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EXHIBIT 4.4.1
CREDIT AND GUARANTY AGREEMENT
DATED AS OF AUGUST 6, 2004
AMONG
STANADYNE CORPORATION,
AS BORROWER,
STANADYNE AUTOMOTIVE HOLDING CORP. AND
CERTAIN SUBSIDIARIES OF STANADYNE CORPORATION,
AS GUARANTORS,
VARIOUS LENDERS,
AND
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS SOLE LEAD ARRANGER,
SOLE BOOKRUNNER, SYNDICATION AGENT, ADMINISTRATIVE
AGENT AND COLLATERAL AGENT,
--------------------------------------------------------
$65,000,000 SENIOR SECURED CREDIT FACILITY
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND
INTERPRETATION.......................................................................
2
1.1.
Definitions.....................................................................................
2
1.2. Accounting
Terms................................................................................
29
1.3. Interpretation,
etc.............................................................................
30
SECTION 2. LOANS
...............................................................................................
31
2.1. Term
Loans......................................................................................
31
2.2.
Repayment.......................................................................................
31
2.3. Pro Rata Shares; Availability of
Funds..........................................................
32
2.4. Use of
Proceeds.................................................................................
32
2.5. Evidence of Debt; Register; Lenders' Books and Records;
Notes................................... 33
2.6. Interest on
Loans...............................................................................
33
2.7.
Conversion/Continuation.........................................................................
35
2.8. Default
Interest................................................................................
35
2.9.
Fees............................................................................................
35
2.10. Voluntary Prepayments/Call
Protection..........................................................
36
2.11. Mandatory Prepayments/Commitment
Reductions....................................................
37
2.12. Application of
Prepayments/Reductions..........................................................
39
2.13. General Provisions Regarding
Payments..........................................................
39
2.14. Ratable
Sharing................................................................................
41
2.15. Making or Maintaining Eurodollar Rate
Loans....................................................
41
2.16.
Increased Costs; Capital
Adequacy..............................................................
43
2.17. Taxes; Withholding,
etc........................................................................
45
2.18. Obligation to
Mitigate.........................................................................
47
2.19. Removal or Replacement of a
Lender.............................................................
47
SECTION 3. CONDITIONS
PRECEDENT.................................................................................
48
3.1. Closing
Date....................................................................................
48
3.2. Further Conditions to All Term
Loans............................................................
54
SECTION 4. REPRESENTATIONS AND
WARRANTIES.......................................................................
55
4.1. Organization; Requisite Power and Authority;
Qualification...................................... 55
4.2. Capital Stock and
Ownership.....................................................................
55
4.3. Due
Authorization...............................................................................
55
4.4. No
Conflict.....................................................................................
55
4.5. Governmental
Consents...........................................................................
56
4.6. Binding
Obligation..............................................................................
56
4.7. Historical Financial
Statements.................................................................
56
4.8.
Projections.....................................................................................
56
4.9. No Material Adverse
Change......................................................................
57
4.10. No Restricted Junior
Payments..................................................................
57
4.11. Adverse Proceedings,
etc.......................................................................
57
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4.12. Payment of
Taxes...............................................................................
57
4.13.
Properties.....................................................................................
57
4.14. Environmental
Matters..........................................................................
58
4.15. No
Defaults....................................................................................
59
4.16. Material
Contracts.............................................................................
59
4.17. Governmental
Regulation........................................................................
59
4.18. Margin
Stock...................................................................................
59
4.19. Employee
Matters...............................................................................
59
4.20. Employee Benefit
Plans.........................................................................
60
4.21. Certain
Fees...................................................................................
60
4.22.
Solvency.......................................................................................
60
4.23. Related
Agreements.............................................................................
60
4.24. Compliance with Statutes,
etc..................................................................
61
4.25.
Disclosure.....................................................................................
61
4.26. Subordination;
Designation of the Credit Documents as "Designated Senior
Indebtedness";
Etc............................................................................................
61
SECTION 5. AFFIRMATIVE
COVENANTS................................................................................
62
5.1. Financial Statements and Other
Reports..........................................................
62
5.2.
Existence.......................................................................................
66
5.3. Payment of Taxes and
Claims.....................................................................
66
5.4. Maintenance of
Properties.......................................................................
67
5.5.
Insurance.......................................................................................
67
5.6.
Inspections.....................................................................................
67
5.7. Lenders
Meetings................................................................................
68
5.8. Compliance with
Laws............................................................................
68
5.9.
Environmental...................................................................................
68
5.10.
Subsidiaries...................................................................................
70
5.11. Additional Material Real Estate
Assets.........................................................
70
5.12. Interest Rate
Protection.......................................................................
71
5.13. Further
Assurances.............................................................................
71
5.14. Cash Management
Systems........................................................................
71
5.16. Post-Closing
Obligations.......................................................................
71
5.18.
...............................................................................................
72
SECTION 6. NEGATIVE
COVENANTS...................................................................................
72
6.1.
Indebtedness....................................................................................
72
6.2.
Liens...........................................................................................
74
6.3. Equitable
Lien..................................................................................
76
6.4. No Further Negative
Pledges.....................................................................
76
6.5. Restricted Junior
Payments......................................................................
77
6.6. Restrictions on Subsidiary
Distributions........................................................
78
6.7.
Investments.....................................................................................
79
6.8.
[Reserved]......................................................................................
80
6.9. Fundamental Changes; Disposition of Assets;
Acquisitions........................................ 80
6.10. Disposal of Subsidiary
Interests...............................................................
81
6.11. Sales and
Lease-Backs..........................................................................
82
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6.12. Transactions with Shareholders and
Affiliates..................................................
82
6.13. Conduct of
Business............................................................................
82
6.14. Permitted Activities of
Holdings...............................................................
82
6.15. Amendments or Waivers of Certain Related
Agreements............................................ 83
6.16. Amendments or Waivers with respect to Subordinated
Indebtedness................................ 83
6.17. Fiscal
Year....................................................................................
83
6.18. No Other "Designated Senior
Indebtedness"......................................................
83
SECTION 7.
GUARANTY.............................................................................................
83
7.1. Guaranty of the
Obligations.....................................................................
83
7.2. Contribution by
Guarantors......................................................................
84
7.3. Payment by
Guarantors...........................................................................
84
7.4. Liability of Guarantors
Absolute................................................................
85
7.5. Waivers by
Guarantors...........................................................................
87
7.6. Guarantors' Rights of Subrogation, Contribution,
etc............................................ 88
7.7. Subordination of Other
Obligations..............................................................
89
7.8. Continuing
Guaranty.............................................................................
89
7.9. Authority of Guarantors or
Borrower.............................................................
89
7.10. Financial Condition of Borrower and
Guarantors.................................................
89
7.11. Bankruptcy,
etc................................................................................
90
7.12. Discharge of Guaranty Upon Sale of
Guarantor...................................................
90
SECTION 8. EVENTS OF
DEFAULT....................................................................................
91
8.1. Events of
Default...............................................................................
91
SECTION 9. AGENTS
..............................................................................................
93
9.1. Appointment of
Agents...........................................................................
93
9.2. Powers and
Duties...............................................................................
94
9.3. General
Immunity................................................................................
94
9.4. Agents Entitled to Act as
Lender................................................................
95
9.5. Lenders' Representations, Warranties and
Acknowledgment.........................................
96
9.6. Right to
Indemnity..............................................................................
96
9.7. Successor Administrative Agent and Collateral
Agent............................................. 97
9.8. Collateral Documents and
Guaranty...............................................................
97
SECTION 10.
MISCELLANEOUS.......................................................................................
98
10.1.
Notices........................................................................................
98
10.2.
Expenses.......................................................................................
98
10.3.
Indemnity......................................................................................
99
10.4.
Set-Off........................................................................................
100
10.5. Amendments and
Waivers.........................................................................
100
10.6. Successors and Assigns;
Participations.........................................................
101
10.7. Independence of
Covenants......................................................................
105
10.8. Survival of Representations, Warranties and
Agreements......................................... 105
10.9. No Waiver; Remedies
Cumulative.................................................................
105
10.10. Marshalling; Payments Set
Aside...............................................................
105
10.11.
Severability..................................................................................
105
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10.12. Obligations Several; Independent Nature of Lenders'
Rights.................................... 106
10.13.
Headings......................................................................................
106
10.14. APPLICABLE
LAW................................................................................
106
10.15. CONSENT TO
JURISDICTION.......................................................................
106
10.16. WAIVER OF JURY
TRIAL..........................................................................
106
10.17.
Confidentiality...............................................................................
107
10.18. Usury Savings
Clause..........................................................................
108
10.19.
Counterparts..................................................................................
108
10.20.
Effectiveness.................................................................................
108
10.21. USA Patriot
Act...............................................................................
108
10.22. Electronic Execution of
Assignments...........................................................
108
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APPENDICES: A
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
3.1(k) Phase I
Report
4.1
Jurisdictions of Organization and Qualification
4.2 Capital
Stock and Ownership
4.13
Real Estate Assets
4.14
Certain Environmental Matters
4.17
Material Contracts
4.20
Employee Benefits Plans
5.9
Environmental Disclosure
5.14
Cash Management Systems
5.16
Post-Closing Obligations
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
B
Term Loan Note
C
Compliance Certificate
D
Assignment Agreement
E
Certificate Re: Non-bank Status
F-1 Closing
Date Certificate
F-2 Solvency
Certificate
G
Counterpart Agreement
H
Mortgage
I
Landlord Waiver and Consent Agreement
The Company agrees to furnish
supplementally a copy of any omitted schedule or
exhibit to the Commission upon request.
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of August 6, 2004,
is
entered into by and among STANADYNE
CORPORATION, a Delaware corporation
("BORROWER"), STANADYNE AUTOMOTIVE HOLDING
CORP., a Delaware corporation
("HOLDINGS"), CERTAIN SUBSIDIARIES OF
STANADYNE CORPORATION, as Guarantors, the
Lenders party thereto from time to time,
and GOLDMAN SACHS CREDIT PARTNERS L.P.
("GSCP"), as Sole Lead Arranger, Sole
Bookrunner, Syndication Agent,
Administrative Agent (together with its
permitted successors in such capacity,
"ADMINISTRATIVE AGENT") and Collateral
Agent (together with its permitted
successors in such capacity, "COLLATERAL
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 owns all of the capital stock of Borrower;
WHEREAS, KSTA Acquisition, LLC has entered into the Stock
Purchase
Agreement with the Sellers pursuant to
which it has agreed to acquire Holdings;
WHEREAS, Lenders have agreed to extend a senior secured term
loan
credit facility to Borrower, consisting of
$65.0 million aggregate principal
amount of Term Loans, the proceeds of which
will be used, together with the net
cash proceeds of (i) the Sponsor Equity
contribution and (ii) the Senior
Subordinated Notes, to repay in full
Borrower's Existing Indebtedness
outstanding on the Closing Date, together
with the payments of all costs, fees
and expenses in connection with the
Acquisition and such repayment;
WHEREAS, concurrently with the Term Loans provided to Borrower on
the
Closing Date, Borrower will enter into the
Revolving Credit Agreement which will
provide for Revolving Loans for the funding
of permitted capital expenditures
and Permitted Acquisitions and to provide
for the ongoing working capital
requirements of Borrower following the
Acquisition and for general corporate
purposes;
WHEREAS, Borrower has agreed to secure all of its Term Obligations
by
granting to Collateral Agent, for the
benefit of Term Secured Parties, a First
Priority Lien on its Fixed Collateral and
granting a Second Priority Lien on its
Liquid Collateral;
WHEREAS, each Guarantor has agreed to guarantee the obligations
of
Borrower hereunder and to secure its Term
Obligations by granting to Collateral
Agent, for the benefit of Term Secured
Parties, a First Priority Lien on its
Fixed Collateral, and a Second Priority
Lien on its Liquid Collateral, 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 (excluding
Stanadyne Amalgamations Private Limited and
Stanadyne Systems Private Limited).
NOW, THEREFORE, in consideration of the premises and the
agreements,
provisions and covenants herein contained,
the parties hereto agree as follows:
<PAGE>
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:
"ACCOUNTS" means, as to each Credit Party, all of such Credit
Party's "accounts" as defined in the UCC,
whether now owned or hereafter
acquired, including, without limitation,
all present and future rights of such
Credit Party to payment of a monetary
obligation, whether or not earned by
performance, which is not evidenced by
chattel paper or an instrument, (a) for
property that has been or is to be sold,
leased, licensed, assigned, or
otherwise disposed of, (b) for services
rendered or to be rendered, (c) for a
secondary obligation incurred or to be
incurred, or (d) arising out of the use
of a credit or charge card or information
contained on or for use with such a
card.
"ACQUISITION" means the acquisition by KSTA Acquisition, LLC
of Holdings in accordance with the
Acquisition Documents.
"ACQUISITION DOCUMENTS" means the Stock Purchase 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 1/16 of 1%) (i) (a) the
rate per annum (rounded to the nearest
1/16 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 Citibank, N.A. for deposits
(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.
2
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"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 2.15(b).
"AFFECTED LOANS" as defined in Section 2.15(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
and Collateral Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.14.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as
of August 6, 2004, as it may be amended,
supplemented or otherwise modified from
time to time.
"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.
3
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"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
Borrower or any Guarantor Subsidiary or, in
the case of a non-Guarantor
Subsidiary, another non-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 $2,000,000 with respect to any
transaction or series of related
transactions or in the aggregate during any
Fiscal Year, and (iii) sales of
other assets at fair market value for
aggregate consideration of less than
$2,000,000 with respect to any transaction
or series of related transactions or
in the aggregate during any Fiscal
Year.
"ASSET SALE PROCEEDS ACCOUNT" means an account established
pursuant to the terms of Section 6.9(c)
which account shall be subject to a
First Priority Lien in favor of the Term
Collateral Agent on behalf of the Term
Secured Parties and a Second Priority Lien
in favor of the Revolving Collateral
Agent on behalf of the Revolving Secured
Parties.
"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.
"ASSIGNMENT EFFECTIVE DATE" as defined in Section 10.6(b).
"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 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, Lender, Lender Counterparty,
and Indemnitee.
"BORROWER" means Stanadyne Corporation.
4
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"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
the regulations of its primary Federal
banking regulator) 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 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.
"CERTIFICATE RE: NON-BANK STATUS" means a certificate
substantially in the form of Exhibit F.
"CHANGE OF CONTROL" means, at any time:
(i) Sponsor shall cease to beneficially own and control at
least 51% on a fully diluted basis of the
economic and voting interests in the
Capital Stock of Holdings;
5
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(ii) any Person or "group" (within the meaning of Rules 13d-3
and 13d-5 under the Exchange Act) other
than Sponsor (a) shall have acquired
beneficial ownership of 35% 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 Borrower;
(iv) the majority of the seats (other than vacant seats) on
the board of directors (or similar
governing body) of Borrower cease to be
occupied by Persons who either (a) were
members of the board of directors of
Borrower on the Closing Date or (b) were
nominated for election by Sponsor or
the board of directors of Borrower, 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 shall occur under
the Senior Subordinated Notes or the
Refinancing Notes that would require
Borrower to tender for or otherwise give
rise to an accelerated repayment of the
Senior Subordinated Notes or the
Refinancing Notes.
"CLOSING DATE" means the first date on which the conditions
precedent set forth in Section 3.1 are
satisfied or waived in accordance with
the terms hereof and the Term Loans are
made to Borrower.
"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 the Fixed Collateral and the Liquid
Collateral.
"COLLATERAL AGENT" is defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Term Pledge and Security
Agreement, the Mortgages, the IP Security
Agreements, the Control Agreements,
the Landlord Personal Property Collateral
Access Agreements, if any, the
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, or purporting
to, (a) grant to Collateral Agent,
for the benefit of Term Secured Parties, 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 Administrative Agent that
provides information with respect to
the personal or mixed property of each
Credit Party.
"COMMITMENT" means the commitment of a Lender to make or
otherwise fund any Term Loan hereunder and
"COMMITMENTS" means such commitments
of all Lenders in the
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<PAGE>
aggregate. The amount of each Lender's
Commitment is set forth on Appendix A or
in the applicable Assignment Agreement,
subject to any adjustment or reduction
pursuant to the terms and conditions
hereof. The aggregate amount of the
Commitments as of the Closing Date is
$65,000,000.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an
amount determined for Borrower 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 such period,
(g) losses related to the redemption of SAC
Notes not repurchased on or prior to
the Closing Date in the Debt Tender and (h)
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) (i) management fees and
expenses permitted by Section 6.5(f), (j)
transaction costs relating to
Permitted Acquisitions, dispositions,
financings and debt extinguishment in an
aggregate amount not to exceed $2,500,000
in any Fiscal Year and (k)
restructuring charges in an amount not to
exceed $5,000,000 per Fiscal Year,
plus (in any given Fiscal Year) up to
$10,000,000 of unused amounts under this
clause (k) from prior Fiscal Years (or
portions thereof) occurring since the
Closing Date, provided that the aggregate
amount of restructuring charges
included in this clause (k) in all periods
shall not exceed $25,000,000 in the
aggregate (in the case of clauses (b)
through (k), (x) to the extent deducted in
determining Consolidated Net Income and (y)
unless applicable to Persons whose
income (or losses) are not included in
Consolidated Net Income pursuant to
clause (ii) of the definition thereof),
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).
Amounts for periods prior to the Closing
Date shall be as set forth on Schedule
1.1A.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period,
the aggregate of all expenditures of
Borrower 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 Borrower and its
Subsidiaries, excluding the purchase price
of Permitted Acquisitions and
purchases made with the proceeds of
permitted Asset Sales or insurance coverage.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such
period, excluding any amount not payable
in Cash.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Borrower
and its Subsidiaries on a
consolidated basis that may properly be
classified as
7
<PAGE>
current assets in conformity with GAAP,
excluding Cash and Cash Equivalents and
deferred taxes.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of
Borrower and its Subsidiaries on a
consolidated basis that may properly be
classified as current liabilities in
conformity with GAAP, excluding deferred
taxes and the current portion of long
term debt and Capital Leases.
"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
repayment of (1) Revolving Loans or Swing
Line Loans or Term Loans or (2) other
revolving loans except to the extent the
commitments with respect to such other
revolving loans are permanently reduced in
connection with such repayment), (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), (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) cash
consideration paid in respect of
Permitted Acquisitions and (f) add-backs to
Consolidated Adjusted EBITDA
pursuant to clauses (i), (j) and (k) of the
definition of Consolidated Adjusted
EBITDA.
"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 Borrower and its Subsidiaries
on a consolidated basis with respect to all
outstanding Indebtedness of Borrower
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 2.10(d)
payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period:
(i) the net income (or loss) of Borrower 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 Borrower) in which any other
Person (other than Borrower or any of
its Subsidiaries) has an interest, except
to the extent of the amount of
dividends or other distributions actually
paid to
8
<PAGE>
Borrower 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 Borrower or is merged into or
consolidated with Borrower or any of its
Subsidiaries or that Person's assets are
acquired by Borrower or any of its
Subsidiaries, (c) the income of any
Subsidiary of Borrower 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 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 Borrower and its Subsidiaries determined
on a consolidated basis in
accordance with GAAP, minus (ii) the sum of
(x) Cash and Cash Equivalents on
hand at Borrower and Guarantor Subsidiaries
and (y) Cash and Cash Equivalents on
hand at non-Guarantor Subsidiaries of
Borrower in an amount not to exceed the
amount of Indebtedness of such
non-Guarantor Subsidiary which is included in the
calculation of Consolidated Total Debt.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated
Current Assets over Consolidated
Current Liabilities.
"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.
"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.
"CONTROL AGREEMENTS" means each control agreement executed and
delivered by the Collateral Agent for the
benefit of the Secured Parties, a
securities intermediary or depositary bank
and the applicable Credit Party on
the Closing Date and each control agreement
to be executed and delivered by
Collateral Agent, a securities intermediary
or depositary bank and the
applicable Credit Party pursuant to the
terms of the Term Pledge and Security
Agreement with such modifications as
Collateral Agent may reasonably request or
approve.
"CONTROL INVESTMENT AFFILIATE" means, with respect to any
Person, any other Person that (a) directly
or indirectly, is in control of, is
controlled by, or is under common control
with, such Person and (b) is organized
by such Person primarily for the purpose of
making equity or debt investments in
one or more companies. For purposes of this
definition, "control" of a Person
means the power, directly or indirectly, to
direct or cause the direction of the
management and policies of such Person,
whether by contract or otherwise.
9
<PAGE>
"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 G
delivered by a Credit Party pursuant to
Section 5.10.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if
any, the Collateral Documents and all other
documents, instruments or agreements
executed and delivered by a Credit Party
for the benefit of any Agent 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.
"CREDIT PARTY" means each Person (other than any Agent or any
Lender or any other representative thereof
or any non-Affiliates of Borrower or
its Subsidiaries) 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.
"DEBT TENDER" means the receipt of tender and consents by
Borrower of at least 50% in principal
amount of the SAC Notes.
"DEFAULT" means a condition or event that, after notice or
lapse of time or both, would constitute an
Event of Default.
"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, financial
institution, 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
10
<PAGE>
of its businesses; provided, none of
Holdings, any Affiliate of Holdings or
Sponsor (other than Antares Capital
Corporation in its capacity as a Lender)
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 or
any of their respective ERISA
Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit,
proceeding, demand, abatement order or other
order (including consent orders) or
directive (conditional 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 foreign or domestic,
federal or state (or any subdivision of
either of them) or local statutes,
ordinances, orders (including consent
orders), rules, regulations, judgments,
treaties, Governmental Authorizations, or
any other requirements of Governmental
Authorities relating to or imposing
standards of conduct concerning (i)
environmental matters, including those
relating to any Hazardous Materials
Activity; (ii) the Release, generation,
use, storage, transportation or disposal
of, or exposure to, Hazardous Materials;
(iii) industrial hygiene, occupational
safety and health; (iv) natural resources
or natural resource damages; (v) land
use or (vi) the protection of human, plant
or animal health or welfare, in any
manner applicable to Holdings or any of its
Subsidiaries or any Facility.
"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
11
<PAGE>
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 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, including through any joint
and several liability with any of their
respective ERISA Affiliates, 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 Stanadyne
Corporation or a Subsidiary thereof as
indicated thereon prior to the date
hereof.
"EXISTING INDEBTEDNESS" means the pre-existing Indebtedness of
Borrower and its Subsidiaries on the
Closing Date described in Schedule 1.1B
hereto.
12
<PAGE>
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located
thereon) now, hereafter or 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.
"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 Borrower
that such financial statements fairly
present, in all material respects, the
financial condition of Borrower 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 prior in right to any other Lien
thereon, other than Permitted Liens
described in clauses (b) through (f), (i),
(j), (k), (l) and (p) of Section 6.2.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Borrower and its
Subsidiaries ending on December 31 of each
calendar year or, with respect to any
non-Guarantor Subsidiaries only, December
31 or November 30 of each calendar
year, as the case may be.
"FIXED COLLATERAL" means, collectively, all of the real,
personal and mixed property in which First
Priority Liens are purported to be
granted pursuant to the Collateral
Documents as security for the Term
Obligations and shall include all "Fixed
Collateral" as defined in the
Intercreditor Agreement.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to
a mortgage in favor of Collateral Agent,
for the benefit of the Term Secured
Parties or the Revolving Secured Parties,
and located in an area designated by
the Federal Emergency Management Agency as
having special flood or mud slide
hazards.
13
<PAGE>
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a
Domestic Subsidiary.
"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.
"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, approval, plan, directive,
consent order or consent decree of or
from any Governmental Authority.
"GRANTOR" as defined in the Term 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
Borrower).
"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, compound,
constituent, 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 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.
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<PAGE>
"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 Borrower 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
Borrower 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
Borrower that they fairly present,
in all material respects, the financial
condition of Borrower 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-COST LENDERS" as defined in Section 2.19.
"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) (except to the
extent disputed in good faith) due more
than six months from the date of
incurrence of the obligation in respect
thereof 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 Indebtedness of
another;
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(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.
"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), reasonable 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 KSTA
Acquisition LLC with respect to the
transactions contemplated by this Agreement;
or (iii) any Environmental Claim or any
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 2.2.
"INSTALLMENT DATE" as defined in Section 2.2.
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"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement,
dated as of the Closing Date, by and among
Collateral Agent, Revolving
Collateral Agent and Grantors.
"INTEREST PAYMENT DATE" means each of January 1, April 1, July
1 and October 1 of each year, commencing on
the first such date to occur after
the Closing Date and the final maturity
date of such Loan.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate
Loan, an interest period of one-, two-,
three- or six-months (or, with the
consent of each affected Lender, nine- or
twelve-months), as selected by
Borrower in the applicable Funding Notice
or Conversion/Continuation Notice, (i)
initially, commencing on the date of
borrowing 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; and (c) no Interest Period with
respect to any portion of any Term Loans
shall extend beyond the Term Loan
Maturity 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.
"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.
"INVENTORY" means, as to Borrower or a Guarantor, (i) all
"inventory" as defined in Article 9 of the
UCC and (ii) all goods held for sale
or lease or to be furnished under contracts
of service or so leased or
furnished, all raw materials, work in
process, finished goods, and materials
used or consumed in the manufacture,
packing, shipping, advertising, selling,
leasing, furnishing or production of such
inventory or otherwise used or
consumed in such Person's business; all
goods in which such Person has an
interest in mass or a joint or other
interest or right of any kind; and all
goods which are returned to or repossessed
by such Person, all computer programs
embedded in any goods and all accessions
thereto and products thereof (in each
case, regardless of whether characterized
as inventory under the UCC).
"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
17
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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.
"IP SECURITY AGREEMENT" means each IP Security Agreement,
dated as of the Closing Date, by and among
Borrower, each Guarantor and
Collateral Agent.
"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 I
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.
"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.
"LENDER COUNTERPARTY" means each Lender or Agent or any
Affiliate of a Lender or an Agent,
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).
"LETTERS OF CREDIT" means Letters of Credit under (and as
defined in) the Revolving Credit Agreement
and shall include any Permitted
Refinancings thereof.
"LEVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter or other date of
determination of:
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(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, (a) 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 and (b) Consolidated
Adjusted EBITDA shall be pro forma for
Permitted Acquisitions as if they had
occurred on the first day of the
four-Fiscal Quarter period then ending.
"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.
"LIQUID COLLATERAL" means, collectively, all of the personal
property in which Second Priority Liens are
purported to be granted pursuant to
the Collateral Documents as security for
the Term Obligations and shall include
all "Liquid Collateral" as defined in the
Intercreditor Agreement.
"LOAN" means a Term Loan.
"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 Term 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,
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 upon or in which
Holdings or any of its Subsidiaries
conducts
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manufacturing, assembly or similar
operations which operations account for more
than 10% of the manufacturing and assembly
revenues of Borrower and its
Subsidiaries taken as a whole, and (c)
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 Borrower.
"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 Borrower 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
a Subsidiary thereof, 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 or the
Revolving 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 a
Subsidiary thereof in connection with
such Asset Sale and (d) brokers fees,
accountant fees and expenses, counsel fees
and expenses and other termination
costs.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal
to:
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<PAGE>
(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 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, (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 and
(c) actual and reasonable counsel
fees and expenses.
"NON-CASH PAY" means:
(a) with respect to any Preferred Stock, that such Preferred
Stock is not Cash-Pay Preferred Stock;
and
(b) with respect to any Capital Stock (other than Preferred
Stock), that such Capital Stock does not
require any cash payments (whether in
respect of dividends, redemption,
repurchase or otherwise) to be made thereon or
in respect thereof on or prior to the date
that is 91 days after the Term Loan
Maturity Date.
"NON-US LENDER" as defined in Section 2.17(c).
"NOTE" means a Term Loan Note.
"NOTICE" means a Funding Notice or a Conversion/Continuation
Notice.
"OBLIGATIONS" means the Revolving Obligations and the Term
Obligations.
"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, (iv) with respect to any
limited liability company, its articles of
organization, as amended, and its
operating agreement, as amended and (v)
with respect to any other business
entity, the agreement or documents
analogous to any of the foregoing. 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.
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"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 Borrower or
any of its wholly-owned Guarantor
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 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 Borrower in connection with such acquisition shall
be
owned 100% by Borrower or a Guarantor Subsidiary thereof, and
Borrower
shall have taken, or caused to be taken, as of the date such
Person
becomes a Subsidiary of Borrower, each of the actions set forth
in
Sections 5.10 and/or 5.11, as applicable;
(iv) Borrower shall have delivered to Administrative
Agent at least 10 Business Days prior to such proposed acquisition
all
relevant financial information with respect to such acquired
assets,
including, without limitation, the aggregate consideration for
such
acquisition and any other information reasonably requested by
Administrative Agent; and
(v) any Person or assets or division as acquired in
accordance herewith shall be in same business or lines of business
in
which Borrower and/or its Subsidiaries are engaged as of the
Closing
Date or a business reasonably related thereto.
"PERMITTED CURE SECURITY" means a Non-Cash Pay equity security
of Holdings issued pursuant to Section
8.2.
"PERMITTED LIENS" means each of the Liens permitted pursuant
to Section 6.2.
"PERMITTED REFINANCING means, as to any Indebtedness, the
Refinancing of such Indebtedness
("REFINANCING INDEBTEDNESS"); provided that, in
the case of such Refinancing Indebtedness,
the following conditions are
satisfied:
(i) the weighted average life to maturity of such
Refinancing Indebtedness shall be greater than or equal to the
weighted
average life to maturity of the Indebtedness being refinanced, and
the
first scheduled principal payment in respect of
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<PAGE>
such Refinancing Indebtedness shall not be earlier than the
first
scheduled principal payment in respect of the Indebtedness
being
refinanced;
(ii) the
principal amount of such Refinancing
Indebtedness shall be less than or equal to the principal amount
then
outstanding of the Indebtedness being refinanced;
(iii) the respective obligor or obligors shall be the
same on the Refinancing Indebtedness as on the Indebtedness
being
refinanced;
(iv) the security, if any, for the Refinancing
Indebtedness shall be the same as that for the Indebtedness
being
refinanced (except to the extent that less security is granted
to
holders of Refinancing Indebtedness); and
(v) no material terms applicable to such Refinancing
Indebtedness or, if applicable, the related guarantees of such
Refinancing Indebtedness (including covenants, events of
default,
remedies and acceleration rights) shall be materially more
favorable to
the refinancing lenders than the terms that are applicable under
the
instruments and documents governing the Indebtedness being
refinanced,
in each case, taken as a whole.
"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 is either (A) set forth on Schedule
3.1(k), or (B) in form and substance
reasonably satisfactory to Administrative
Agent 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. All Phase I
Reports shall expressly specify that the
report may be relied on by
Administrative Agent or Administrative
Agent shall have received a reliance
letter so stating.
"PREFERRED STOCK" means, with respect to any corporation,
capital stock issued by such corporation
that is entitled to a preference or
priority, in respect of dividends or
distribution upon liquidation, over some
other class of capital stock issued by such
corporation.
"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
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<PAGE>
actually charged to any customer. Any 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 any Person, such Person's
"Principal Office" as set forth on Appendix
B, or such other office or office of
a third party or sub-agent, as appropriate,
as such Person may from time to time
designate in writing to Borrower,
Administrative Agent and each Lender.
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means with respect to all payments,
computations and other matters relating to
the Commitment or Loans of any
Lender, the percentage obtained by dividing
(a) the Term Loan Exposure of that
Lender by (b) the aggregate 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.
"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.
"REFINANCE" means, in respect of any Indebtedness, to
refinance, extend, renew, defease, amend,
modify, supplement, restructure,
replace, refund or repay, or to issue other
Indebtedness, in exchange or
replacement for, such Indebtedness in whole
or in part. "REFINANCED" and
"REFINANCING" shall have correlative
meanings.
"REFINANCING NOTE INDENTURE" means the trust indenture
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(k).
"REGISTER" as defined in Section 2.5(b).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect
from time to time.
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<PAGE>
"RELATED AGREEMENTS" means, collectively, the Stock Purchase
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, seepage,
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 2.19.
"REQUISITE LENDERS" means one or more Lenders having or
holding Term Loan Exposure and representing
more than 50% of the sum of the
aggregate 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 Borrower 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 Borrower 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 Borrower now
or hereafter outstanding; (iv) management
or similar fees payable to Sponsor or
any of its Affiliates; (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, the Refinancing Notes,
the SAC Notes and any other
Indebtedness which is subordinated to the
Term Obligations.
"REVOLVING COLLATERAL AGENT" means the "Collateral Agent" as
defined in the Revolving Credit Agreement
or any collateral agent under a
Permitted Refinancing of the Revolving
Credit Agreement.
"REVOLVING COMMITMENTS" means the Revolving Commitments under
(and as defined in) the Revolving Credit
Agreement.
"REVOLVING COMMITMENT TERMINATION DATE" means the Revolving
Commitment Termination Date under (and as
defined in) the Revolving Credit
Agreement.
"REVOLVING CREDIT AGREEMENT" means the Revolving Credit and
Guaranty Agreement, dated as of the date
hereof, by and among Borrower, the
Guarantors, GSCP as Sole
25
<PAGE>
Lead Arranger, Sole Bookrunner and
Syndication Agent, and The CIT Group/Business
Credit, Inc., as Administrative Agent and
Collateral Agent, with regard to
$35,000,000 in Revolving Loans, as it may
be amended, supplemented or otherwise
modified from time to time.
"REVOLVING LOAN" means a Revolving Loan under (and as defined
in) the Revolving Credit Agreement and
includes any Permitted Refinancings
thereof.
"REVOLVING OBLIGATIONS" means the Obligations under (and as
defined in) the Revolving Credit Agreement
and includes any Permitted
Refinancings thereof.
"REVOLVING SECURED PARTIES" as defined in the Revolving Credit
Agreement, or any credit agreement or
comparable document in respect of a
Permitted Refinancing of the Revolving
Loans.
"REVOLVING PLEDGE AND SECURITY AGREEMENT" means the Pledge and
Security Agreement as defined in the
Revolving Credit Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of
The
McGraw Hill Corporation.
"SAC NOTES" means the 10.25% Senior Subordinated Notes dated
as of December 11, 1997 by Stanadyne
Automotive Corp., as issuer.
"SECOND PRIORITY" means, with respect to any Lien purported to
be created on any Collateral pursuant to
any Collateral Document, that such Lien
is prior in right to any other Lien
thereon, other than the First Priority Lien
in favor of the Collateral Agent for the
benefit of the Revolving Secured
Parties and Permitted Liens described in
clauses (b) through (f), (i), (j), (k),
(l) and (p) of Section 6.2 and that such
Lien is subordinate to the First
Priority Lien in the manner set forth in
the Intercreditor Agreement.
"SECURED PARTIES" means the Revolving Secured Parties and the
Term Secured Parties.
"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 American Industrial Partners Capital Fund II,
L.P., and the other stockholders of
Stanadyne Automotive Holding Corp. set forth
on Schedule I to the Stock Purchase
Agreement.
26
<PAGE>
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated
as of the date hereof pursuant to which
Borrower has issued its Senior
Subordinated Notes due 2014, 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 Borrower's unsecured Senior
Subordinated Notes due 2014, 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.
"SETTLEMENT CONFIRMATION" as defined in Section 10.6(b).
"SETTLEMENT SERVICE" as defined in Section 10.6(d).
"SOLE LEAD ARRANGER" as defined in the preamble hereto.
"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 Kohlberg IV, L.P., its Control Investment
Affiliates, Co-Investment Partners, L.P., a
Delaware limited partnership,
Massachusetts Mutual Life Insurance
Company, a Massachusetts corporation, Tower
Square Capital Partners L.P., a Delaware
limited partnership, National City
Equity Partners, LLC, an Ohio limited
liability company, Hamilton Lane Private
Equity Fund V L.P., a Guernsey limited
partnership, Antares Capital Corporation,
a Delaware corporation, Wilton Private
Equity Fund, LLC, a Delaware limited
liability company, DuPont Pension Trust, a
Massachusetts trust, and James
Wiggins, an individual.
"SPONSOR EQUITY" means the Capital Stock of Holdings purchased
by Sponsor on or prior to the Closing Date
in an aggregate Cash amount equal to
not less than 26% of the Purchase Price (as
defined in the Stock Purchase
Agreement).
27
<PAGE>
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement
dated as of June 23, 2004 among KSTA
Acquisition, LLC and the Sellers and other
parties thereto.
"SUBJECT TRANSACTION" as defined in Section 1.3.
"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
(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 LOANS" means Swing Line Loans under (and as
defined in) the Revolving Credit Agreement
and shall include any Permitted
Refinancings thereof.
"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 LOANS" means a Loan made by a Lender to Borrower
pursuant to Section 2.1(a).
"TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination, the aggregate
outstanding principal amount of the
Term Loans of that Lender; provided, at any
time prior to the making of the Term
Loans, the Term Loan Exposure of any Lender
shall be equal to such Lender's
Commitment.
"TERM LOAN MATURITY DATE" means the sixth anniversary of the
Closing Date.
"TERM LOAN NOTE" means a promissory note in the form of
Exhibit B, as it may be amended,
supplemented or otherwise modified from time to
time.
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<PAGE>
"TERM OBLIGATIONS" means 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, under any Credit
Document, 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 Term
Obligation, whether or not a claim is
allowed against such Credit Party for such
interest in the related bankruptcy
proceeding), fees, expenses, indemnification
(including, without limitation, pursuant to
Section 10.3 hereof) or otherwise.
"TERM PLEDGE AND SECURITY AGREEMENT" means the Pledge and
Security Agreement, dated as of the Closing
Date, by and among Borrower, each
Guarantor and Collateral Agent.
"TERM SECURED PARTIES" has the meaning assigned to such term
in the Term Pledge and Security
Agreement.
"TERMINATED LENDER" as defined in Section 2.19.
"TITLE POLICY" as defined in Section 3.1(i).
"TRANSACTION COSTS" means the fees, costs and expenses
payable by Holdings, Borrower or any of
Borrower's Subsidiaries on or before the
Closing Date in connection with the
Transactions.
"TRANSACTIONS" means consummation of the Acquisition, the
contribution of Sponsor Equity, 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 and the Revolving Credit
Agreement and the issuance of the Senior
Subordinated Notes.
"TYPE OF LOAN" means either a Base Rate Loan or a Eurodollar
Rate Loan.
"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 Borrower 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
calculating the Leverage Ratio 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 Borrower
notifies Administrative
29
<PAGE>
Agent that Borrower wishes to amend any
covenant in Section 2.11 or the Leverage
Ratio 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 Administrative Agent notifies Borrower
that the Requisite Lenders wish to
amend Section 2.11 or the Leverage Ratio or
any related definition for such
purpose), then (i) Borrower and
Administrative Agent shall negotiate in good
faith to agree upon an appropriate
amendment to such covenant and (ii)
Borrower's compliance with such covenant
and the Leverage Ratio 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 Borrower and the Requisite Lenders. For
the purposes of determining
compliance under Sections 6.1, 6.2, 6.6 and
6.7 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. CERTAIN CALCULATIONS With respect to any period during which
a
Permitted Acquisition or an Asset Sale has
occurred (each, a "SUBJECT
TRANSACTION"), Consolidated Adjusted EBITDA
(except with respect to calculations
of Consolidated Excess Cash Flow) 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 Borrower and
its Subsidiaries as a result of such
Subject 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
reasonably approved by 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 Borrower) 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 Borrower 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).
1.5. 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
non 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. In computation of periods
of time from a specified date to a
later specified date, the word "from" means
"from and including", the words "to"
and "until" each mean "to but excluding",
and the word "through" means "to and
including". Unless the context otherwise
requires (i) any
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<PAGE>
definition of or reference to any
agreement, instrument or other document herein
shall be construed as referring to such
agreement, instrument or other document
as from time to time amended, supplemented
and otherwise modified in accordance
with the terms hereof, (ii) any references
herein to any Person shall be
construed to include such Person's
successors and assigns, and (iii) the words
"herein", "hereof" and "hereunder", and
words of similar import, shall be
construed to refer to this Agreement in its
entirety and not to any particular
provision hereof.
SECTION 2. LOANS
2.1. TERM LOANS.
(a) Term Loan Commitments. Subject to the terms and conditions
hereof, each Lender severally agrees to
make a Term Loan on the Closing Date in
an amount equal to such Lender's
Commitment. Borrower may make only one
borrowing under the Commitments, which
shall be on the Closing Date. Any amount
borrowed pursuant to this Section 2.1(a)
and subsequently repaid or prepaid may
not be reborrowed. Subject to Sections
2.10(a) and 2.11, all amounts owed
hereunder with respect to the Loans shall
be repaid in full no later than the
Term Loan Maturity Date. Each Lender's
Commitment shall terminate immediately
and without further action on the Closing
Date after giving effect to the
funding of such Lender's Commitment on such
date.
(b) Borrowing Mechanics for Term Loans.
(i)
Borrower shall deliver to Administrative Agent a
fully executed and delivered Funding Notice no later
than (x) one Business Day prior to the Closing Date
in the case of a Base Rate Loan and (ii) three
Business Days prior to the Closing Date in the case
of a Eurodollar Rate Loan. 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 Term Loan available to
Administrative Agent no later than 12:00 p.m. (New
York City time) on the Closing Date by wire transfer
of same day funds in Dollars at the Principal Office
designated by Administrative Agent. Upon satisfaction
or waiver of the conditions precedent specified
herein, Administrative Agent shall make the proceeds
of the Term Loans available to Borrower 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 Borrower at the Principal
Office designated by Administrative Agent or to such
other account as may be designated in writing to
Administrative Agent by Borrower.
2.2. REPAYMENT.
The principal amounts of the Term Loans shall be repaid in
consecutive quarterly installments (each,
an "INSTALLMENT") in the aggregate
amounts set forth below on each
quarterly
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<PAGE>
scheduled Interest Payment Date (each, an
"INSTALLMENT DATE"), commencing
September 30, 2004 :
<TABLE>
<S>
<C>
EACH INSTALLMENT DATE PRIOR TO AUGUST 6,
$
162,500
2010
TERM LOAN MATURITY DATE
$61,100,000
</TABLE>
Notwithstanding the foregoing, (x) such quarterly installments
shall be
reduced in connection with any voluntary or
mandatory prepayments of the Term
Loans in accordance with Sections 2.10,
2.11 and 2.12, as applicable, and (y)
the Term Loans, together with all other
amounts owed hereunder with respect
thereto, shall, in any event, be paid in
full no later than the Term Loan
Maturity Date.
2.3. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made 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 nor
shall any 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.
(b) Availability of Funds. Unless Administrative Agent shall
have been notified by any Lender prior to
the Closing Date that such Lender does
not intend to make available to
Administrative Agent the amount of such Lender's
Loan requested on the Closing Date,
Administrative Agent may assume that such
Lender has made such amount available to
Administrative Agent on the Closing
Date and Administrative Agent may, in its
sole discretion, but shall not be
obligated to, make available to Borrower a
corresponding amount on the Closing
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 the
Closing 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 Borrower and
Borrower shall immediately pay such
corresponding amount to Administrative
Agent together with interest thereon, for
each day from the Closing Date until the
date such amount is paid to
Administrative Agent, at the rate payable
hereunder for Base Rate Loans. Nothing
in this Section 2.3(b) shall be deemed to
relieve any Lender from its obligation
to fulfill its Commitments hereunder or to
prejudice any rights that Borrower
may have against any Lender as a result of
any default by such Lender hereunder.
2.4. USE OF PROCEEDS. The proceeds of the Term Loans shall be
applied
by Borrower to the repayment of the
Existing Indebtedness outstanding on the
Closing Date. No portion of the
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<PAGE>
proceeds of the Term Loans shall be used in
any manner that causes or might
cause such Term Loans 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.
2.5. 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
Borrower 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 Borrower, absent
manifest error; provided, that the
failure to make any such recordation, or
any error in such recordation, shall
not affect Borrower'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 (or its sub-agent appointed
by it) shall maintain at the Principal
Office a register for the recordation of
the names and addresses of Lenders and
Loans of each Lender from time to time
(the "REGISTER"). The Register, as in
effect at the close of business on the
preceding Business Day, shall be available
for inspection by Borrower or any
Lender at any reasonable time and from time
to time upon reasonable prior
notice. Administrative Agent shall record,
or shall cause to be recorded, in the
Register the Loans in accordance with the
provisions of Section 10.6, and each
repayment or prepayment in respect of the
principal amount of the Loans, and any
such recordation shall be conclusive and
binding on Borrower and each Lender,
absent manifest error; provided, that the
failure to make any such recordation,
or any error in such recordation, shall not
affect Borrower's Obligations in
respect of any Loan. Borrower hereby
designates GSCP to serve as Borrower's
agent solely for purposes of maintaining
the Register as provided in this
Section 2.5, and Borrower hereby agrees
that, to the extent GSCP serves in such
capacity, GSCP and its officers, directors,
employees, agents, sub-agents and
affiliates shall constitute
"Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Borrower (with a copy to Administrative
Agent) at least two Business Days prior
to the Closing Date, or at any time
thereafter, Borrower 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 Borrower's receipt of
such notice) a Note or Notes to
evidence such Lender's Loan.
2.6. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each 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) if a Base Rate Loan, at the Base Rate plus 2.50% or
(ii) if a Eurodollar Rate Loan, at the Adjusted Eurodollar
Rate plus 3.50%.
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<PAGE>
(b) The basis for determining the rate of interest with
respect to any Loan, and the Interest
Period with respect to any Eurodollar Rate
Loan, shall be selected by Borrower and
notified to Administrative Agent and
Lenders pursuant to the Funding Notice or a
Conversion/Continuation Notice, as
the case may be; provided, until the
earlier of thirty (30) days after the
Closing Date or the date that Syndication
Agent notifies Borrower that the
primary syndication of the Loans has been
completed, as reasonably determined by
Syndication 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
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 five (5) Interest Periods
outstanding at any time. In the event
Borrower fails to specify between a Base
Rate Loan or a Eurodollar Rate Loan in
the Funding Notice or a
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 Borrower fails to
specify an Interest Period for any
Eurodollar Rate Loan in the Funding Notice or
a Conversion/Continuation Notice, Borrower
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 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 Borrower and each Lender.
(d) Interest payable pursuant to Section 2.6(a) shall be
computed (i) in the case of Base Rate Loans
based upon the Prime Rate 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 or Base Rate Loans
not based upon the Prime Rate, 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 last
Interest Payment Date with respect to such
Loan 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 (i) shall accrue on a daily basis on
and to the March 31st, June 30th,
September 30th and December 31st most
recently ended prior to such payment date
and shall be payable in arrears on each
Interest Payment Date; (ii) shall accrue
on a daily basis and be payable in arrears
upon any prepayment of that Loan,
whether voluntary or mandatory, to the
extent accrued on the amount being
prepaid; and (iii) shall accrue on a daily
basis and shall be payable in arrears
at maturity of the Loans, including final
maturity of the Loans; 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.
34
<PAGE>
2.7. CONVERSION/CONTINUATION.
(a) Subject to Section 2.15 and so long as no Default or Event
of Default shall have occurred and then be
continuing, Borrower shall have the
option:
(i) to convert at any time all or any part
of any Loan equal to $1,000,000 and integral multiples of $100,000
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 Borrower shall pay all amounts due under Section 2.15
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
$100,000 in excess of that amount as a Eurodollar Rate Loan.
(b) Borrower 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
Borrower shall be bound to effect a
conversion or continuation in accordance
therewith.
2.8. 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 2.0% 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 2.0% 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 2.0% 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 2.8 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.
2.9. FEES.
Borrower agrees to pay to Agents such fees in the amounts and
at
the times separately agreed upon.
35
<PAGE>
2.10. VOLUNTARY PREPAYMENTS/CALL PROTECTION.
(a) Voluntary Prepayments.
(i) Any time and from time to time (but subject to
clause (b) below):
(1) with respect to Base Rate Loans,
Borrower may prepay any such Loans on any Business Day in
whole or in part, in an aggregate minimum amount of $500,000
and integral multiples of $100,000 in excess of that amount;
and
(2) with respect to Eurodollar Rate Loans,
Borrower 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 $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; and
(2) upon not less than three Business Days'
prior written or telephonic notice in the case of Eurodollar
Rate Loans;
in each case given to Administrative Agent,
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, as the case may be, by
telefacsimile or telephone promptly
confirmed in writing to each Lender). 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
2.12(a).
(b) Call Protection. In the event that the Term Loans are
prepaid or repaid in whole or in part
pursuant to clause (a) above prior to the
second anniversary of the Closing Date,
Borrower shall pay to Lenders having
Term Loan Exposure a prepayment premium on
the principal amount so prepaid or
repaid as follows:
<TABLE>
<CAPTION>
PREPAYMENT PREMIUM AS A PERCENTAGE OF
PAYMENT DATE
THE PRINCIPAL AMOUNT SO PREPAID OR REPAID
-----------------------------------------------------------------------------------------
<S>
<C>
On or prior to the first
anniversary of the
2.0%
Closing Date
</TABLE>
36
<PAGE>
<TABLE>
<S>
<C>
On or prior to the second anniversary of
the
1.0%
Closing Date but after the first
anniversary
of the Closing Date
</TABLE>
2.11. MANDATORY PREPAYMENTS/COMMITMENT
REDUCTIONS.
(a) Asset Sales. Subject to Section 2.12(b), 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, Borrower shall prepay the Loans and
the Commitments shall be permanently
reduced as set forth in Section 2.12(b) in
an aggregate amount equal to such amount of
Net Asset Sale Proceeds; provided,
so long as no Default or Event of Default
shall have occurred and be continuing,
Borrower 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 productive
assets used in the business of Borrower
and its Subsidiaries; provided, further, if
required under the Revolving Credit
Agreement, 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. Subject to Section
2.12(b), 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 during any
Fiscal Year, Borrower shall prepay the
Loans and/or the Commitments shall be
permanently reduced as set forth in Section
2.12(b) in an aggregate amount equal
to such amount of Net
Insurance/Condemnation Proceeds; provided, so long as no
Default or Event of Default shall have
occurred and be continuing, Borrower
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 productive
assets used in the business of Holdings
and its Subsidiaries, which investment may
include the repair, restoration or
replacement of the applicable assets in
respect thereof; provided, further, if
required under the Revolving Credit
Agreement, 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. Subject to Section 2.12(b),
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 (other than
(i) pursuant to any employee stock or stock
option compensation plan, (ii)
equity issued to Sponsor, all or
substantially all of the Cash proceeds of which
are utilized by Borrower for capital
expenditures permitted hereunder or
Investments otherwise permitted hereunder,
or (iii) equity issued pursuant to
Section 8.2 hereof), Borrower shall prepay
the Loans and the Commitments shall
be permanently reduced as set forth in
Section 2.12(b) in an aggregate amount
equal to 75.0% 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 one of its
Affiliates (except Sponsor, provided such
reasonable costs and expenses payable to
Sponsor were approved by the
disinterested members
37
<PAGE>
of the Borrower's board of directors and it
is a one-time fee), including
reasonable legal fees and expenses,
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 3.00:1.00 or less,
Borrower shall only be required to
make the prepayments and/or reductions
otherwise required by this Section
2.11(c) in an 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 one of its Subsidiaries or
Affiliates (except Sponsor, provided such
reasonable costs and expenses payable
to Sponsor were approved by the
disinterested members of the Borrower's board of
directors and it is a one-time fee).
(d) Issuance of
Debt. Subject to Section 2.12(b), 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 (except for Indebtedness
incurred pursuant to Section 6.1(k) the
proceeds of which are not used to prepay
the Senior Subordinated Notes), but
expressly including the proceeds of any sale
and leaseback pursuant to Section 6.11),
Borrower shall prepay the Loans and/or
the Commitments shall be permanently
reduced as set forth in Section 2.12(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 one of its Subsidiaries or
Affiliates (except Sponsor, provided such
reasonable costs and expenses payable
to Sponsor were approved by the
disinterested members of the Borrower's board of
directors and it is a one-time fee),
including reasonable legal fees and
expenses.
(e) Consolidated Excess Cash Flow. Subject to Section 2.12(b),
in the event that there shall be
Consolidated Excess Cash Flow for any Fiscal
Year (commencing with Fiscal Year 2005),
Borrower shall, no later than one
hundred-twenty five (125) days after the
end of such Fiscal Year, prepay the
Loans and the Commitments shall be
permanently reduced as set forth in Section
2.12(b) in an aggregate amount equal to (i)
75.0% of such Consolidated Excess
Cash Flow minus (ii) optional prepayments
of the Term Loans and to the extent of
a Revolving Commitment reduction, Revolving
Loans, in each case, during such
Fiscal Year; 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
3.00:1.00 or less, Borrower shall only be
required to make the prepayments
and/or reductions otherwise required by
this Section 2.11(e) in an amount equal
to 50.0% of such Consolidated Excess Cash
Flow.
(f) Prepayment Certificate. Concurrently with any prepayment
of the Loans and/or reduction of the
Commitments pursuant to Sections 2.11(a)
through 2.11(e), Borrower 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 Borrower shall subsequently
determine that the actual amount
received exceeded the amount set forth in
such certificate, Borrower shall
promptly make an additional prepayment of
the Loans and/or the Commitments shall
be permanently reduced in an amount equal
to such excess as set forth in Section
2.12(b), and Borrower shall
concurrently
38
<PAGE>
therewith deliver to Administrative Agent a
certificate of an Authorized Officer
demonstrating the derivation of such
excess.
2.12. APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type of
Loans. Any prepayment of any Loan pursuant
to Section 2.12(a) shall be applied
first, on a pro rata basis to reduce the
scheduled Installments of principal of
such Term Loans during the next twelve
months, and second, on a pro rata basis,
to reduce the remaining scheduled
Installments of principal of such Term Loans.
Application of Mandatory Prepayments by Type of
Loans. Any amount required to be paid pursuant to Sections
2.11(a)
through 2.11(e) shall be applied to prepay Term Loans to the
full
extent thereof (to be applied first, on a pro rata basis to reduce
the
scheduled Installments of principal of such Term Loans during the
next
twelve months, and second, on a pro rata basis, to reduce the
remaining
scheduled Installments of principal of such Term Loans).
(b) Application of Prepayments of Loans to Base Rate
Loans and Eurodollar Rate Loans. 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 Borrower pursuant to
Section 2.15(c).
2.13. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Borrower 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 the Principal Office designated by
Administrative Agent for the account
of Lenders; for purposes of computing
interest and fees, funds received by
Administrative Agent after that time on
such due date shall be deemed to have
been paid by Borrower on the next
succeeding Business Day.
(b) All payments in respect of the principal amount of any
Loan shall be accompanied by payment of
accrued interest on the principal amount
being repaid or prepaid.
(c) Administrative Agent (or its agent or sub-agent appointed
by it) 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 amounts due to such Lender,
including, without limitation, all fees
payable to such Lender 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.
39
<PAGE>
(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.
(f) Borrower hereby authorizes Administrative Agent to charge
Borrower's accounts with Administrative
Agent in order to cause timely payment
to be made to Administrative Agent of all
principal, 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 Borrower 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
Borrower 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 2.7
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, including from payments or
proceeds in respect of any sale, or any
collection from, or other realization
upon, all or any part of the Collateral,
shall be applied, subject to the terms
of the Intercreditor Agreement, as
follows:
(i) first, to the payment of all costs and expenses
of any such sale, collection or other realization, including
reasonable
compensation to the Collateral Agent and its agents and counsel,
and
all other expenses, liabilities and advances made or incurred by
the
Collateral Agent in connection therewith, and all amounts for which
the
Collateral Agent is entitled to indemnification hereunder or under
the
Term Pledge and Security Agreement (in its capacity as the
Collateral
Agent and not as a Lender) and all advances made by the
Collateral
Agent under the Term Pledge and Security Agreement for the account
of
the applicable Grantor, and to the payment of all costs and
expenses
paid or incurred by the Collateral Agent in connection with the
exercise of any right or remedy hereunder or under the Term Pledge
and
Security Agreement, all in accordance with the terms hereof or
thereof;
(ii) second, to the extent of any excess of such
proceeds, to the payment of all other Obligations for the
ratable
benefit of the Lenders and the Lender Counterparties in such order
as
they may elect; and
40
<PAGE>
(iii) third, to the extent of any excess of such
proceeds, to the payment to or upon the order of the applicable
Credit
Party or to whosoever may be lawfully entitled to receive the same
or
as a court of competent jurisdiction may direct.
2.14. 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 Code, receive payment
or reduction of a proportion of the
aggregate amount of principal, interest,
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 Borrower 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. Borrower 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 Borrower 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 Borrower.
2.15. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability to Determine Applicable Interest Rate. In the
event that Administrative Agent shall have
reasonably 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 Borrower 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 Borrower
and Lenders that the circumstances giving
rise to such notice no longer exist,
and (ii) any Conversion/Continuation Notice
given by Borrower with respect to
the Loans in respect of which such
determination was made shall be deemed to be
rescinded by Borrower.
41
<PAGE>
(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 Borrower 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 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 Borrower 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
Borrower pursuant to 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 Borrower pursuant to a Funding
Notice or a Conversion/Continuation
Notice, Borrower shall have the option,
subject to the provisions of Section
2.15(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 2.15(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. Borrower 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
42
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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 Borrower.
(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.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a
Lender under this Section 2.15 and under
Section 2.16 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 2.15 and under
Section 2.16.
2.16. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.17 (which shall be
controlling with respect to the
matters covered thereby), in the event that
any Lender 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,
Borrower shall promptly pay to such
Lender, upon receipt of the statement
referred to in the next sentence, s
