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PROTECTION ONE INC | PROTECTION ONE ALARM MONITORING, INC., | LEHMAN COMMERCIAL PAPER INC., | HARRIS NESBITT FINANCING, INC., | LASALLE BANK NATIONAL ASSOCIATION, | U.S. BANK NATIONAL ASSOCIATION, | BEAR STEARNS CORPORATE LENDING INC., | BEAR, STEARNS & CO. INC | LEHMAN BROTHERS INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.1
EXECUTION COPY
$275,000,000
CREDIT AGREEMENT
among
PROTECTION ONE, INC.,
PROTECTION ONE ALARM MONITORING, INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent,
HARRIS NESBITT FINANCING, INC., LASALLE BANK
NATIONAL ASSOCIATION, and
as Co-Documentation Agents,
and
BEAR STEARNS CORPORATE LENDING INC.,
as Administrative Agent
Dated as of April 18, 2005
BEAR, STEARNS & CO. INC. and LEHMAN BROTHERS INC., as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
CREDIT AGREEMENT, dated as of April 18, 2005, among PROTECTION ONE, INC., a Delaware corporation (“ Holdings ”), PROTECTION ONE ALARM MONITORING, INC., a Delaware corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “ Lenders ”), BEAR, STEARNS & CO. INC. and LEHMAN BROTHERS INC., as joint lead arrangers and joint bookrunners (in such capacity, collectively, the “ Lead Arrangers ”), LEHMAN COMMERCIAL PAPER INC., as syndication agent (in such capacity, and together with its successors in such capacity, the “ Syndication Agent ”), HARRIS NESBITT FINANCING, INC., LASALLE BANK NATIONAL ASSOCIATION, and U.S. BANK NATIONAL ASSOCIATION, as co-documentation agents (in such capacity, and together with its successors in such capacity, the “ Co-Documentation Agents ”), and BEAR STEARNS CORPORATE LENDING INC., as administrative agent (in such capacity, and together with its successors in such capacity, the “ Administrative Agent ”).
The parties hereto hereby agree as follows:
SECTION 1 . DEFINITIONS1.1. Defined Terms . As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.
“ Acquired Entity ”: as defined in the definition of “Permitted Acquisition”.
“ Addendum :” an instrument, substantially in the form of Exhibit J, by which a Lender becomes a party to this Agreement as of the Closing Date.
“ Adjustment Date ”: as defined in the Pricing Grid.
“ Administrative Agent ”: as defined in the preamble to this Agreement.
“ Affiliate ”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
“ Agents ”: the collective reference to the Syndication Agent, the Co-Documentation Agents, the Lead Arrangers and the Administrative Agent, which term shall include, for purposes of Section 10 only, the Issuing Lender.
“ Aggregate Exposure ”: with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal amount of such Lender’s Term Loans and (ii) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.
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“ Aggregate Exposure Percentage ”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.
“ Agreement ”: this Credit Agreement.
“ Allotted Dispositions ”: (a) prior to the first anniversary of the Closing Date, the Disposition of those customer contracts or alarm monitoring operations that are described on Schedule 1.1(a); and (b) during each year thereafter, Dispositions of customer contracts or alarm monitoring operations for cash proceeds not to exceed $25,000,000 in any one fiscal year; provided that no more than $50,000,000 of Allotted Dispositions pursuant to this clause (b) shall be permitted in the aggregate.
“ Applicable Margin ”: for each Type of Loan, the rate per annum set forth under the relevant column heading below:
provided , that, on and after the first Adjustment Date (as defined in the Pricing Grid) occurring after the completion of two full fiscal quarters of the Borrower after the Closing Date, the Applicable Margin with respect to Revolving Loans and Swingline Loans will be determined pursuant to the Pricing Grid.
“ Application ”: an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to open a Letter of Credit.
“ Approved Fund ”: (a) a CLO and (b) with respect to any Lender that is a fund which invests in commercial loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.
“ Asset Sale ”: any Disposition of Property or series of related Dispositions of Property (excluding any such Disposition permitted by Section 8.5) that yields gross proceeds to any Group Member (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $500,000.
“ Assignee ”: as defined in Section 11.6(b).
“ Assignment and Assumption ”: an Assignment and Assumption, substantially in the form of Exhibit E.
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“ Available Revolving Commitment ”: as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment then in effect minus (b) such Lender’s Revolving Extensions of Credit then outstanding; provided that, in calculating any Lender’s Revolving Extensions of Credit for the purpose of determining such Lender’s Available Revolving Commitment pursuant to Section 3.5, the aggregate principal amount of Swingline Loans then outstanding shall be deemed to be zero.
“ Base Rate ”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%. For purposes hereof: “ Prime Rate ” shall mean the rate of interest per annum publicly announced from time to time by the Reference Bank as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by the Reference Bank in connection with extensions of credit to debtors). Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
“ Base Rate Loans ”: Loans the rate of interest applicable to which is based upon the Base Rate.
“ Benefited Lender ”: as defined in Section 11.7(a).
“ Board ”: the Board of Governors of the Federal Reserve System of the United States (or any successor).
“ Borrower ”: as defined in the preamble to this Agreement.
“ Borrowing Date ”: any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder.
“ Business ”: as defined in Section 5.17(b).
“ Business Day ”: a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, provided , that with respect to notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.
“ Capital Expenditures ”: for any period, with respect to any Person, the aggregate of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that should be capitalized under GAAP on a consolidated balance sheet of such Person and its Subsidiaries; provided , that Capital Expenditures shall not include expenditures included in the definition of Net Cash Investment Costs.
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“ Capital Lease Obligations ”: as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.
“ Capital Stock ”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.
“ Cash Equivalents ”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of twelve months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by Standard & Poor’s Ratings Services (“ S&P ”) or P-2 by Moody’s Investors Service, Inc. (“ Moody’s ”), or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within twelve months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition or of a recognized securities dealer having combined capital and surplus of not less than $500,000,000, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition or money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.
“ CLO ”: any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender.
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“ Closing Date ”: the date on which the conditions precedent set forth in Section 6.1 shall have been satisfied or waived.
“ Code ”: the Internal Revenue Code of 1986, as amended from time to time.
“ Co-Documentation Agents ”: as defined in the preamble to this Agreement.
“ Collateral ”: all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.
“ Commitment ”: as to any Lender, the sum of the Term Commitment and the Revolving Commitment of such Lender.
“ Commitment Fee Rate ”: 0.50% per annum.
“ Commonly Controlled Entity ”: an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.
“ Compliance Certificate ”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit B.
“ Conduit Lender ”: any special purpose entity organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument, subject to the consent of the Administrative Agent and the Borrower (which consent shall not be unreasonably withheld); provided , that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and provided , further , that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to Section 4.9, 4.10, 4.11 or 11.5 than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender or (b) be deemed to have any Commitment.
“ Confidential Information Memorandum ”: the Confidential Information Memorandum dated March 2005 and furnished to the Lenders.
“ Consolidated Current Assets ”: at any date, all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries at such date.
“ Consolidated Current Liabilities ”: at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries at such date, but
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excluding (a) the current portion of any Funded Debt of Holdings and its Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness consisting of Revolving Loans or Swingline Loans to the extent otherwise included therein.
“ Consolidated EBITDA ”: for any period, Consolidated Net Income for such period
plus , without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period (except in the case of (i) below), the sum of:
(a) income tax expense (including, without duplication, franchise and foreign withholding taxes and any state single business unitary or similar tax, to the extent classified as income tax expense on the consolidated income statement of Holdings and its Subsidiaries in accordance with GAAP),
(b) interest expense, amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans),
(c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill), deferred customer acquisition costs and organization costs,
(e) any extraordinary charges, expenses or losses determined in accordance with GAAP,
(f) non-cash compensation expenses arising from the issuance, vesting or exercise of stock, options to purchase stock, stock appreciation rights and other equity awards to the management, directors, officers, consultants and other employees of Holdings or any of its Subsidiaries,
(g) any other noncash charges, noncash expenses or noncash losses of the Borrower or any of its Subsidiaries for such period (excluding any such charge, expense or loss incurred in the ordinary course of business that constitutes an accrual of or a reserve for cash charges for any future period); provided , however , that cash payments made in such period or in any future period in respect of such noncash charges, expenses or losses incurred after the Closing Date (excluding any such charge, expense or loss incurred in the ordinary course of business that constitutes an accrual of or a reserve for cash charges for any future period) shall be subtracted from Consolidated Net Income in calculating Consolidated EBITDA in the period when such payments are made,
(h) all reasonable one-time costs, fees, expenses and charges related to any permitted Investment, Permitted Acquisition, issuance of equity, recapitalization, reorganization or asset disposition,
(i) cash proceeds of business interruption insurance,
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(j) management and transaction fees and related expenses paid under the Management Agreement substantially in the form most recently delivered to the Administrative Agent prior to the Closing Date, and without further modification thereto as to amounts payable thereunder,
(k) any non-recurring charges, expenses or losses not exceeding, together with expenses under clause (l), $1.75 million in each of calendar years 2005 and 2006, and $1.0 million in each calendar year thereafter, and
(l) expenses incurred in work force reductions such as severance, key employee retention plans, and unfavorable lease payments or accruals for such payments not exceeding, together with amounts under clause (k), $1.75 million in each of calendar years 2005 and 2006, and $1.0 million in each calendar year thereafter,
minus , to the extent included in the statement of such Consolidated Net Income for such period, the sum of:
(i) interest income,
(ii) any extraordinary income or gains determined in accordance with GAAP, and
(iii) any other non-cash income (excluding (x) any items that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period that are described in the parenthetical to clause (g) above and (y) items representing ordinary course accruals of cash to be received in future periods), all as determined on a consolidated basis.
For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “ Reference Period ”) pursuant to any determination of the Consolidated Leverage Ratio, (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period. As used in this definition, “ Material Acquisition ” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of $5,000,000; and “Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $5,000,000. Notwithstanding the foregoing, Consolidated EBITDA for the third and fourth fiscal quarters of 2004 shall be deemed to be $22,900,000, and $21,300,000, respectively.
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“ Consolidated Interest Coverage Ratio ”: for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period.
“ Consolidated Interest Expense ”: for any period, total cash interest expense (including that attributable to Capital Lease Obligations) of Holdings and its Subsidiaries for such period with respect to all outstanding Indebtedness of Holdings and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Hedge Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP). Notwithstanding anything to the contrary contained herein, for purposes of calculating Consolidated Interest Expense (a) for the period of four consecutive fiscal quarters ending June 30, 2005, Consolidated Interest Expense for such period shall be deemed to be an amount equal to Consolidated Interest Expense for the fiscal quarter ending June 30, 2005 multiplied by four, (b) for the period of four consecutive fiscal quarters ending September 30, 2005, Consolidated Interest Expense for such period shall be deemed to be an amount equal to Consolidated Interest Expense for the period of two consecutive fiscal quarters ending September 30, 2005 multiplied by two and (c) for the period of four consecutive fiscal quarters ending December 31, 2005, Consolidated Interest Expense for such period shall be deemed to be an amount equal to Consolidated Interest Expense for the period of three consecutive fiscal quarters ending December 31, 2005 multiplied by 1.333.
“ Consolidated Leverage Ratio ”: as of the last day of any period, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.
“ Consolidated Net Income ”: for any period, the consolidated net income (or loss) of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.
“ Consolidated Total Debt ”: at any date, the aggregate principal amount of all Indebtedness of Holdings and its Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Working Capital ”: at any date, the difference of Consolidated Current Assets on such date minus Consolidated Current Liabilities on such date.
“ Continuing Directors ”: the directors of Holdings on the Closing Date, after giving effect to the transactions contemplated hereby, and each other director, if, in each case,
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such other director’s nomination for election to the board of directors of Holdings is recommended by at least a majority of the then Continuing Directors or such other director receives the vote of the Permitted Investors in his or her election by the shareholders of Holdings.
“ Contractual Obligation ”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“ Control Investment Affiliate ”: as to any Person, any other Person 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.
“ Default ”: any of the events specified in Section 9, whether or not any requirement set forth in Section 9 for the giving of notice, the lapse of time, or both, has been satisfied.
“ Disposition ”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “ Dispose ” and “ Disposed of ” shall have correlative meanings.
“ Dollars ” and “ $ ”: dollars in lawful currency of the United States.
“ Domestic Subsidiary ”: any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States.
“ ECF Percentage ”: with respect to any fiscal year of Holdings ending on or after December 31, 2006, 75%; provided that the ECF Percentage shall be reduced to 50% if the Consolidated Leverage Ratio as of the last day of such fiscal year is less than 3.0 to 1.0, and the ECF Percentage shall be further reduced to 25% if the Consolidated Leverage Ratio as of the last day of such fiscal year is less than 2.0 to 1.0.
“ Eligible Assignee ” : (a) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000; (b) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having a combined capital and surplus in a dollar equivalent amount of at least $100,000,000; provided , however , that such bank is acting through a branch or agency located in the country in which it is organized or another country that is also a member of the OECD; (c) an insurance company, mutual fund or other entity which is regularly engaged in making, purchasing or investing in loans or securities, or any other financial institution organized under the laws of the United States, any state thereof, any other country that is a member of the OECD or a political subdivision of any such country with assets, or assets
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under management, in a dollar equivalent amount of at least $100,000,000; (d) any Affiliate of a Lender or an Approved Fund of a Lender; (e) any other entity (other than a natural person) which is an “accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses or investing activities including, but not limited to, insurance companies, mutual funds and investment funds; (f) any other entity if at the time of the applicable assignment a Default or Event of Default shall be continuing and (g) any other entity consented to by the Administrative Agent and the Borrower.
“ Environmental Laws ”: any and all applicable foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning occupational safety and health or protection of the environment, as now or may at any time hereafter be in effect.
“ ERISA ”: the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ Eurocurrency Reserve Requirements ”: for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.
“ Eurodollar Base Rate ”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the “ Eurodollar Base Rate ” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.
“ Eurodollar Loans ”: Loans the rate of interest applicable to which is based upon the Eurodollar Rate.
“ Eurodollar Rate ”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):
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“ Eurodollar Tranche ”: the collective reference to Eurodollar Loans under a particular Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).
“ Event of Default ”: any of the events specified in Section 9, provided that any requirement specified in Section 9 for the giving of notice, the lapse of time, or both, has been satisfied.
“ Excess Cash Flow ”: for any fiscal year of Holdings, the excess, if any, of:
(a) the sum, without duplication, of:
(i) Consolidated Net Income for such fiscal year,
(ii) the amount of all non-cash charges deducted in arriving at such Consolidated Net Income, other than any charges that represent an accrual of a reserve for cash charges for any future period,
(iii) depreciation and amortization expense,
(iv) amortization of intangibles (including, but not limited to, goodwill), deferred customer acquisition costs and organization costs,
(v) the increase in long-term liabilities excluding (a) the long-term portion of debt, (b) the long-term portion of Capital Lease Obligations, and (c) deferred customer acquisition revenues for such fiscal year,
(vi) the aggregate net amount of non-cash loss on the Disposition of Property by Holdings and its Subsidiaries during such fiscal year (other than sales of inventory in the ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income,
(v) cash proceeds of business interruption insurance,
(vi) the decrease in Consolidated Working Capital for such fiscal year, and
(vii) the decrease in long-term assets excluding (a) property, plant and equipment, (b) purchased accounts, (c) goodwill, (d) intangible assets, (e) debt issuance costs, and (f) deferred customer acquisition costs for such fiscal year, minus
(b) the sum, without duplication, of:
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(i) the amount of all non-cash credits included in arriving at such Consolidated Net Income,
(ii) the amortization of deferred customer acquisition revenue,
(iii) the aggregate amount actually paid by Holdings and its Subsidiaries in cash, and expenditures for which payables have been recorded but not yet paid, during such fiscal year on account of Capital Expenditures (excluding the principal amount of Indebtedness incurred to finance such expenditures (but including repayments of any such Indebtedness incurring during such period or any prior period) and any such expenditures financed with the proceeds of any Reinvestment Deferred Amount),
(iv) the aggregate amount of all regularly scheduled principal payments of Funded Debt (including the Term Loans) of Holdings and its Subsidiaries made during such fiscal year (other than in respect of Revolving Loans and any other revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder),
(v) an amount equal to the deferred customer acquisition costs during such fiscal year minus the deferred customer acquisition revenue during such fiscal year,
(vi) the increase in Consolidated Working Capital for such fiscal year,
(vii) the increase in long-term assets excluding (a) property, plant and equipment, (b) purchased accounts, (c) goodwill, (d) intangible assets, (e) debt issuance costs, and (f) deferred customer acquisition costs for such fiscal year,
(viii) the aggregate net amount of non-cash gain on the Disposition of Property by Holdings and its Subsidiaries during such fiscal year (other than sales of inventory in the ordinary course of business), to the extent included in arriving at such Consolidated Net Income,
(ix) all reasonable one-time costs, fees, expenses and charges and one-time payments constituting or related to any permitted Investments, Permitted Acquisitions, or equity issuances to the extent not deducted in arriving at such Consolidated Net Income,
(x) management and transaction fees and related expenses paid under the Management Agreement (substantially in the form most recently delivered to the Administrative Agent prior to the Closing Date, and without further modification thereto as to amounts payable thereunder) to the extent not deducted in arriving at such Consolidated Net Income,
(xi) Restricted Payments made in cash which were permitted to be made under this Credit Agreement, and
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(xii) the decrease in long-term liabilities excluding (a) the long-term portion of debt, (b) the long-term portion of Capital Lease Obligations, and (c) deferred customer acquisition revenues for such fiscal year.
To the extent any Person is disregarded from the definition of “Consolidated Net Income” pursuant to the proviso thereto in any period, such Person shall be so disregarded from the calculation of Excess Cash Flow hereunder during such period. The aggregate amount of optional prepayments of the Term Loans, and prepayments of Revolving Loans and Swingline Loans to the extent accompanied by permanent reductions in Revolving Commitments, made during any fiscal year shall reduce on a dollar-for-dollar basis the required amount of the mandatory prepayment to be made pursuant to Section 4.2(d) with respect to the Excess Cash Flow for such fiscal year.
“ Excess Cash Flow Application Date ”: as defined in Section 4.2.
“ Excluded Indebtedness ”: all Indebtedness permitted by Section 8.2.
“ Facility ”: each of (a) the Term Commitments and the Term Loans made thereunder (the “ Term Facility ”), and (b) the Revolving Commitments and the extensions of credit made thereunder (the “ Revolving Facility ”).
“ Federal Funds Effective Rate ”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Reference Lender from three federal funds brokers of recognized standing selected by it.
“ Foreign Subsidiary ”: any Subsidiary of the Borrower that is not a Domestic Subsidiary.
“ Funded Debt ”: as to any Person, all Indebtedness of such Person that has a scheduled maturity (excluding any mandatory prepayments) more than one year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of the Borrower, Indebtedness in respect of the Loans.
“ Funding Office ”: the office of the Administrative Agent specified in Section 11.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.
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“ GAAP ”: generally accepted accounting principles in the United States as in effect from time to time, except that for purposes of Section 8.1, GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 5.1(b). In the event that any Accounting Change (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the Borrower’s financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. “ Accounting Changes ” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC.
“ Governmental Authority ”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).
“ Group Members ”: the collective reference to Holdings, the Borrower and their respective Subsidiaries.
“ Guarantee and Collateral Agreement ”: the Guarantee and Collateral Agreement to be executed and delivered by Holdings, the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit A.
“ Guarantee Obligation ”: as to any Person (the “ guaranteeing person ”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “ primary obligations ”) of any other third Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided , however , that the term Guarantee Obligation shall not include endorsements of instruments for
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deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation or, if recourse is limited to a specific asset, the fair market value of such asset, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.
“ Guarantors ”: the collective reference to Holdings and the Subsidiary Guarantors.
“ Hedge Agreements ”: any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock, option or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Hedge Agreement.
“ Holdings ”: as defined in the preamble to this Agreement.
“ Indebtedness ”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements, (g) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, and (j) for the purposes of Sections 8.2 and 9(e) only, all obligations of such Person in respect of Hedge Agreements; provided that Indebtedness shall not include deferred revenue, deferred tax liabilities and unclaimed property. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general
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partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.
“ Insolvency ”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.
“ Insolvent ”: pertaining to a condition of Insolvency.
“ Intellectual Property ”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.
“ Interest Payment Date ”: (a) as to any Base Rate Loan (other than any Swingline Loan), the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period, (d) as to any Loan (other than any Revolving Loan that is a Base Rate Loan and any Swingline Loan), the date of any repayment or prepayment made in respect thereof and (e) as to any Swingline Loan, the day that such Loan is required to be paid.
“ Interest Period ”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six or (if available to all Lenders under the relevant Facility) nine or twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six or (if available to all Lenders under the relevant Facility) nine or twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent no later than 2:00 P.M., New York City time, on the date that is three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;
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(ii) the Borrower may not select an Interest Period under a particular Facility that would extend beyond the Revolving Termination Date or beyond the date final payment is due on the Term Loans;(iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and(iv) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest Period for such Loan.“ Investments ”: as defined in Section 8.8.
“ Issuing Lender ”: LaSalle Bank National Association, in its capacity as issuer of any Letter of Credit.
“ L/C Commitment ”: $10,000,000.
“ L/C Fee Payment Date ”: the last day of each March, June, September and December and the last day of the Revolving Commitment Period.
“ L/C Obligations ”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.11.
“ L/C Participants ”: the collective reference to all the Revolving Lenders other than the Issuing Lender.
“ Lead Arrangers ”: as defined in the recitals to this Agreement.
“ Lenders ”: as defined in the preamble hereto; provided , that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include any Conduit Lender.
“ Letters of Credit ”: as defined in Section 3.7(a).
“ Lien ”: any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement with respect to property of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).
“ Loan ”: any loan made by any Lender pursuant to this Agreement.
“ Loan Documents ”: this Agreement, the Security Documents and the Notes.
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“ Loan Parties ”: each Group Member that is a party to a Loan Document.
“ Majority Facility Lenders ”: with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans or the Total Revolving Extensions of Credit, as the case may be, outstanding under such Facility (or, in the case of the Revolving Facility, prior to any termination of the Revolving Commitments, the holders of more than 50% of the Total Revolving Commitments).
“ Management Agreement ”: collectively, those certain letter agreements, by and between (i) the Borrower and Quadrangle Advisors LLC, and (ii) the Borrower and Quadrangle Debt Recovery Advisors LLC, setting forth certain terms regarding payments from the Borrower for management and advisory services rendered by such entities.
“ Material Adverse Effect ”: a material adverse effect on (a) the business, assets, property, financial condition or results of operations of the Borrower and its Subsidiaries taken as a whole or (b) the validity or enforceability of the Loan Documents or the rights or remedies of the Agents or the Lenders hereunder or thereunder or the validity, perfection or priority of the Administrative Agent’s Liens on the Collateral.
“ Materials of Environmental Concern ”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes as such are defined or otherwise regulated in or under any Environmental Law, including asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
“ Maturity Date ”: April 18, 2011; provided that the Maturity Date shall automatically become June 30, 2008 if the Senior Subordinated Notes are not repaid (or refinanced pursuant to a Permitted Refinancing) in full on or prior to such date.
“ Mortgaged Properties ”: the real properties listed on Schedule 1.1(c), as to which the Administrative Agent for the benefit of the Lenders shall be granted a Lien pursuant to the Mortgages.
“ Mortgages ”: each of the mortgages and deeds of trust made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit D (with such changes thereto as shall be advisable under the law of the jurisdiction in which such mortgage or deed of trust is to be recorded).
“ Multiemployer Plan ”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“ Net Cash Investment Cost ”: for any period, with respect to any Person and its Subsidiaries, the excess of (a) the sum of (i) the aggregate amount of direct and indirect installation expenses related to acquiring new customers, (ii) the aggregate amount of direct and indirect selling expenses related to acquiring new customers and (iii) the aggregate amount paid, directly or indirectly, for acquisition of subscriber accounts from any third party, minus (b) the aggregate system installation revenues related to acquiring new customers; each of clause (a)(i),
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(a)(ii) and (b) determined without the inclusion of amortization of deferred costs or amortization of deferred revenues, as appropriate, in that period, and with the inclusion of costs deferred or revenues deferred, as appropriate, in that period, and each amount herein in accordance with GAAP.
“ Net Cash Proceeds ”: (a) in connection with any Asset Sale, Allotted Disposition, equity issuance of Holdings or Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or by the Disposition of any non-cash consideration received in connection therewith or otherwise, but only as and when received) of such Asset Sale, Allotted Disposition or Recovery Event, net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale, Allotted Disposition or Recovery Event (other than any Lien pursuant to a Security Document) and other reasonable out of pocket fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and reasonable reserves required to be taken in connection therewith pursuant to GAAP and (b) in connection with any issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.
“ Non-Excluded Taxes ”: as defined in Section 4.10(a).
“ Non-U.S. Lender ”: as defined in Section 4.10(d).
“ Notes ”: the collective reference to any promissory note evidencing Loans.
“ Obligations ”: the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to any Agent or to any Lender (or, in the case of Specified Hedge Agreements, any Affiliate of any Agent or any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge Agreement or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to any Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise; provided , that (i) obligations of the Borrower or any Subsidiary under any Specified Hedge Agreement shall be secured and guaranteed pursuant to the Security Documents only to the extent that, and for so long as, the other Obligations are so secured and guaranteed and (ii) any release of Collateral or Guarantors or amendments to the Security Documents effected in the
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manner permitted by this Agreement shall not require the consent of holders of obligations under Specified Hedge Agreements.
“ Old Credit Facility ”: the Borrower’s existing revolving credit facility, pursuant to which approximately $78,000,000 is outstanding on the Closing Date prior to the making of the Loans hereunder.
“ Other Taxes ”: any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
“ Participant ”: as defined in Section 11.6(b).
“ PBGC ”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).
“ Permitted Acquisitions ”: the acquisition by the Borrower or any of its Subsidiaries of all or substantially all of the assets of a Person or line of business of such Person, or all of the Capital Stock of a Person (in each case referred to herein as the “ Acquired Entity ”); provided that (a) the Acquired Entity shall be a going concern and shall be in a related line of business as that of the Borrower and its Subsidiaries as conducted during the current and most recently concluded calendar year; (b) all of the assets of the Acquired Entity shall be located in the United States ( provided that such acquisition may involve assets located outside the United States so long as the sum of the aggregate value of such foreign assets acquired shall be deemed to be an Investment for purposes of clause (p) of Section 8.8 and shall be permissible under such clause of such Section); (c) such acquisition shall be consensual and shall have been approved by the Acquired Entity’s board of directors (or other applicable governing body); (d) either (i) the consideration paid in connection with such acquisition shall be funded solely with the Net Cash Proceeds from an Allotted Disposition with respect to which a Reinvestment Notice shall have been delivered hereunder or (ii) the cash consideration (net of any Net Cash Proceeds received from equity issuances by Holdings or issuances of subordinated Indebtedness by Holdings to the Sponsor pursuant to Section 8.2(p), in each case, to the extent such proceeds are substantially simultaneously applied to fund such Permitted Acquisition) paid in connection with such acquisition and any other acquisitions under this definition that is not funded as described in clause (i) above shall not in the aggregate exceed $15,000,000 during any fiscal year and $35,000,000 in the aggregate during the term of this Agreement; (e) at the time of such transaction (i) both before and after giving effect thereto, no Event of Default or Default shall have occurred and be continuing; and (ii) the Borrower would be in compliance with the covenants set forth in Section 8.1, in each case, as of the most recently completed period ending prior to such transaction for which the financial statements and certificates required by Section 7.1(a) or 7.1(b) and Section 7.2 were required to be delivered after giving pro forma effect to such transaction and to any other event occurring after such period as to which pro forma recalculation is appropriate (including any other transaction described in this definition occurring after such period) as if such transaction (and the occurrence, refinancing or assumption of any Indebtedness in connection therewith) had occurred as of the first day of such period; (f)
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at least five Business Days prior to the proposed date of the consummation of such acquisition, the Borrower shall have delivered to the Administrative Agent a Compliance Certificate demonstrating compliance with the requirements of clause (e)(ii) above (which shall have attached thereto reasonably detailed backup data and calculations showing such compliance); (g) Holdings, the Borrower and the Subsidiaries of the Borrower shall not incur or assume any Indebtedness in connection with such acquisition, except as permitted by Section 8.2; and (h) the Borrower and its Subsidiaries shall comply, and shall cause the Acquired Entity to comply, with the applicable provisions of Sections 7.10 and 7.11 and the Security Documents.
“ Permitted Investors ”: the collective reference to the Sponsor and its Control Investment Affiliates.
“ Permitted Refinancing ” the refinancing of 100% of the Senior Subordinated Notes with the proceeds of Indebtedness of the Borrower or Holdings issued pursuant to documentation (a) containing terms that provide for (i) a final maturity at least six months after the Maturity Date, (ii) a fixed interest rate consistent with then prevailing market conditions, or a floating interest rate if the Borrower obtains interest rate hedging contracts on terms which are reasonably satisfactory to the Administrative Agent that effectively fix the interest rate on such indebtedness until at least the Maturity Date, (iii) no amortization of the principal amount of such Indebtedness prior to the date that is six months after the Maturity Date, (iv) subordination on terms no less favorable (taken as a whole) to the Lenders than those in the indenture for the Senior Subordinated Notes as in effect on the Closing Date, and (v) no security or collateral with respect to the obligations thereunder or (b) on terms otherwise acceptable to the Administrative Agent.
“ Person ”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
“ Plan ”: at a particular time, any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“ Pricing Grid ”: the pricing grid attached hereto as Annex A.
“ Pro Forma Balance Sheet ”: as defined in Section 5.1(a).
“ Projections ”: as defined in Section 7.2(c).
“ Properties ”: as defined in Section 5.17(a).
“ Property ”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Capital Stock.
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“ Qualified Counterparty ”: with respect to any Specified Hedge Agreement, any counterparty thereto that, at the time such Specified Hedge Agreement was entered into, was a Lender or an Affiliate of a Lender or an Agent or an Affiliate of an Agent.
“ Qualified PO ”: an underwritten public offering of common stock of (and by) Holdings pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act, which public offering results in gross cash proceeds to Holdings of $50,000,000 or more.
“ Recovery Event ”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member (excluding business interruption insurance).
“ Reference Bank ”: Deutsche Bank.
“ Refinanced Indebtedness ”: the Senior Notes and the Old Credit Facility.
“ Refinancing ”: the repayment in full, with the proceeds of the Term Loans and approximately $3,200,000 of cash, of the Refinanced Indebtedness.
“ Refunded Swingline Loans ”: as defined in Section 3.4(b).
“ Refunding Date ”: as defined in Section 3.4(c).
“ Register ”: as defined in Section 11.6(b).
“ Regulation U ”: Regulation U of the Board as in effect from time to time.
“ Reimbursement Obligation ”: the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 3.11 for amounts drawn under Letters of Credit.
“ Reinvestment Deferred Amount ”: with respect to any Reinvestment Event, the portion of Net Cash Proceeds received by any Group Member in connection therewith that are subject to the mandatory prepayment requirements of Section 4.2(a), (c) or (e) but are not applied to prepay the Term Loans or reduce the Revolving Commitments pursuant to Section 4.2(a), (c) or (e) as a result of the delivery of a Reinvestment Notice.
“ Reinvestment Event ”: any Asset Sale, equity issuance of Holdings, Recovery Event or Allotted Disposition in respect of which the Borrower has delivered a Reinvestment Notice.
“ Reinvestment Notice ”: a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing and that the Borrower (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale, equity issuance of Holdings, Recovery Event or Allotted Disposition (i) to acquire or repair assets useful in (or, pursuant to a Permitted Acquisition, any Acquired Entity engaged in) the business of providing alarm monitoring services, (ii) for
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expenditures included in the definition of Net Cash Investment Costs, or (iii) solely in the case of Net Cash Proceeds of any equity issuance of Holdings, to prepay all or any portion of the Senior Subordinated Notes.
“ Reinvestment Prepayment Amount ”: with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended (and, prior to the date that is 360 days following the receipt of Net Cash Proceeds from the relevant Reinvestment Event, amounts subject to a binding commitment (evidenced by documentation reasonably satisfactory to the Administrative Agent) to be expended within such period as evidenced in the applicable Reinvestment Notice) prior to the relevant Reinvestment Prepayment Date (i) to acquire or repair assets useful in (or, pursuant to a Permitted Acquisition, any Acquired Entity engaged in) the business of providing alarm monitoring services, (ii) for expenditures included in the definition of Net Cash Investment Costs, or (iii) solely in the case of Net Cash Proceeds of any equity issuance of Holdings, to prepay all or any portion of the Senior Subordinated Notes.
“ Reinvestment Prepayment Date ”: with respect to any Reinvestment Event, the earlier of (a) the date occurring 270 days after the Net Cash Proceeds from such Reinvestment Event are received and (b) the date on which the Borrower shall have determined not to, or shall have otherwise ceased to, acquire or repair assets useful in (or any Acquired Entity engaged in) the business of providing alarm monitoring services or for Net Cash Investment Costs (or, in the case of Net Cash Proceeds of any equity issuance of Holdings, to prepay all or any portion of the Senior Subordinated Notes) with all or any portion of the relevant Reinvestment Deferred Amount; provided that, as to amounts evidenced in any Reinvestment Notice to be committed for expenditure within 360 days following the receipt of Net Cash Proceeds from the relevant Reinvestment Event, the date set forth in clause (a) hereof shall be extended from 270 to 360 days.
“ Reorganization ”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.
“ Reportable Event ”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under applicable regulations or any successor thereto.
“ Required Lenders ”: at any time, the holders of more than 50% of (a) until the funding of the Term Loans, the Commitments then in effect and (b) thereafter, the sum of (i) the aggregate unpaid principal amount of the Term Loans then outstanding and (ii) the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding.
“ Requirement of Law ”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
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“ Responsible Officer ”: the chief executive officer, president or chief financial officer of the Borrower, but in any event, with respect to financial matters, the chief financial officer of the Borrower.
“ Restricted Payments ”: as defined in Section 8.6.
“ Revolving Commitment ”: as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Commitment” under such Lender’s name on such Lender’s Addendum or in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original amount of the Total Revolving Commitments is $25,000,000.
“ Revolving Commitment Period ”: the period from and including the Closing Date to the Revolving Termination Date.
“ Revolving Extensions of Credit ”: as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, (b) such Lender’s Revolving Percentage of the L/C Obligations then outstanding and (c) such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding.
“ Revolving Lender ”: each Lender that has a Revolving Commitment or that holds Revolving Loans.
“ Revolving Loans ”: as defined in Section 3.1(a).
“ Revolving Percentage ”: as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments (or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the aggregate principal amount of the Revolving Loans then outstanding).
“ Revolving Termination Date ”: April 18, 2010; provided that the Revolving Termination Date shall automatically become June 30, 2008 if the Senior Subordinated Notes are not repaid (or refinanced pursuant to a Permitted Refinancing) in full on or before such date.
“ SEC ”: the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.
“ Secured Parties ”: as defined in the Guarantee and Collateral Agreement.
“ Securities Act ”: the Securities Act of 1933, as amended from time to time.
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“ Security Documents ”: the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.
“ Senior Notes ”: the Borrower’s 7.375% Senior Notes due 2005, of which an aggregate principal amount of approximately $164.3 million is outstanding on the Closing Date (prior to the initial funding of the Loans and the use of proceeds thereof).
“ Senior Subordinated Notes ”: the Borrower’s outstanding 8.125% Senior Subordinated Notes due 2009.
“ Single Employer Plan ”: any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.
“ Solvent ”: with respect to any Person, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “probable liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, (d) such Person will generally be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured, and (e) such Person has not executed any Loan Documents with actual intent to hinder, delay or defraud either present or future creditors; provided , that in computing the amount of any contingent, unliquidated, unmatured or disputed claim at any time, it is intended that such claims will be computed at the amount which, in light of all facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual, liquidated or matured claim
“ Specified Change of Control ”: a “Change of Control” (or any other defined term having a similar purpose) as defined in the indenture governing the Senior Subordinated Notes.
“ Specified Hedge Agreement ”: any Hedge Agreement (a) entered into by (i) the Borrower or any of its Subsidiaries and (ii) any Qualified Counterparty and (b) that has been designated by such Agent or Lender or Affiliate thereof, as the case may be, and the Borrower, by notice to the Administrative Agent, as a Specified Hedge Agreement. The designation of any Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the Qualified Counterparty that is a party thereto any rights in connection with the management or release of
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any Collateral or of the obligations of any Guarantor under the Guarantee and Collateral Agreement.
“ Sponsor ”: Quadrangle Capital Partners LP, Quadrangle Capital Partners-A LP, Quadrangle Select Partners LP, any other Persons managed by Quadrangle GP Investors, LLC, Quadrangle Master Funding Ltd, any other Persons managed by Quadrangle Debt Recovery Advisors LLC and their respective affiliates.
“ Subordinated Intercompany Note ”: with respect to any Group Member as the maker thereof, a promissory note substantially in the form of Exhibit K (with such modifications as the Administrative Agent may agree to), which promissory note shall evidence all intercompany loans which may be made from time to time by any payee thereunder (whether or not reflected on the attached schedule thereto); provided that the amounts reflected as owing pursuant to any such notes shall only be required to be updated on a quarterly basis.
“ Subsidiary ”: as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Holdings.
“ Subsidiary Guarantor ”: each Domestic Subsidiary of the Borrower.
“ Swingline Commitment ”: the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 3.3 in an aggregate principal amount at any one time outstanding not to exceed $2,500,000.
“ Swingline Lender ”: Bear Stearns Corporate Lending Inc., in its capacity as the lender of Swingline Loans.
“ Swingline Loans ”: as defined in Section 3.3.
“ Swingline Participation Amount ”: as defined in Section 3.4.
“ Syndication Agent ”: as defined in the preamble to this Agreement.
“ Syndication Date ”: the date on which the Syndication Agent and the Lead Arrangers complete the syndication of the Facilities and the entities selected in such syndication process become parties to this Agreement, which date shall be no later than 90 days following the Closing Date.
“ Term Commitment ”: as to any Lender, the obligation of such Lender, if any, to make a Term Loan to the Borrower hereunder in a principal amount not to exceed the amount set
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forth under the heading “Term Commitment” under such Lender’s name on such Lender’s Addendum. The original aggregate amount of the Term Commitments is $250,000,000.
“ Term Lender ”: each Lender that has a Term Commitment or that holds a Term Loan.
“ Term Loan ”: as defined in Section 2.1.
“ Term Percentage ”: as to any Term Lender at any time, the percentage which such Lender’s Term Commitment then constitutes of the aggregate Term Commitments (or, at any time after the funding of the Term Loans, the percentage which the aggregate principal amount of such Lender’s Term Loans then outstanding constitutes of the aggregate principal amount of the Term Loans then outstanding).
“ Total Revolving Commitments ”: at any time, the aggregate amount of the Revolving Commitments then in effect.
“ Total Revolving Extensions of Credit ”: at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders outstanding at such time.
“ Transferee ”: any Assignee or Participant.
“ Type ”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.
“ United States ”: the United States of America.
“ Wholly Owned Subsidiary ”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.
“ Wholly Owned Subsidiary Guarantor ”: any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.
1.2. Other Definitional Provisions . (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Capital Stock, securities, revenues, accounts, leasehold interests and
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contract rights, and (v) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time (subject to any applicable restrictions hereunder).(c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.(e) The expressions, “payment in full,” “paid in full” and any other similar terms or phrases when used herein with respect to the Obligations shall mean the payment in full, in immediately available funds, of all the Obligations.SECTION 2 . AMOUNT AND TERMS OF TERM COMMITMENTS
2.1 . Term Commitments . Subject to the terms and conditions hereof, each Term Lender severally agrees to make a term loan (a “ Term Loan ”) to the Borrower on the Closing Date in an amount not to exceed the amount of the Term Commitment of such Lender. The Term Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 4.3.
2.2 . Procedure for Term Loan Borrowing . The Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 10:00 A.M., New York City time, one Business Day prior to the anticipated Closing Date) requesting that the Term Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed. The Term Loans made on the Closing Date shall initially be Base Rate Loans and, unless otherwise agreed by the Administrative Agent in its sole discretion, no Term Loan may be converted into or continued as a Eurodollar Loan having an Interest Period in excess of one month prior to the Syndication Date. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Lender thereof. Not later than 12:00 Noon, New York City time, on the Closing Date each Term Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders in immediately available funds.
2.3 . Repayment of Term Loans . The Term Loan of each Term Lender shall mature in the following quarterly installments, commencing on June 30, 2005, each of which shall be in an amount equal to such Lender’s Term Percentage multiplied by the amount set forth below opposite such installment:
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SECTION 3 . AMOUNT AND TERMS OF REVOLVING COMMITMENTS
3.1 . Revolving Commitments . (a) Subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to
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the Borrower from time to time during the Revolving Commitment Period in an aggregate principal amount at any one time outstanding which, when added to such Lender’s Revolving Percentage of the sum of (i) the L/C Obligations then outstanding and (ii) the aggregate principal amount of the Swingline Loans then outstanding, does not exceed the amount of such Lender’s Revolving Commitment. During the Revolving Commitment Period the Borrower may use the Revolving Commitments by borrowing, prepaying and reborrowing the Revolving Loans in whole or in part, all in accordance with the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 3.2 and 4.3. (b) The Borrower shall repay all outstanding Revolving Loans on the Revolving Termination Date.3.2 . Procedure for Revolving Loan Borrowing . The Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 2:00 P.M., New York City time, (a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of Base Rate Loans) (provided that any such notice of a borrowing of Base Rate Loans under the Revolving Facility to finance payments required to be made pursuant to Section 3.5 may be given not later than 10:00 A.M., New York City time, on the date of the proposed borrowing), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Any Revolving Loans made prior to the Syndication Date shall initially be Base Rate Loans and, unless otherwise agreed by the Administrative Agent in its sole discretion, no Revolving Loan may be made as, converted into or continued as a Eurodollar Loan having an Interest Period in excess of one month prior to the Syndication Date. Each borrowing under the Revolving Commitments shall be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if the then aggregate Available Revolving Commitments are less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that the Swingline Lender may request, on behalf of the Borrower, borrowings under the Revolving Commitments that are Base Rate Loans in other amounts pursuant to Section 3.4. Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent by crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent. No Revolving Loans shall be made on the Closing Date.
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3.3 . Swingline Commitment . (a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to the Borrower under the Revolving Commitments from time to time during the Revolving Commitment Period by making swing line loans (“ Swingline Loans ”) to the Borrower; provided that (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in effect (notwithstanding that the Swingline Loans outstanding at any time, when aggregated with the Swingline Lender’s other outstanding Revolving Loans hereunder, may exceed the Swingline Commitment then in effect) and (ii) the Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving Commitments would be less than zero. During the Revolving Commitment Period, the Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be Base Rate Loans only. (b) The Borrower shall repay all outstanding Swingline Loans on the Revolving Termination Date.3.4 . Procedure for Swingline Borrowing; Refunding of Swingline Loans . (a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be received by the Swingline Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the amount of the Swingline Loan to be made by the Swingline Lender. The Administrative Agent shall make the proceeds of such Swingline Loan available to the Borrower on such Borrowing Date by depositing such proceeds in the account of the Borrower with the Administrative Agent on such Borrowing Date in immediately available funds. (b) The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, and on the third Business Day after the making of any Swingline Loan if no notice has yet been given shall, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Day’s notice given by the Swingline Lender no later than 12:00 Noon, New York City time, request each Revolving Lender to make, and each Revolving Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving Lender’s Revolving Percentage of the aggregate amount of the Swingline Loans (the “ Refunded Swingline Loans ”) outstanding on the date of such notice, to repay the Swingline Lender. Each Revolving Lender shall make the amount of such Revolving Loan available to the Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M., New York City time, one Business Day after the date of such notice. The proceeds of such Revolving Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded
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Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to charge the Borrower’s accounts with the Administrative Agent (up to the amount available in each such account) in order to immediately pay the amount of such Refunded Swingline Loans to the extent amounts received from the Revolving Lenders are not sufficient to repay in full such Refunded Swingline Loans.(c) If prior to the time a Revolving Loan would have otherwise been made pursuant to Section 3.4(b), one of the events described in Section 9(f) shall have occurred and be continuing with respect to the Borrower or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 3.4(b), each Revolving Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 3.4(b) (the “ Refunding Date ”), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the “ Swingline Participation Amount ”) equal to (i) such Revolving Lender’s Revolving Percentage multiplied by (ii) the sum of the aggregate principal amount of Swingline Loans then outstanding that were to have been repaid with such Revolving Loans.(d) Whenever, at any time after the Swingline Lender has received from any Revolving Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided , however , that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.(e) Each Revolving Lender’s obligation to make the Loans referred to in Section 3.4(b) and to purchase participating interests pursuant to Section 3.4(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Lender or the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 6; (iii) any adverse change in the condition (financial or otherwise) of the Borrower; (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other Revolving Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.3.5 . Commitment Fees, etc . (a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee for the period from and including the Closing Date to the last day of the Revolving Commitment Period, computed at the Commitment Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period for which payment is made, payable quarterly in
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arrears on the last day of each March, June, September and December and on the Revolving Termination Date, commencing on the first of such dates to occur after the date hereof. (b) The Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates previously agreed to in writing by the Borrower and the Administrative Agent.(c) The Borrower agrees to pay to the Lead Arrangers the fees in the amounts and on the dates previously agreed to in writing by the Borrower and the Lead Arrangers.3.6 . Termination or Reduction of Revolving Commitments . The Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total Revolving Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect.
3.7 . L/C Commitment . (a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Revolving Lenders set forth in Section 3.10(a), agrees to issue letters of credit (“ Letters of Credit ”) for the account of the Borrower on any Business Day during the Revolving Commitment Period in such form as may be agreed from time to time between the Issuing Lender and Borrower; provided that the Issuing Lender shall not issue any Letter of Credit if, (i) after giving effect to such issuance, the L/C Obligations would exceed the L/C Commitment, (ii) after giving effect to such issuance, the aggregate amount of the Available Revolving Commitments would be less than zero, or (iii) it has received notice of any existing Default or Event of Default. Each Letter of Credit shall (i) be denominated in Dollars, and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) unless cash collateralized in an account at the Issuing Bank, the date that is five Business Days prior to the Revolving Termination Date, provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above). (b) The Issuing Lender shall not at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.3.8 . Procedure for Issuance of Letter of Credit . The Borrower may from time to time request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing Lender at its address for notices specified herein an Application therefor, completed to the reasonable satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request. Upon receipt of any Application, the Issuing Lender will notify the Administrative Agent of the amount, the beneficiary and the requested expiration of the requested Letter of Credit, and upon receipt of
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confirmation from the Administrative Agent that after giving effect to the requested issuance, the Available Revolving Commitments would not be less than zero, the Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower (with, upon its request, a copy to the Administrative Agent) promptly following the issuance thereof. The Issuing Lender shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the Lenders, notice of the issuance of each Letter of Credit (including the amount thereof).
3.9 . Fees and Other Charges . (a) The Borrower will pay to the Issuing Lender a fee on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility, to be shared ratably among the Revolving Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. In addition, the Borrower shall pay to the Issuing Lender for its own account a fronting fee on the undrawn and unexpired amount of each Letter of Credit as agreed by the Borrower and the Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. (b) In addition to the foregoing fees, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.3.10 . L/C Participations . (a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued hereunder , in accordance with the terms hereof, and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Borrower is required to reimburse the Issuing Lender for and the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to the Administrative Agent upon demand of the Issuing Lender an amount equal to such L/C Participant’s Revolving Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. The Administrative Agent shall promptly forward such amounts to the Issuing Lender.
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(b) If any amount required to be paid by any L/C Participant to the Administrative Agent for the account of the Issuing Lender pursuant to Section 3.10(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit is not paid to the Administrative Agent for the account of the Issuing Lender within three Business Days after the date such payment is demanded, such L/C Participant shall pay to the Administrative Agent for the account of the Issuing Lender on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to Section 3.10(a) is not made available to the Administrative Agent for the account of the Issuing Lender by such L/C Participant within three Business Days after the date such payment is demanded, the Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Base Rate Loans under the Revolving Facility. A certificate of the Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error.(c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.10(a), the Administrative Agent or the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by the Issuing Lender), or any payment of interest on account thereof, the Administrative Agent or the Issuing Lender, as the case may be, will distribute to such L/C Participant its pro rata share thereof; provided , however , that in the event that any such payment received by Administrative Agent or the Issuing Lender, as the case may be, shall be required to be returned by the Administrative Agent or the Issuing Lender, such L/C Participant shall return to the Administrative Agent for the account of the Issuing Lender the portion thereof previously distributed by the Administrative Agent or the Issuing Lender, as the case may be, to it.3.11 . Reimbursement Obligation of the Borrower . The Borrower agrees to reimburse the Issuing Lender on the Business Day next succeeding the Business Day on which the Issuing Lender notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Lender for the amount of (a) such draft so paid and (b) any taxes, fees, charges or other reasonable costs or expenses incurred by the Issuing Lender in connection with such payment. Each such payment shall be made to the Issuing Lender at its address for notices referred to herein in Dollars and in immediately available funds. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at the rate set forth in (i) until the Business Day next succeeding the date of the relevant notice, Section 4.5(b) and (ii) thereafter, Section 4.5(c). To the extent not so reimbursed as set forth above, each drawing under any Letter of Credit shall (unless an event of the type described in clause (i) or (ii) of Section 9(f) shall have occurred and be continuing with respect to the Borrower, in which case the procedures specified in Section 3.10 for funding by L/C
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Participants shall apply) constitute a request by the Borrower to the Administrative Agent for a borrowing pursuant to Section 3.2 of Base Rate Loans in the amount of such drawing. The Borrowing Date with respect to such borrowing shall be the first date on which a borrowing of Revolving Credit Loans could be made, pursuant to Section 3.2, if the Administrative Agent had received a notice of such borrowing at the time the Administrative Agent receives notice from the relevant Issuing Lender of such drawing under such Letter of Credit.
3.12 . Obligations Absolute . The Borrower’s obligations under Section 3.11 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Issuing Lender that the Issuing Lender shall not be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.11 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. Notwithstanding the foregoing, the Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Issuing Lender. The Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender to the Borrower.
3.13 . Letter of Credit Payments . If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly notify the Borrower of the date and amount thereof. The responsibility of the Issuing Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.
3.14 . Applications . To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4.
GENERAL
PROVISIONS APPLICABLE
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