenders in its or their respective individual
capacities unless Requisite Lenders shall otherwise agree in writing) shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Obligations as a credit on account of the
purchase price for any collateral payable by Collateral Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given to a
Credit Party, Syndication Agent, Collateral Agent, Administrative Agent, Swing
Line Lender or Issuing Bank, shall be sent to such Person's address as set forth
on Appendix B or in the other relevant Credit Document, and in the case of any
Lender, the address as indicated on Appendix B or otherwise indicated to
Administrative Agent in writing. Each notice hereunder shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service and signed for against receipt thereof, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in
the United States mail with postage prepaid and properly addressed; provided, no
notice to any Agent shall be effective until received by such Agent.
10.2. EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, the Company agrees to pay promptly (a) all the actual and
reasonable costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) all the
reasonable costs of furnishing all opinions by counsel for the Company and the
other Credit Parties; (c) the reasonable fees, expenses and disbursements of
counsel to Agents (in each case including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and administration of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by the
Company; (d) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Collateral Agent, for the benefit of Lenders
pursuant hereto, including filing and recording fees, expenses and taxes, stamp
or documentary taxes, search fees, title insurance premiums and reasonable fees,
expenses and disbursements of counsel to each Agent and of counsel providing any
opinions that any Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant to the Collateral Documents; (e) all
the actual costs and reasonable fees, expenses and disbursements of any
auditors, accountants, consultants or appraisers retained by any Agent with the
prior consent of Company (not to be unreasonably withheld); (f) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any appraisers, consultants, advisors and agents employed or
retained by Collateral Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (g) all other actual and reasonable costs
and expenses incurred by each Agent in connection with the syndication of the
Loans and Commitments and the negotiation, preparation and execution of the
Credit Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (h) after the occurrence
of a Default or an Event of Default, all reasonable costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement,
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incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a "work-out" or pursuant to any insolvency or bankruptcy cases or
proceedings.
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section
10.2, whether or not the transactions contemplated hereby shall be consummated,
each Credit Party agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender and the
officers, partners, directors, trustees, employees, agents, advisors and
Affiliates of each Agent and each Lender (each, an "INDEMNITEE"), from and
against any and all Indemnified Liabilities; provided, no Credit Party shall
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of any Indemnitee. To the extent that the
undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 10.3 may be unenforceable in whole or in part because they are violative
of any law or public policy, the applicable Credit Party shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by
Indemnitees or any of them.
(b) To the extent permitted by applicable law, no Credit Party
shall assert, and each Credit Party hereby waives, any claim against Lenders,
Agents and their respective Affiliates, directors, employees, attorneys, agents
or advisors, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein, the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof or any act or omission or event occurring in connection
therewith, and Holdings and the Company hereby waives, releases and agrees not
to sue upon any such claim or any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
10.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder, the
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Letters of Credit and participations therein and under the other Credit
Documents, including all claims of any nature or description arising out of or
connected hereto, the Letters of Credit and participations therein or with any
other Credit Document, irrespective of whether or not (a) such Lender shall have
made any demand hereunder or (b) the principal of or the interest on the Loans
or any amounts in respect of the Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 2 and although
such obligations and liabilities, or any of them, may be contingent or
unmatured.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders.
(b) Affected Lenders' Consent. Without the written consent of
each Lender (other than a Defaulting Lender) that would be affected thereby, no
amendment, modification, termination, or consent shall be effective if the
effect thereof would:
(i) extend the scheduled final maturity of any Loan
or Note;
(ii) waive, reduce or postpone any scheduled
repayment (but not prepayment);
(iii) extend the stated expiration date of any Letter
of Credit beyond the Revolving Commitment Termination Date;
(iv) reduce the rate of interest on any Loan (other
than any waiver of any increase in the interest rate applicable to any
Loan pursuant to Section 2.10) or any fee payable hereunder or any
other amount payable under any Credit Document;
(v) reduce the amount due and payable or extend the
time for payment of any such interest or fees;
(vi) reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit;
(vii) amend, modify, terminate or waive any provision
of this Section 10.5(b) or Section 10.5(c);
(viii) amend any provision of Section 2.17 or amend
the definition of "REQUISITE LENDERS" or "PRO RATA SHARE"; provided,
with the consent of Requisite Lenders, additional extensions of credit
pursuant hereto may be included in the determination of "REQUISITE
LENDERS" or "PRO RATA SHARE" on substantially the same basis as the
Term Loan Commitments, the Term Loans, the Revolving Commitments and
the Revolving Loans are included on the Closing Date;
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(ix) release all or substantially all of the
Collateral or all or substantially all of the Guarantors from the
Guaranty except as expressly provided in the Credit Documents; or
(x) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under any Credit
Document.
(c) Other Consents. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:
(i) increase, or postpone the scheduled date of
expiration of, any Revolving Commitment of any Lender over the amount
thereof then in effect without the consent of such Lender; provided, no
amendment, modification or waiver of any condition precedent, covenant,
Default or Event of Default shall constitute an increase in any
Revolving Commitment of any Lender;
(ii) amend, modify, terminate or waive any provision
hereof relating to the Swing Line Sublimit or the Swing Line Loans
without the consent of Swing Line Lender;
(iii) amend the definition of "REQUISITE CLASS
LENDERS" without the consent of Requisite Class Lenders of each Class;
provided, with the consent of the Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the
determination of such "REQUISITE CLASS LENDERS" on substantially the
same basis as the Term Loan Commitments, the Term Loans, the Revolving
Commitments and the Revolving Loans are included on the Closing Date;
(iv) alter the required application of any repayments
or prepayments as between Classes pursuant to Section 2.15 without the
consent of Requisite Class Lenders of each Class which is being
allocated a lesser repayment or prepayment as a result thereof;
provided, Requisite Lenders may waive, in whole or in part, any
prepayment so long as the application, as between Classes, of any
portion of such prepayment which is still required to be made is not
altered;
(v) amend, modify, terminate or waive any obligation
of Lenders relating to the purchase of participations in Letters of
Credit as provided in Section 2.4(e) without the written consent of
Administrative Agent and of Issuing Bank; or
(vi) amend, modify, terminate or waive any provision
of Section 9 as the same applies to any Agent, or any other provision
hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent.
(d) Execution of Amendments, etc. Administrative Agent may,
but shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand
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on any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 10.5 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by a Credit Party, on such Credit Party.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Register. The Company, Administrative Agent and Lenders
shall deem and treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Commitments and Loans listed therein for
all purposes hereof, and no assignment or transfer of any such Commitment or
Loan shall be effective, in each case, unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been delivered to and
accepted by Administrative Agent and recorded in the Register as provided in
Section 10.6(e). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans.
(c) Right to Assign. Each Lender shall have the right at any
time to sell, assign or transfer all or a portion of its rights and obligations
under this Agreement, including, without limitation, all or a portion of its
Commitment or Loans owing to it or other Obligation (provided, however, that
each such assignment shall be of a uniform, and not varying, percentage of all
rights and obligations under and in respect of any Loan and any related
Commitments):
(i) to any Person meeting the criteria of clause (i)
of the definition of the term of "Eligible Assignee" upon the giving of
notice to the Company and Administrative Agent; and
(ii) to any Person meeting the criteria of clause
(ii) of the definition of the term of "Eligible Assignee" and, in the
case of assignments of Revolving Loans or Revolving Commitments to any
such Person (except in the case of assignments made by or to GSCP),
consented to by each of the Company and Administrative Agent (such
consent not to be (x) unreasonably withheld or delayed or, (y) in the
case of the Company, required at any time an Event of Default shall
have occurred and then be continuing); provided, further each such
assignment pursuant to this Section 10.6(c)(ii)
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shall be in an aggregate amount of not less than (A) $1,000,000 (or
such lesser amount as may be agreed to by the Company and
Administrative Agent or as shall constitute the aggregate amount of the
Revolving Commitments and Revolving Loans of the assigning Lender) with
respect to the assignment of the Revolving Commitments and Revolving
Loans and (B) $500,000 (or such lesser amount as may be agreed to by
the Company and Administrative Agent or as shall constitute the
aggregate amount of the Tranche B Term Loan or New Term Loans of a
Series of the assigning Lender) with respect to the assignment of Term
Loans.
(d) Mechanics. The assigning Lender and the assignee thereof
shall execute and deliver to Administrative Agent an Assignment Agreement, and
such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent pursuant
to Section 2.20(c). Notwithstanding anything to the contrary herein or in any
Assignment Agreement, in the case of an assignment to a Person meeting the
criteria of clause (i) of the definition of the term "Eligible Assignee" of the
assigning Lender, such assignment shall be effective between such assigning
Lender and such Eligible Assignee immediately without compliance with the
conditions for assignment under Sections 10.6(b) through (d), but shall not be
effective with respect to any Credit Party, Administrative Agent, any other
Agent, any Issuing Bank, any Swing Line Lender or any Lender, and each Credit
Party, Administrative Agent, each other Agent, each Issuing Bank, each Swing
Line Lender and each Lender shall be entitled to deal solely and directly with
such assigning Lender under any such assignment, in each case, until the
conditions for assignment under Sections 10.6(b) through (d) have been complied
with.
(e) Notice of Assignment. Upon its receipt of a duly executed
and completed Assignment Agreement (and any forms, certificates or other
evidence required by this Agreement in connection therewith), Administrative
Agent shall record the information contained in such Assignment Agreement in the
Register, shall give prompt notice thereof to the Company and shall maintain a
copy of such Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender,
upon execution and delivery hereof or upon executing and delivering an
Assignment Agreement, as the case may be, represents and warrants as of the
Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments or
loans such as the applicable Commitments or Loans, as the case may be; and (iii)
it will make or invest in, as the case may be, its Commitments or Loans for its
own account in the ordinary course of its business and without a view to
distribution of such Commitments or Loans within the meaning of the Securities
Act or the Exchange Act or other federal securities laws (it being understood
that, subject to the provisions of this Section 10.6, the disposition of such
Revolving Commitments or Loans or any interests therein shall at all times
remain within its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions
of this Section 10.6, as of the "Effective Date" specified in the applicable
Assignment Agreement: (i) the assignee thereunder shall have the rights and
obligations of a "Lender" hereunder to the extent such rights and obligations
hereunder have been assigned to it pursuant to such
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Assignment Agreement and shall thereafter be a party hereto and a "Lender" for
all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned thereby pursuant to
such Assignment Agreement, relinquish its rights (other than any rights which
survive the termination hereof under Section 10.8) and be released from its
obligations hereunder (and, in the case of an Assignment Agreement covering all
or the remaining portion of an assigning Lender's rights and obligations
hereunder, such Lender shall cease to be a party hereto; provided, anything
contained in any of the Credit Documents to the contrary notwithstanding, (y)
Issuing Bank shall continue to have all rights and obligations thereof with
respect to such Letters of Credit until the cancellation or expiration of such
Letters of Credit and the reimbursement of any amounts drawn thereunder and (z)
such assigning Lender shall continue to be entitled to the benefit of all
indemnities hereunder as specified herein with respect to matters arising out of
the prior involvement of such assigning Lender as a Lender hereunder); (iii) the
Commitments shall be modified to reflect the Commitment of such assignee and any
Revolving Commitment of such assigning Lender, if any; and (iv) if any such
assignment occurs after the issuance of any Note hereunder, the assigning Lender
shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon the Company shall issue and deliver new Notes, if so
requested by the assignee and/or assigning Lender, to such assignee and/or to
such assigning Lender, with appropriate insertions, to reflect the new Revolving
Commitments and/or outstanding Loans of the assignee and/or the assigning
Lender.
(h) Participations. Each Lender shall have the right at any
time to sell one or more participations to any Person (other than Holdings, any
of its Subsidiaries or any of its Affiliates) in all or any part of its
Commitments, Loans or in any other Obligation. The holder of any such
participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to
take any action hereunder except with respect to any amendment, modification or
waiver that would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Commitment Termination Date) in which such participant is
participating, or reduce the rate or extend the time of payment of interest or
fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by any Credit Party of any of its rights
and obligations under this Agreement or (iii) release all or substantially all
of the Collateral under the Collateral Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. The Company agrees that each participant shall be
entitled to the benefits of Sections 2.18(c), 2.19 and 2.20 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (c) of this Section; provided, (i) a participant shall not be entitled
to receive any greater payment under Section 2.19 or 2.20 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such participant, unless the sale of the participation to such
participant
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is made with the Company's prior written consent and (ii) a participant that
would be a Non-US Lender if it were a Lender shall not be entitled to the
benefits of Section 2.20 unless the Company is notified of the participation
sold to such participant and such participant agrees, for the benefit of the
Company, to comply with Section 2.20 as though it were a Lender. To the extent
permitted by law, each participant also shall be entitled to the benefits of
Section 10.4 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.17 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other
assignment permitted pursuant to this Section 10.6, (i) any Lender may assign
and/or pledge all or any portion of its Loans, the other Obligations owed by or
to such Lender, and its Notes, if any, to secure obligations of such Lender
including, without limitation, any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any operating circular issued by such Federal Reserve Bank and (ii) any
Lender may assign and/or pledge all or any portion of its Loans, the other
Obligations owned by or to such Lender, and its Notes, if any, to secure
obligations of such Lender to any holders of obligations owed, or securities
issued, by such Lender as collateral security for such obligations or
securities, or to any trustee for, or any other representative of such holders;
provided, no Lender, as between the Company and such Lender, shall be relieved
of any of its obligations hereunder as a result of any such assignment and
pledge, and provided, further, in no event shall the applicable Federal Reserve
Bank, pledgee or trustee be considered to be a "Lender" or be entitled to
require the assigning Lender to take or omit to take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17, 9.3(b)
and 9.6 shall survive the payment of the Loans, the cancellation or expiration
of the Letters of Credit and the reimbursement of any amounts drawn thereunder,
and the termination hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents or any of the Hedge Agreements. Any forbearance or
failure to exercise, and any delay in exercising, any
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right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any
Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause or otherwise (and
whether as a result of any demand, settlement, litigation or otherwise), then,
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor or related
thereto, shall be revived and continued in full force and effect as if such
payment or payments had not been made or such enforcement or setoff had not
occurred.
10.11. SEVERABILITY. In case any provision in or obligation hereunder
or under any Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1401) WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
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10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT
DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e)
AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
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MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public
information regarding the Company and its Subsidiaries and their businesses
obtained by such Lender pursuant to the requirements hereof in accordance with
such Lender's customary procedures for handling confidential information of such
nature, it being understood and agreed by the Company that, in any event, a
Lender may make (i) disclosures of such information to Affiliates of such Lender
and to such Lender's and such Lender's Affiliates' directors, officers,
employees, agents and advisors (and to other persons authorized by a Lender or
Agent to organize, present or disseminate such information in connection with
disclosures otherwise made in accordance with this Section 10.17), (ii)
disclosures of such information reasonably required by any bona fide or
potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation by such Lender of any Loans
or any participations therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in Hedge Agreements
(provided, such counterparties and advisors are advised of and agree to be bound
by the provisions of this Section 10.17), (iii) disclosure to any rating agency
when required by it, provided that, prior to any disclosure, such rating agency
shall undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any of the Agents
or any Lender, and (iv) disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal or judicial
process; provided, unless specifically prohibited by applicable law or court
order, each Lender shall make reasonable efforts to notify the Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition or
other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information.
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision
herein, the aggregate interest rate charged with respect to any of the
Obligations, including all charges or fees in connection therewith deemed in the
nature of interest under applicable law shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, the Company shall pay to Administrative
Agent an amount equal to the difference between the amount of interest paid and
the amount of interest which would have been paid if the Highest Lawful Rate had
at all times been in effect. Notwithstanding the foregoing, it is the intention
of Lenders and the Company to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts
126
for, charges, or receives any consideration which constitutes interest in excess
of the Highest Lawful Rate, then any such excess shall be cancelled
automatically and, if previously paid, shall at such Lender's option be applied
to the outstanding amount of the Loans made hereunder or be refunded to the
Company.
10.19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
10.20. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
the Company and Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof.
10.21. USA PATRIOT ACT. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), it is required to obtain, verify and record
information that identifies the Company, which information includes the name and
address of the Company and other information that will allow such Lender to
identify the Company in accordance with the Act.
[Remainder of page intentionally left blank]
127
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
AAC HOLDING CORP.
By: ______________________________
Name:
Title:
AAC ACQUISITION CORP.
By: ______________________________
Name:
Title:
EDUCATIONAL COMMUNICATIONS, INC.
COMMEMORATIVE BRANDS, INC.
TAYLOR SENIOR HOLDING CORP.
TP HOLDING CORP.
TAYLOR PUBLISHING COMPANY
CBI NORTH AMERICA, INC.
By: ______________________________
Name:
Title:
TAYLOR PUBLISHING MANUFACTURING, L.P.
By: Taylor Publishing Company
its General Partner
By: ______________________________
Name:
Title:
TAYLOR MANUFACTURING HOLDINGS, LLC
By: Taylor Publishing Company
its Sole Member
By: ______________________________
Name:
Title:
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Joint Bookrunner,
Administrative Agent, Collateral Agent
and a Lender
By: _________________________________
Authorized Signatory
DEUTSCHE BANK SECURITIES INC.,
as Joint Lead Arranger and Joint Bookrunner
By: _________________________________
DEUTSCHE BANK AG CAYMAN ISLANDS
BRANCH, as Syndication Agent and a Lender
By: _________________________________
CIT LENDING SERVICES CORPORATION,
as a Co-Documentation Agent and a Lender
By: _________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Co-Documentation Agent and a Lender
By: _________________________________
Name:
Title:
MERRILL LYNCH CAPITAL, A DIVISION OF
MERRILL LYNCH BUSINESS FINANCIAL SERVICES
INC.,
as a Co-Documentation Agent and a Lender
By: _________________________________
Name:
Title:
NATIONAL CITY BANK,
as a Lender
By: _________________________________
Name:
Title:
APPENDIX A-1
TO CREDIT AND GUARANTY AGREEMENT
TRANCHE B TERM LOAN COMMITMENTS
LENDER TRANCHE B TERM LOAN COMMITMENT PRO RATA SHARE
------ ------------------------------ --------------
Goldman Sachs Credit Partners L.P. $ 137,500,000 88.8%
CIT Lending Services Corporation $ 5,000,000 3.2%
General Electric Capital Corporation $ 3,750,000 2.4%
Merrill Lynch Capital, a division of Merrill Lynch $ 5,000,000 3.2%
Business Financial Services Inc.
National City Bank $ 3,750,000 2.4%
------------- ---
TOTAL $ 155,000,000 100%
============= ===
APPENDIX A-1-1
APPENDIX A-2
TO CREDIT AND GUARANTY AGREEMENT
REVOLVING COMMITMENTS
LENDER REVOLVING COMMITMENT PRO RATA SHARE
------ -------------------- --------------
Goldman Sachs Credit Partners L.P. $ 2,500,000 6.25%
Deutsche Bank AG Cayman Islands Branch $ 2,500,000 6.25%
CIT Lending Services Corporation $10,000,000 25.0%
General Electric Capital Corporation $ 7,500,000 18.75%
Merrill Lynch Capital, a division of Merrill $10,000,000 25.0%
Lynch Business Financial Services Inc.
National City Bank $ 7,500,000 18.75%
----------- -----
TOTAL $40,000,000 100%
=========== =====
APPENDIX A-2-1
APPENDIX B
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
AAC HOLDING CORP.
AAC ACQUISITION CORP.
AMERICAN ACHIEVEMENT CORPORATION
c/o Fenway Partners Inc.
152 E. 57th Street, 59th Floor
New York, NY 10019
Attention: Richard C. Dresdale
Mac LaFollette
Telecopier: (212) 658-9449
EDUCATIONAL COMMUNICATIONS, INC.
COMMEMORATIVE BRANDS, INC.
TAYLOR SENIOR HOLDING CORP.
TP HOLDING CORP.
TAYLOR PUBLISHING COMPANY
TAYLOR PUBLISHING MANUFACTURING, L.P.
TAYLOR MANUFACTURING HOLDINGS, LLC
CBI NORTH AMERICA, INC.
c/o American Achievement Corporation
7211 Circle S Road
Austin, TX 78745
Attention: Chief Financial Officer
Telecopier: (512) 443-5213
in each case, with a copy to:
Ropes & Gray LLP
One International Place
Boston, MA 02110-2624
Attention: Philip Smith
Telecopier: (617) 951-7050
B-1
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Joint Bookrunner,
Administrative Agent,
Collateral Agent and a Lender
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: Elizabeth Fischer
Telecopier: (212) 357-0932
with a copy to:
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
Attention: Marcus J. Dougherty
Telecopier: (212) 751-4864
APPENDIX B-2
DEUTSCHE BANK SECURITIES INC.,
as Joint Lead Arranger and Joint Bookrunner
c/o Deutsche Bank AG
60 Wall Street, 21st Floor
New York, 10005
Attention: Carin M. Keegan, Vice President
Telecopier: (212) 797-5690
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,
as Swing Line Lender, Issuing Bank
and a Lender
Swing Line Lender's Principal Office:
c/o Deutsche Bank AG Cayman Islands Branch
90 Hudson Street, 1st Floor,
Jersey City, NY 07302
Attention: Peter J. Medina
Telecopier: (201) 593-2308
Issuing Bank's Principal Office:
c/o Deutsche Bank AG
60 Wall Street, 21st Floor
New York, 10005
Attention: Carin M. Keegan, Vice President
Telecopier: (212) 797-5690
in each case, with a copy to:
c/o Deutsche Bank AG Cayman Islands Branch
90 Hudson Street, 1st Floor,
Jersey City, NY 07302
Attention: Rosemary Dunne
Telecopier: (201) 593-2315
APPENDIX B-3
CIT LENDING SERVICES CORPORATION,
as Co-Documentation Agent
c/o CIT Group Inc.
Business Credit/Corporate Finance Group
1 CIT Drive, 3rd Floor
Livingstone, New Jersey 07039
Attention: Mark S. O'Keefe, Managing Director
Telecopier: (973) 740-5721
in each case, with a copy to:
c/o CIT Group Inc.
Corporate Legal Department
1 CIT Drive, 3rd Floor
Livingstone, New Jersey 07039
Attention: John P. Sirico, II
Telecopier: (973) 422-5822 or (973) 740-5841
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent
c/o GE Corporate Financial Services
Bank Loan Group
201 Merritt 7
Norwalk, CT 06856-5201
Attention: Stephen F. Schroppe, Assistant Vice President
Telecopier:
in each case, with a copy to:
Winston & Strawn LLP
200 Park Avenue
New York, NY 10166
Attention: William D. Brewer
Telecopier: (212) 294-4700
APPENDIX B-4
MERRILL LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC.,
as Co-Documentation Agent
_________________________
_________________________
_________________________
Attention:
Telecopier:
in each case, with a copy to:
_________________________
_________________________
_________________________
Attention:
Telecopier:
APPENDIX B-5