REVOLVING CREDIT
AGREEMENT
Dated as of October 31, 2005
among
ICON HEALTH & FITNESS, INC.,
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
BANK OF AMERICA, N.A.,
as
Administrative Agent, Issuing Lender and Cash Management Bank,
GMAC COMMERCIAL FINANCE , LLC,
as Documentation Agent,
and
THE
CIT GROUP/BUSINESS CREDIT, INC. and WELLS FARGO FOOTHILL, LLC,
as Co-Syndication Agents
with
BANC
OF AMERICA SECURITIES LLC
as Lead Arranger and Book Runner
1.
DEFINITIONS AND RULES OF INTERPRETATION
1
1.1. Definitions
1
1.2. Rules of
Interpretation
30
2. THE
REVOLVING CREDIT FACILITY
31
2.1. Commitment to Lend
31
2.2. Commitment Fee
32
2.3. Reduction of Total
Commitment
32
2.4. The Revolving Credit
Notes
32
2.5. Interest on Revolving
Credit Loans
33
2.6. Requests for Revolving
Credit Loans
33
2.6.1. General
33
2.6.2. Swing Line
33
2.7. Conversion Options
34
2.7.1. Conversion to Different Type of
Revolving Credit Loan
34
2.7.2. Continuation of Type of Revolving
Credit Loan
34
2.7.3. LIBOR Rate Loans
35
2.8. Funds for Revolving
Credit Loan
35
2.8.1. Funding Procedures
35
2.8.2. Advances by Administrative Agent
35
2.9. Change in Borrowing
Base
36
2.10. Settlements
36
2.10.1. General
36
2.10.2. Failure to Make Funds Available
36
2.10.3. No Effect on Other Lenders
37
2.11. Repayments of Revolving
Credit Loans Prior to Event of Default
37
2.11.1. Credit for Funds Received in
Concentration Account
37
2.11.2. Application of Payments Prior to
Event of Default
38
2.12. Repayments of Revolving
Credit Loans After Event of Default
39
2.13. Fixed Asset Availability
Maximum Amount Amortization
39
2.14. Administrative Agent
Advances
39
3. REPAYMENT
OF THE REVOLVING CREDIT LOANS
40
3.1. Maturity
40
3.2. Mandatory Repayments
of Revolving Credit Loans
40
3.2.1. Excess Amounts
40
3.2.2. Other Events
40
3.3. Optional Repayments of
Revolving Credit Loans
41
4. LETTERS OF
CREDIT
41
4.1. Letter of Credit
Commitments
41
4.1.1. Commitment to Issue Letters of
Credit
42
4.1.2. Letter of Credit Applications
42
4.1.3. Terms of Letters of Credit
42
4.1.4. Reimbursement Obligations of
Lenders
43
4.1.5. Participations of Lenders
43
4.2. Reimbursement
Obligation of the Borrower
43
4.3. Letter of Credit
Payments
44
4.4. Obligations Absolute
44
4.5. Reliance by Issuer
45
4.6. Letter of Credit Fee
45
5. CERTAIN
GENERAL PROVISIONS
45
5.1. Fees
45
5.2. Funds for Payments
46
5.2.1. Payments to Administrative Agent
46
5.2.2. No Offset, etc
46
5.2.3. Non-U.S
46
5.3. Computations
47
5.4. Interest Limitation
47
5.5. Inability to Determine
LIBOR Rate
47
5.6. Illegality
48
5.7. Additional Costs, etc
48
5.8. Capital Adequacy
49
5.9. Certificate
50
5.10. Indemnity
50
5.11. Mitigation of Obligations;
Replacement of Lenders
50
5.12. Interest After Default
52
5.13. Collateral Security and
Guaranty Documents
52
6.
REPRESENTATIONS AND WARRANTIES
52
6.1. Corporate Authority,
Etc
52
6.1.1. Existence, Good Standing
52
6.1.2. Authorization
53
6.1.3. Delivery
53
6.1.4. Enforceability
53
6.2. Financial Statements;
Projections
54
6.3. Solvency
54
6.4. No Material Adverse
Change; Distributions
55
6.5. Absence of Mortgages
and Liens
55
6.6. Franchises, Patents,
Copyrights, etc
55
6.7. Litigation
55
6.8. No Materially Adverse
Contracts, etc
55
6.9. Compliance with Other
Instruments, Laws, etc
55
6.10. Tax Status
55
6.11. No Default or Event of
Default
56
6.12. Holding Company and
Investment Company Acts
56
6.13. Employee Benefit Plans
56
6.13.1. In General
56
6.13.2. Terminability of Welfare Plans
56
6.13.3. Guaranteed Pension Plans
56
6.13.4. Multiemployer Plans
57
6.14. Regulations U and X
57
6.15. True Copies of Governing
Documents
57
6.16. Fiscal Year
57
6.17. Perfection of Security
Interest
57
6.18. Subsidiaries, etc
58
6.19. Environmental Compliance
58
6.20. Bank Accounts
59
6.21. Labor Contracts
59
6.22. Disclosure
59
6.23. Title to Properties
60
6.24. Certain Transactions
60
6.25. Foreign Assets Control
Regulations, Etc
60
6.26. Subordinated Debt Documents
60
7.
AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES
60
7.1. Punctual Payment
61
7.2. Maintenance of Office
61
7.3. Records and Accounts
61
7.4. Financial Statements,
Certificates and Information
61
7.5. Notices
63
7.5.1. Defaults
63
7.5.2. Material Adverse Changes
63
7.5.3. Notice of Litigation and Judgments
63
7.5.4. Notification of Claim against
Collateral
64
7.5.5. Notices Concerning Inventory
Collateral
64
7.5.6. Notification of Additional
Intellectual Property Rights
64
7.5.7. Environmental Events
64
7.6. Legal Existence;
Maintenance of Properties
64
7.7. Insurance
65
7.8. Taxes
65
7.9. Compliance with Laws,
Contracts, Licenses, and Permits
65
7.10. Employee Benefit Plans
66
7.11. Use of Proceeds
66
7.12. Certain Changes
66
7.13. Conduct of Business
66
7.14. Further Assurances
67
7.15. Inspection of Properties and
Books, etc
67
7.15.1. General
67
7.15.2. Collateral Reports
67
7.15.3. Appraisals
67
7.15.4. Communications with Accountants
68
7.15.5. Environmental Assessments
68
7.16. Additional Mortgaged
Property
68
7.17. Bank Accounts
68
7.17.1. General
68
7.17.2. Acknowledgment of Application
69
8. NEGATIVE
COVENANTS OF THE CREDIT PARTIES
69
8.1. Investments
69
8.2. Restrictions on
Indebtedness
70
8.3. Restrictions on Liens
72
8.3.1. Permitted Liens
72
8.3.2. Restrictions on Negative Pledges
and Upstream Limitations
73
8.4. Restricted Payments
74
8.5. Merger, Consolidation
and Disposition of Assets
74
8.5.1. Mergers and Acquisitions
74
8.5.2. Disposition of Assets
74
8.6. Sale and Leaseback
75
8.7. Change of Fiscal Year
75
8.8. Employee Benefit Plans
75
8.9. Compliance With
Environmental Laws
75
8.10. Change in Terms of Governing
Documents
76
8.11. Creation of Subsidiaries
76
8.12. Transactions with Affiliates
76
8.13. Agency Account
77
8.14. Cancellation of Indebtedness
77
8.15. Subordinated Debt; CS First
Boston Debt
77
8.16. Back Bay Loan
77
8.17. No Speculative Transactions
78
8.18. Changes Relating to Certain
Agreements
78
8.19. Credit Parties other than
the Borrower
78
9. FINANCIAL
COVENANT OF THE CREDIT PARTIES
78
10. CLOSING
CONDITIONS
78
10.1. Loan Documents
78
10.2. Certified Copies of
Governing Documents
79
10.3. Corporate or Other Action
79
10.4. Incumbency Certificate
79
10.5. Validity of Liens
79
10.6. Perfection Certificates and
Collateral Search Results
79
10.7. Certificates of Insurance
79
10.8. Agency Account Agreements
80
10.9. Borrowing Base Report and
Collateral Update Certificates
80
10.10. Accounts Receivable Aging Report
80
10.11. Inventory Appraisal
80
10.12. Payment of Closing Fees
80
10.13. Payoff Letter
80
10.14. Opinions of Counsel
80
10.15. Title Insurance
81
10.16. Hazardous Waste Assessments
81
10.17. Solvency Certificate
81
10.18. No Material Adverse Change
81
10.19. Landlord Waivers
81
10.20. Collateral Examinations/Appraisals
81
10.21. Financial Statement and
Projections
81
10.22. Back Bay Intercreditor Agreement;
Back Bay Loan Documents
81
10.23. Subordinated Debt
82
11. CONDITIONS TO
ALL BORROWINGS
82
11.1. Representations True; No
Default or Event of Default
82
11.2. No Legal Impediment
82
11.3. Governmental Regulation
82
11.4. Proceedings and Documents
82
11.5. Payment of Fees
82
11.6. Exchange Limitations
83
11.7. Validity of Liens
83
11.8. Indenture Borrowing
Limitations
83
12. EVENTS OF
DEFAULT; ACCELERATION; ETC
83
12.1. Events of Default and
Acceleration
83
12.2. Termination of Commitments
87
12.3. Remedies
87
12.4. Distribution of Collateral
Proceeds
87
13. SETOFF
88
14. THE AGENT
89
14.1. Authorization
89
14.2. Quebec Appointment
90
14.3. Employees and Administrative
Agents
90
14.4. No Liability
91
14.5. No Representations
91
14.5.1. General
91
14.5.2. Closing Documentation, etc
91
14.6. Payments
91
14.6.1. Payments to Agent
92
14.6.2. Distribution by Administrative
Agent
92
14.6.3. Delinquent Lenders
92
14.7. Holders of Letters of Credit
Participation
92
14.8. Indemnity
93
14.9. Administrative Agent as
Lender
93
14.10. Resignation; Removal
93
14.11. Notification of Defaults and
Events of Default
93
14.12. Duties in the Case of Enforcement
93
14.13. Administrative Agent May File
Proofs of Claim
94
15. EXPENSES
95
16. INDEMNIFICATION
95
17. SURVIVAL OF
COVENANTS, ETC
96
18. ASSIGNMENT AND
PARTICIPATION
97
18.1. General Conditions
97
18.2. Assignments
97
18.3. Register
98
18.4. New Notes
98
18.5. Participations
98
18.6. Payments to Participants
99
18.7. Assignee or Participant
Affiliated with the Credit Parties
99
18.8. Miscellaneous Assignment
Provisions
99
18.9. Special Purpose Funding
Vehicle
100
19. NOTICES, ETC
100
20. GOVERNING LAW
101
21. HEADINGS
101
22. COUNTERPARTS
101
23. ENTIRE
AGREEMENT, ETC
102
24. WAIVER OF JURY
TRIAL
102
25. CONSENTS,
AMENDMENTS, WAIVERS, ETC
102
26. SEVERABILITY
104
27. CONFIDENTIALITY
104
28. USA PATRIOT ACT
106
29. DESIGNATION OF
PERMITTED LIENS
106
EXHIBITS AND SCHEDULES
Exhibit A Form
of Loan Request
Exhibit B Form
of Compliance Certificate
Exhibit C Form
of Assignment and Acceptance
Exhibit D Form
of Borrowing Base Report
Exhibit E Form
of Indenture Borrowing Base Report
Exhibit F Form
of Collateral Update Certificate
Exhibit G Form
of Accounts Receivable/Loan Reconciliation Report
Exhibit H Form
Revolving Credit Note
Schedule 1 Lenders,
Commitment Percentages, Lending Offices
Schedule 1(a) Mortgaged Properties
Schedule 6.4 Distributions
Schedule 6.6 Intellectual
Property
Schedule 6.7 Litigation
Schedule 6.8 Material Adverse
Contracts
Schedule 6.13 Employment Matters
Schedule 6.18 Subsidiaries
Schedule 6.19 Environmental Matters
Schedule 6.20 Bank Accounts
Schedule 6.21 Labor Contracts
Schedule 6.24 Certain Transactions
Schedule 8.1 Certain
Investments
Schedule 8.2(a) Existing Indebtedness
Schedule 8.3 Existing Liens
Schedule 8.4 Certain Affiliate
Payments
Schedule 10.19 Landlord Waivers
REVOLVING CREDIT AGREEMENT
This
REVOLVING CREDIT AGREEMENT (this Credit Agreement) is made as
of
October 31, 2005, by and among ICON HEALTH
& FITNESS, INC., a Delaware
corporation (the Borrower), the other
Credit Parties party hereto, BANK OF
AMERICA, N.A. and the other lenders from
time to time party hereto, and BANK OF
AMERICA N.A., as administrative agent for
itself and the other Lenders (the
Administrative Agent), as Issuing Lender
and as Cash Management Bank.
1. DEFINITIONS AND RULES OF
INTERPRETATION.
1.1. Definitions. The
following terms shall have the meanings set forth
in this 1 or elsewhere in the provisions of
this Credit Agreement referred to
below:
A
Rated Bank See 8.1
Accounts Receivable.
All rights of any Credit Party to payment for goods
sold, leased or otherwise marketed in the
ordinary course of business and all
rights of any Credit Party to payment for
services rendered in the ordinary
course of business and all sums of money or
other proceeds due thereon pursuant
to transactions with account debtors,
recorded on books of account in accordance
with GAAP.
Accounts Receivable/Loan Reconciliation Report. A certificate signed by
the senior financial officer (or another
officer designated by such senior
financial officer) of the Borrower in
substantially the form of Exhibit G
hereto.
Adjustment Date. The
first day of the month immediately following the
month in which a Compliance Certificate is
to be delivered by the Borrower
pursuant to 7.4(c).
Administrative Agent.
Bank of America, N.A., acting as administrative
agent and , with respect to the Security
Documents governed by English law, as
security trustee, for the Lenders, and each
other Person appointed as the
successor of the Administrative Agent in
accordance with 14.10.
Administrative Agent Advance. See 2.14.
Administrative Agents Fee. See 5.1.
Administrative Agents Office. The Administrative Agents office
located
at One Federal Street, Boston,
Massachusetts 02110, or at such other location as
the Administrative Agent may designate from
time to time.
Administrative Agents Special Counsel. Bingham McCutchen LLP, or such
other counsel as may be approved by the
Administrative Agent.
Administrative Questionnaire. An Administrative Questionnaire in
a form
supplied by the Administrative Agent.
Affiliate. With
respect to any Person, another Person that directly, or
indirectly through one or more
intermediaries, Controls or is Controlled by or
is under common Control with the Person
specified.
Agency Account Agreement: See 7.17.
Applicable Commitment Fee Margin. For each period commencing on
an
Adjustment Date through the date
immediately preceding the next Adjustment Date,
the Applicable Commitment Fee Margin
applicable to the Commitment Fee shall be
the rate per annum corresponding to the
Total Outstandings (as determined on
each Adjustment Date based upon the average
Total Outstandings for the
immediately preceding Fiscal Quarter), as
set forth in the table below.
Notwithstanding the foregoing, (a) during the period commencing on
the
Closing Date through the date immediately
preceding the first Adjustment Date to
occur after the Fiscal Quarter ended May
31, 2006, the Applicable Commitment Fee
Margin shall be the Applicable Commitment
Fee Margin set forth in Level I of the
table below and (b) if the Borrower fails
to deliver any Compliance Certificate
pursuant to 7.4(c) hereof, then, for the
period commencing on the next
Adjustment Date to occur subsequent to such
failure through the date immediately
following the date on which such Compliance
Certificate is delivered, the
Applicable Commitment Fee Margin shall be
the highest Applicable Commitment Fee
Margin set forth the table below.
Applicable Commitment
Level
Total Outstandings
Fee Margin
-----
-------------------------------------------- ---------------------
I
Total Outstandings < 33% of Total Commitment
0.35%
II
Total Outstandings < 67% of Total Commitment
and Total Outstandings > 33% of Total Commitment 0.30%
III Total
Outstandings > 67% of Total Commitment
0.25%
Applicable Margin. For
each period commencing on an Adjustment Date
through the date immediately preceding the
next Adjustment Date, the Applicable
Margin applicable to LIBOR Rate Loans and
Base Rate Loans shall be the rate per
annum corresponding to the Excess
Availability (as determined on each Adjustment
Date based upon the average Excess
Availability for the immediately preceding
Fiscal Quarter), as set forth in Table I
below. Notwithstanding
the foregoing,
(a) in the event that Consolidated EBITDA
is $50,000,000 or greater as at the
end of any two consecutive Fiscal Quarters
occurring after the Closing Date
(measured for the four Fiscal Quarter
period ending on each such Fiscal Quarter
end date), the Applicable Margin shall be
determined by reference to Table II
below and (b) in the event that
Consolidated EBITDA is $60,000,000 or greater
for any two consecutive Fiscal Quarters
occurring after the Closing Date
(measured for the four Fiscal Quarter
period ending on each such Fiscal
Quarter end date), the Applicable Margin
shall be determined by reference to
Table III below; provided, however, in the
event that Consolidated EBITDA as at
the end of any subsequent Fiscal Quarter
after clause (a) or (b) is invoked
(measured for the four Fiscal Quarter
period ending on such Fiscal Quarter end
date) (i) is less than $60,000,000 but
greater than or equal to $50,000,000, the
Applicable Margin shall be determined by
reference to Table II below or (ii) is
less than $50,000,000, the Applicable
Margin shall be determined by reference to
Table I below.
Notwithstanding the foregoing, (a) during the period commencing on
the
Closing Date through the date immediately
preceding the first Adjustment Date to
occur after the Fiscal Quarter ended May
31, 2006, the Applicable Margin shall
be the Applicable Margin set forth in Level
II of Table I below and (b) if the
Borrower fails to deliver any Compliance
Certificate pursuant to 7.4(c) hereof,
then, for the period commencing on the next
Adjustment Date to occur subsequent
to such failure through the date
immediately following the date on which such
Compliance Certificate is delivered, the
Applicable Margin shall be the highest
Applicable Margin set forth in Table I
below.
TABLE I
Applicable Margin for
Applicable Margin for
Level Excess
Availability
LIBOR Rate Loans Base
Rate Loans
---- -------------------------------
----------------
----------------------
I
< $25,000,000
3.00%
1.25%
II > $25,000,000 and <
$50,000,000
2.75%
1.00%
III > $50,000,000 and <
$75,000,000
2.50%
0.75%
IV > $75,000,000 and <
$100,000,000 2.25%
0.50%
V > $100,000,000
2.00%
0.25%
TABLE II
Applicable Margin for
Applicable Margin for
Level Excess
Availability
LIBOR Rate Loans Base
Rate Loans
---- -------------------------------
----------------
----------------------
I
< $25,000,000
2.75%
1.00%
II > $25,000,000 and <
$50,000,000
2.50%
0.75%
III > $50,000,000 and <
$75,000,000
2.25%
0.50%
IV > $75,000,000 and <
$100,000,000 2.00%
0.25%
V > $100,000,000
1.75%
0.00%
TABLE III
Applicable Margin for
Applicable Margin for
Level Excess
Availability
LIBOR Rate Loans Base
Rate Loans
---- -------------------------------
----------------
----------------------
I
< $25,000,000
2.50%
0.75%
II > $25,000,000 and <
$50,000,000
2.25%
0.50%
III > $50,000,000 and <
$75,000,000
2.00%
0.25%
IV > $75,000,000 and <
$100,000,000 1.75%
0.00%
V > $100,000,000
1.50%
0.00%
Applicable Pension Legislation. At any time, any pension or
retirement
benefits legislation (be it national,
federal, provincial, territorial or
otherwise) then applicable to any Credit
Party.
Appraised Value. The
fair market value of any Real Estate determined by
the most recent appraisal performed by a
qualified independent appraiser
approved by the Administrative Agent, in
form and substance acceptable to the
Administrative Agent.
Approved Fund. Any
Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that
administers or manages a Lender.
Arranger. Banc of
America Securities LLC.
Assignment and Acceptance. An assignment and acceptance
entered into by
a Lender and an Eligible Assignee (with the
consent of any party whose consent
is required by 18.2), and accepted by the
Administrative Agent, in substantially
the form of ExhibitC or any other form
approved by the Administrative Agent.
Availability Reserve.
$20,000,000.
Back
Bay Agent. Back Bay
Capital Funding LLC.
Back
Bay Intercreditor Agreement. That certain Intercreditor
Agreement,
dated as of the date hereof, among the
Credit Parties, the Back Bay Agent and
the Administrative Agent.
Back
Bay Loan. The Term
Loan Debt as defined in the Back Bay
Intercreditor Agreement.
Back
Bay Loan Agreement.
The Term Loan Agreement, dated as of the date
hereof, by and among the Credit Parties,
certain financial institutions party
thereto and the Back Bay Agent, as agent
for such financial institutions.
Back
Bay Loan Documents.
The Loan Documents as defined in the Back Bay
Loan Agreement.
Bain
Entities.
Collectively, Bain Capital Fund IV, L.P., Bain Capital
Fund IV B, L.P., Bain Associates and BCIP
Trust Associates, L.P., and funds or
trusts managed or controlled by Bain
Capital, Inc.
Balance Sheet Date.
May 31, 2005.
Bank
of America. Bank of
America, N.A. and its successors and assigns.
Base
Rate. For any day a
fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of
1% and (b) the rate of interest in
effect for such day as publicly announced
from time to time by Bank of America
as its prime rate. The prime rate is a rate set by
Bank of America based upon
various factors including Bank of Americas
costs and desired return, general
economic conditions and other factors, and
is used as a reference point for
pricing some loans, which may be priced at,
above, or below such announced rate.
Any change in such rate announced by Bank
of America shall take effect at the
opening of business on the day specified in
the public announcement of such
change.
Base
Rate Loans. Revolving
Credit Loans bearing interest calculated by
reference to the Base Rate.
Bondholders. As
defined in the Deed of Hypothec.
Bondholders Instrument. As defined in the Deed of
Hypothec.
Bonds. Any bonds,
mortgage bonds, debentures or other titles of
Indebtedness issued by ICON du Canada and
secured under the Deed of Hypothec for
the purposes of Article 2692 of the Civil
Code of Quebec and includes, without
limitation, the Initial Bonds.
Borrower. As defined
in the preamble hereto.
Borrowing Base. As at
any date of determination thereof, an amount in
Dollars equal to the result of the
following:
(a)
eighty-five percent (85%) of the net amount of Eligible
Accounts
Receivable outstanding at such date;
plus
(b)
(i) ninety-five percent (95%) of the Net Orderly Liquidation Value
of
Eligible Inventory at such date during the
period of July 1 through November 30
of each calendar year and (ii) eighty-five
percent (85%) of the Net Orderly
Liquidation Value of Eligible Inventory at
such date during all other times;
plus
(c)
in the sole and absolute discretion of Administrative Agent, up
to
50% of the book value of Eligible
In-Transit Inventory valued at the lower of
cost (determined on a first-in, first-out
basis) or market, excluding individual
shipments (per vessel) with an aggregate
book value of less than $250,000; plus
(d)
Fixed Asset Availability; less
(e)
the Availability Reserve; less
(f)
other Reserves.
The Administrative Agent may, from time to
time in the exercise of its
reasonable discretion and upon written
notice to the Borrower, (x) reduce the
lending formula with respect to Eligible
Accounts Receivable to the extent that
the Administrative Agent determines that:
(i) the dilution in respect of the
Accounts Receivable for any period has
increased in any material respect or may
be reasonably anticipated to increase in
any material respect above historical
levels, or (ii) the general
creditworthiness of account debtors or other
obligors of the Borrower or its domestic or
Canadian Subsidiaries has declined
or (y) reduce the lending formula(s) with
respect to Eligible Inventory to the
extent that the Administrative Agent
determines that: (i) the number of days of
the turnover of the inventory of the
Borrower or its domestic or Canadian
Subsidiaries for any period has changed in
any material adverse respect, (ii)
the liquidation value of the Eligible
Inventory, or any category thereof, has
decreased, or (iii) the nature and quality
of the inventory of the Borrower or
its domestic or Canadian Subsidiaries has
deteriorated in any material respect
or the mix of such inventory has changed
materially. In
determining whether to
reduce the lending formula(s), the
Administrative Agent may consider events,
conditions, contingencies or risks which
are also considered in determining
Eligible Accounts Receivable, Eligible
Inventory or in establishing the
Reserves. For purposes of calculating the
Dollar amount of any assets included
in the Borrowing Base which are denominated
in Canadian Dollars, the Dollar
amount of such assets shall be calculated
by reference to the spot rate for
exchange ofCanadian Dollars to Dollars, as
quoted by the most recent edition of
The Wall Street Journal.
Borrowing Base Report.
A report signed by the chief financial officer or
cash manager of the Borrower demonstrating
calculation of the Borrowing Base in
the form of Exhibit D hereto.
Borrower Pledge Agreement. The Pledge Agreement of even date
herewith
executed by the Borrower in favor of the
Administrative Agent, on behalf of
itself and the Lenders, pledging all
Capital Stock of its Subsidiaries.
Business Day. Any day
on which commercial banking institutions in
Boston, Massachusetts, are open for the
transaction of banking business and, in
the case of LIBOR Rate Loans, also a day
which is a LIBOR Business Day.
Canadian Dollars.
Lawful money of Canada.
Capital Expenditures.
With respect to the Credit Parties, all
expenditures (by the expenditure of cash or
the incurrence of Indebtedness) by
the Credit Parties during any measuring
period for any fixed assets or
improvements or for replacements,
substitutions or additions thereto, that have
a useful life of more than one year and
that are required to be capitalized
under 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.
Capitalized Leases.
Leases under which any Credit Party is the lessee or
obligor, the discounted future rental
payment obligations under which are
required to be capitalized on the balance
sheet of the lessee or obligor in
accordance with GAAP.
Cash
Management Bank. Bank
of America and its successors and assigns, in
its capacity as the provider of cash
management services to the Credit Parties.
Cash
Management Obligations. All present and future
liabilities,
obligations and Indebtedness of the Credit
Parties owing to any Lender, the
Administrative Agent, the Cash Management
Bank or any Affiliate of any of the
foregoing under or in connection with any
cash management or related services or
products provided by any Lender, the
Administrative Agent, the Cash Management
Bank or any Affiliate of any of the
foregoing to or for the account of any
Credit Party, including, without
limitation, liabilities, obligations or
Indebtedness in respect of automated
clearing house and other fund transfers,
checks, money orders, drafts, instruments,
funds, payments and other items and
forms of remittances paid, deposited or
otherwise credited to any deposit,
disbursement or other account of any Credit
Party; any credit card or similar
products offered to any Credit Party; any
overdraft or other extension of credit
made to cover any funds transfer, check,
draft, instrument or amount paid for
the account or benefit of any Credit Party,
and all fees, charges, indemnities,
expenses and other amounts from time to
time owing to any Lender, the
Administrative Agent, the Cash Management
Bank or any Affiliate of any of the
foregoing in connection therewith (all
whether accruing before or after the
commencement of any bankruptcy proceeding
by or against any Credit Party and
regardless of whether allowed as a claim in
any such proceeding).
Casualty Event. With
respect to any property (including any interest in
property) of any Credit Party, any loss of,
damage to, or condemnation or other
taking of, such property for which any
Credit Party receives insurance proceeds,
proceeds of a condemnation award or other
compensation.
Change of Control. Any
event, transaction or occurrence as a result of
which (a) the Existing Holders shall cease
to own, directly or indirectly, a
majority of the voting stock of Holdings,
(b) the Existing Holders shall cease
to have or exercise the right, directly or
indirectly, to designate at least a
majority of the members of the Board of
Directors of Holdings, (c) the Existing
Holders and their Affiliates cease to own
(directly or indirectly) and control
all of the economic and voting rights
associated with ownership of at least
fifty-one percent (51%) of all classes of
the outstanding Capital Stock of all
classes of Holdings on a fully diluted
basis, (d) Holdings ceases to own and
control all of the economic and voting
rights associated with all of the
outstanding Capital Stock of the Borrower,
(e) the Borrower ceases to own and
control all of the economic and voting
rights associated with all of the
outstanding Capital Stock of each of its
Subsidiaries or (f) any Change of
Control (as such term is defined in the
Subordinated Notes Documents or the
documents governing any other Indebtedness
of any Credit Party) shall occur.
Closing Date. The
first date on which the conditions set forth in 10 and
11 have been satisfied and any Loans are to
be made or any Letters of Credit are
to be issued hereunder.
Code. The Internal
Revenue Code of 1986.
Collateral.
All of the property,
rights and interests of any Credit
Party that are or are intended to be
subject to the Liens created by the
Security Documents.
Collateral Assignment of Intercompany Notes. The Collateral Assignment
of Intercompany Notes made by each
applicable Credit Party in favor of the
Administrative Agent, on behalf of itself
and the Lenders.
Collateral Update Certificate. A certificate signed by the
chief
financial officer or cash manager of the
Borrower in substantially the form of
Exhibit F hereto.
Commitment. With
respect to each Lender, (a) the amount set forth on
Schedule 1 hereto as the amount of such
Lenders commitment (i) to make Revolving
Credit Loans to the Borrower and (ii) to
participate in the issuance, extension
and renewal of Letters of Credit issued for
the account of the Borrower, as the
same may be reduced from time to time; or
(b) if such commitment is terminated
pursuant to the provisions hereof,
zero.
Commitment Fee. See
2.2.
Commitment Percentage.
With respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lenders
percentage of the aggregate
Commitments of all of the Lenders.
Compliance Certificate. See 7.4(c).
Consolidated or consolidated. With reference to any term defined
herein,
shall mean that term as applied to the
accounts of the Credit Parties,
consolidated in accordance with GAAP.
Consolidated EBITDA.
For any fiscal period, without duplication, an
amount equal to (a) consolidated net income
of the Credit Parties for such
period, minus (b) the sum of (i) income tax
credits, (ii) interest income, (iii)
gain from extraordinary items for such
period, (iv) any aggregate net gain (but
not any aggregate net loss) during such
period arising from the sale, exchange
or other disposition of capital assets by
any Credit Party (including any fixed
assets, whether tangible or intangible, and
all inventory sold in conjunction
with the disposition of fixed assets and
all securities), and (v) any other
non-cash gains that have been added in
determining consolidated net income, in
each case to the extent included in the
calculation of consolidated net income
of the Credit Parties for such period in
accordance with GAAP, but without
duplication, plus (c) the sum of (i) any
provision for income taxes, (ii)
Consolidated Interest Expense, (iii)
non-cash loss from extraordinary items for
such period, (iv) the amount of non-cash
charges (including depreciation and
amortization) for such period, (v)
amortized debt discount for such period, and
(vi) the amount of any deduction to
consolidated net income as the result of any
grant to any members of the management of
any Credit Party of any Capital Stock,
in each case to the extent included in the
calculation of consolidated net
income of the Credit Parties for such
period in accordance with GAAP, but
without duplication. For purposes of this
definition, the following items shall
be excluded in determining consolidated net
income of the Credit Parties: (1)
the income (or deficit) of any other Person
(other than a Subsidiary) in which
any Credit Party has an ownership interest,
except to the extent any such income
has actually been received by a Credit
Party in the form of cash dividends or
distributions; (2) the undistributed
earnings of any Subsidiary of any Credit
Party 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 or requirement
of law applicable to such Subsidiary;
(3) any restoration to income of any
extraordinary or contingency reserve,
except to the extent that such reserve
reduced Consolidated EBITDA in such four
quarter period; (4) any write-up of any
asset; (5) any net gain from the
collection of the proceeds of life
insurance policies; (6) any net gain (but not
any aggregate loss) arising from the
acquisition of any securities, or the
extinguishment, under GAAP, of any
Indebtedness, of the Credit Parties; (7) in
the case of a successor to any Credit Party
by consolidation or merger or as a
transferee of its assets, any earnings of
such successor prior to such
consolidation, merger or transfer of
assets; and (8) any deferred credit
representing the excess of equity in any
Subsidiary of any Credit Party at the
date of acquisition of such Subsidiary over
the cost to such Credit Party of the
investment in such Subsidiary.
Consolidated Interest Expense. For any fiscal period, interest
expense
(whether cash or non-cash) of the Credit
Parties determined in accordance with
GAAP for the relevant period ended on such
date, including interest expense with
respect to Indebtedness of any Credit Party
and interest expense for the
relevant period that has been capitalized
on the balance sheet of the Credit
Parties.
Control. The
possession, directly or indirectly, of the power to direct
or cause the direction of the management or
policies of a Person, whether
through the ability to exercise voting
power, by contract or otherwise.
Controlling and Controlled have meanings
correlative thereto.
Control Letter. A
letter agreement between the Administrative Agent and
(i) the issuer of uncertificated securities
with respect to uncertificated
securities in the name of any Credit Party,
(ii) a securities intermediary with
respect to securities, whether certificated
or uncertificated, securities
entitlements and other financial assets
held in a securities account in the name
of any Credit Party, (iii) a futures
commission merchant, as applicable, or
clearing house with respect to commodity
accounts and commodity contracts held
by any Credit Party, whereby, among other
things, the issuer, securities
intermediary or futures commission merchant
disclaims any security interest in
the applicable financial assets,
acknowledges the Lien of the Administrative
Agent, on behalf of itself and Lenders, on
such financial assets, and agrees to
follow the instructions or entitlement
orders of the Administrative Agent
without further consent by the affected
Credit Party.
Conversion Request. A
notice given by the Borrower to the Administrative
Agent of the Borrowers election to convert
or continue a Loan in accordance with
2.7.
Copyright Mortgage.
The Memorandum of Grant of Security Interest in
Copyrights, made by each applicable Credit
Party in favor of the Administrative
Agent, on behalf of itself and the
Lenders.
Credit Agreement. This
Revolving Credit
Agreement, including the
Schedules and Exhibits hereto.
Credit Parties.
Holdings, the Borrower and each of their respective
Subsidiaries.
CS
First Boston. Credit
Suisse First Boston Corporation, a Delaware
corporation.
CS
First Boston Debt.
Indebtedness of Holdings issued to CS First Boston
in the amount of $7,500,000 pursuant to (i)
the Amended and Restated Note
Agreement, Dated as of September 27, 1999,
and (ii) the 0% Convertible
Subordinated Note Due September 27, 2011,
dated September 27, 1999, in the form
thereof delivered to the Administrative
Agent on or prior to the Closing Date.
Deed
of Hypothec. That
certain Deed of Hypothec and Issue of Mortgage
Bonds dated the date hereof between ICON du
Canada and the Administrative Agent,
acting as fond de pouvoir pursuant to
Article 2629 of the Civil Code of Quebec,
to secure payment of the applicable
Bond.
Default. See 12.1.
Default Rate. (a) When
used with respect to Obligations other than
Letter of Credit Fees, an interest rate
equal to (i) the Base Rate plus (ii) the
Applicable Margin applicable to the Base
Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a
LIBOR Rate Loan, the Default Rate
shall be an interest rate equal to the
LIBOR Rate plus the Applicable Margin
applicable to such Loan plus 2% per annum
and (b) when used with respect to
Letter of Credit Fees, a rate equal to the
Applicable Margin applicable to
Revolving Loans bearing interest at the
LIBOR Rate plus 2% per annum, in all
cases to the fullest extent permitted by
applicable law.
Delinquent Lender. See
14.6.3.
Derivative Agreement.
Any and all transactions, agreements or documents
now existing or hereafter entered into,
which provide for an interest rate,
credit, commodity or equity swap, cap,
floor, collar, forward foreign exchange
transaction, currency swap, cross currency
rate swap, currency option, or any
combination of, or option with respect to,
these or similar transactions, for
the purpose of hedging any Credit Partys
exposure to fluctuations in interest or
exchange rates, loan, credit exchange,
security or currency valuations or
commodity prices and not for speculative
purposes.
Determined Value At
the relevant time of reference thereto, the
appraised Net Orderly Liquidation Value of
Eligible Machinery and Equipment
determined by the most recent appraisal
thereof performed by a qualified
independent appraiser approved by the
Administrative Agent, in form and
substance acceptable to the Administrative
Agent. To the extent
that any
Eligible Machinery and Equipment is
encumbered by a Lien or encumbrance which is
a Permitted Lien not securing the
Obligations, the amount of the Indebtedness
secured by such Lien or encumbrance shall
be deducted from the value determined
in accordance with the immediately
preceding sentence of this definition of
Determined Value.
Dollars or $. Dollars
in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each
Lender designated
as such in Schedule 1 hereto; thereafter,
such other office of such Lender, if
any, located within the United States that
will be making or maintaining Base
Rate Loans.
Drawdown Date. The
date on which any Revolving Credit Loan is made or is
to be made, and the date on which any
Revolving Credit Loan is converted or
continued in accordance with 2.7.
Eligible Accounts Receivable. The aggregate of the unpaid
portions of
Accounts Receivable (net of any contra
accounts, credits, rebates, offsets,
holdbacks or other adjustments or
commissions payable to third parties that are
adjustments to such Accounts Receivable) of
the Borrower and its domestic and
Canadian Subsidiaries which the
Administrative Agent, in its sole credit
judgment (not to be exercised
unreasonably), deems to be an Eligible Account
Receivable. Without limiting the generality of
the foregoing, no Account
Receivable shall be an Eligible Account
Receivable if:
(i)
it arises out of a sale made by the Borrower or such Subsidiary to
a
Subsidiary or an Affiliate of the Borrower
or such Subsidiary or to a Person
Controlled by an Affiliate of the Borrower
or such Subsidiary (other than a
portfolio company of any of the Bain
Entities, CS First Boston or any of their
respective Affiliates); or
(ii) it is unpaid for
more than sixty (60) days after the original due
date shown on the invoice; or
(iii) it is due and unpaid more than one hundred twenty (120) days
after
the original invoice date; provided that
the Administrative Agent may extend
such one hundred twenty (120) day
limitation to one hundred fifty (150) days as
to Accounts Receivable owing by certain
creditworthy account debtors as
determined by the Administrative Agent in
its reasonable credit judgment; or
(iv)
50% or more of the Accounts Receivable from the account debtor
are
not deemed Eligible Accounts Receivable;
or
(v)
any material covenant, representation or warranty contained in
the
agreement with respect to such Account
Receivable has been breached by the
Borrower or such Subsidiary; or
(vi)
the account debtor is also the Borrowers or such Subsidiarys
creditor or supplier, or the account debtor
has disputed liability with respect
to such Account Receivable, or the account
debtor has made any claim with
respect to any other Account Receivable due
from such account debtor to the
Borrower or such Subsidiary, or the Account
Receivable otherwise is or may
become subject to any right of setoff by
the account debtor; in each case, the
Account Receivable to be ineligible to the
extent of such contra, dispute,
claim, or setoff; or
(vii) the account debtor has commenced a voluntary case under the
federal
bankruptcy laws, as now constituted or
hereafter amended, or other insolvency,
reorganization or adjustment laws of any
other jurisdiction, or made an
assignment for the benefit of creditors, or
a decree or order for relief has
been entered by a court having jurisdiction
in the premises in respect of the
account debtor in an involuntary case under
the federal bankruptcy laws, as now
constituted or hereafter amended, or other
insolvency, reorganization or
adjustment laws of any other jurisdiction,
or any other petition or other
application for relief under the federal
bankruptcy laws or other insolvency,
reorganization or adjustment laws of any
other jurisdiction has been filed
against the account debtor, or if the
account debtor has failed, suspended
business, ceased to be solvent, or
consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for
it or for all or a significant
portion of its assets or affairs; or
(viii) (A) it arises from a sale to an account debtor outside the
United
States or Canada (excluding the province of
Newfoundland, the Northwest
Territories and the territory of Nunavut);
provided that, in the Administrative
Agents sole discretion, Accounts Receivable
owing from Regency in Australia and
New Zealand, RFE International in the
United Kingdom and Sears Mexico in Mexico,
may be included as Eligible Accounts
Receivable so long as they are payable in
Dollars, do not exceed an amount of
$3,000,000 in the aggregate and notice and
other perfection requirements are met or
(B) is denominated in a currency other
than Dollars or Canadian Dollars, unless,
in each case, the sale is covered by
credit insurance or on letter of credit
guaranty or acceptance terms, in each
case acceptable to the Administrative Agent
in its sole discretion; or
(ix)
it arises from a sale to the account debtor on a billandhold,
guaranteed sale, saleorreturn,
saleonapproval, consignment or any other
repurchase or return basis; or
(x)
the account debtor is the United States of America, any state
located
therein or the Canadian government (Her
Majesty in Right of Canada), any
province or territory located therein or,
in each case, any department, agency
or instrumentality thereof, unless the
Borrower or such Subsidiary assigns its
right to payment of such Account Receivable
to the Administrative Agent, in a
manner satisfactory to the Administrative
Agent, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C.
203 et seq., as amended), any
equivalent state law or the Financial
Administration Act (Canada) or any
applicable provincial or territorial
statute or municipal ordinance of
similar
purpose and effect, with respect to such
obligation, as applicable; or
(xi)
it is not at all times subject to the Administrative Agents
duly
perfected, firstpriority security interest
and no other Lien except a Permitted
Lien which is subordinate to the
Administrative Agents Lien; or
(xii) the goods giving rise to such Account Receivable have not
been
delivered to and accepted by the account
debtor or the services giving rise to
such Account Receivable have not been
performed by the Borrower or such
Subsidiary and accepted by the account
debtor or the Account Receivable
otherwise does not represent a final sale
(other than SAB-104 adjustments); or
(xiii) the Account Receivable is evidenced by chattel paper or
an
instrument of any kind, or has been reduced
to judgment; or
(xiv) the Borrower or such Subsidiary has made any agreement with
the
account debtor for any deduction therefrom,
except for discounts or allowances
which are made in the ordinary course of
business for prompt payment and which
discounts or allowances are reflected in
the calculation of the face value of
each invoice related to such Account
Receivable; or
(xv)
the Account Receivable is owing to Universal; or
(xvi) such Account Receivable is owing by a consumer and (A) two or
more
installments with respect thereto remain
unpaid for more than thirty (30) days
or (B) to the extent that the aggregate of
those consumer Accounts Receivable
exceed $10,000,000.
Eligible Assignee. Any
of (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund and (d) any other
Person (other than a natural person)
approved by (i) the Administrative Agent
and (ii) unless a Default or an Event
of Default has occurred and is continuing,
the Borrower (each such approval not
to be unreasonably withheld or
delayed).
Eligible Inventory.
With respect to the Borrower and its domestic and
Canadian Subsidiaries, inventory owned by
the Borrower or such Subsidiary which
the Administrative Agent, in its sole
credit judgment (not to be exercised
unreasonably), deems to be Eligible
Inventory. Without
limiting the generality
of the foregoing, no inventory shall be
Eligible Inventory if:
(i)
it is not inventory that, in the Administrative Agents opinion,
is
readily marketable in its current form;
or
(ii)
it is not in good and saleable condition; or
(iii) it is slowmoving, obsolete, defective or unmerchantable;
or
(iv)
it does not meet all standards imposed by any governmental agency
or
authority, including, without limitation,
the Fair Labor Standards Act; or
(v)
it does not conform in all respects to the warranties and
representations set forth in this Credit
Agreement; or
(vi)
it is not at all times subject to the Administrative Agents
duly
perfected, firstpriority security interest
and no other Lien (including the
rights of a purchaser that has made
progress payments and the rights of a surety
that has issued a bond to assure Borrowers
or one of its domestic or Canadian
Subsidiarys. performance with respect to
that inventory and the rights of unpaid
suppliers (other than another Credit Party)
under Section 81.1 of the Bankruptcy
and Insolvency Act (Canada)) except a
Permitted Lien which is subordinate to the
Administrative Agents Lien; or
(vii) it is in transit (except, in Administrative Agents
discretion,
Eligible In-Transit Inventory); or
(viii) it is not located in the United States of America or Canada;
or
(ix)
it is held on consignment, or not otherwise owned by the Borrower
or
such Subsidiary; or
(x)
it has been shipped to a customer, regardless of whether such
shipment is on a consignment basis; or
(xi)
it consists of supplies, packing materials, shipping materials
or
work-in-process; or
(xii) it is not in the possession of the Borrower or such
Subsidiary,
unless the Administrative Agent has
received a waiver from the party in
possession of such inventory in form and
substance satisfactory to the
Administrative Agent; or
(xiii) it bears a third partys trademark licensed by a Credit Party
or
other proprietary right, unless the
Administrative Agent determines that such
inventory could be sold pursuant to the
exercise of remedies by the
Administrative Agent hereunder or under
applicable law on terms satisfactory to
the Administrative Agent in its sole
discretion.
Eligible In-Transit Inventory. All finished goods inventory owned
by the
Borrower, and which finished goods
inventory is in transit to Borrowers
facilities in North America with a freight
carrier or shipping company which is
not an Affiliate of either the Borrower or
the supplier and which finished goods
inventory (a) has been the subject of a
transfer of title to Borrower, (b) is
fully insured, (c) is subject to a first
priority security interest in and Lien
upon such goods in favor of the
Administrative Agent (except for any possessory
Lien upon such goods in the possession of a
freight carrier or shipping company
securing only the freight charges for the
transportation of such goods to
Borrower), (d) with respect to which the
Administrative Agent has been
designated as co-consignee on any bill of
lading or document of title and (e) is
otherwise deemed to be Eligible Inventory
hereunder.
Eligible Machinery and Equipment. Machinery and equipment (i) owned
by
the Borrower and its domestic and Canadian
Subsidiaries, (ii) located in the
United States of America or Canada, (iii)
in which the Administrative Agent
shall have duly perfected, firstpriority
security interest (and which shall not
be subject to any other Lien other than
Permitted Liens which are subordinate to
the Administrative Agents Lien) and (iv)
which are properly insured in
accordance with the provisions of this
Credit Agreement.
Eligible Real Estate.
With respect to the Borrower and its domestic and
Canadian Subsidiaries, Real Estate owned by
the Borrower or such Subsidiary
which the Administrative Agent, in its sole
credit judgment (not to be exercised
unreasonably), deems to be Eligible Real
Estate. Without
limiting the
generality of the foregoing, no Real Estate
shall be Eligible Real Estate if:
(i)
it is not located in the United States or Canada; or
(ii) it is
not at all times subject to the Administrative Agents duly
perfected, firstpriority security interest
and no other Lien except a Permitted
Lien which is subordinate to the
Administrative Agents Lien; or
(iii) it has not
been appraised by a third party appraiser reasonably
acceptable to the Administrative Agent;
or
(iv) the
Administrative Agent has not received an environmental site
assessment of such Real Estate reasonably
acceptable to the Administrative
Agent.
Employee Benefit Plan.
(i) Any employee benefit plan within the meaning
of 3(3) of ERISA maintained or contributed
to by any Credit Party or any ERISA
Affiliate, other than a Guaranteed Pension
Plan or a Multiemployer Plan and (ii)
with respect to any Canadian Subsidiary,
any employee benefit program relating
to employees of such Canadian Subsidiary
other than pension plans, but
including, without limitation, profit
sharing, deferred compensation, incentive
severance, change of control, phantom
stock, stock option, stock purchase, bonus
and health or insurance plans and
arrangements (in each case, oral or written).
Employment Agreements.
The Employment Agreement dated as of February 27,
2004 among Holdings, the Borrower and Scott
Watterson and the Employment
Agreement dated as of February 27, 2004
among Holdings, the Borrower and Gary
Stevenson, as amended from time to time in
accordance with the provisions of
this Credit Agreement.
ERISA. The Employee
Retirement Income Security Act of 1974.
ERISA Affiliate. Any
Person which is treated as a single employer with
any Credit Party under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to
a Guaranteed
Pension Plan within the meaning of 4043 of
ERISA and the regulations promulgated
thereunder as to which the requirement of
notice has not been waived.
Eurocurrency Reserve Rate. For any day, the maximum rate
(expressed as a
decimal) at which any bank subject thereto
would be required to maintain
reserves under Regulation D of the Board of
Governors of the Federal Reserve
System (or any successor or similar
regulations relating to such reserve
requirements) against Eurocurrency
Liabilities (as that term is used in
Regulation D), if such liabilities were
outstanding. The
Eurocurrency Reserve
Rate shall be adjusted automatically on and
as of the effective date of any
change in the Eurocurrency Reserve
Rate.
European Subsidiaries.
ICON Health & Fitness Italia SpA, ICON Health &
Fitness (Holdings) Limited, ICON Health
& Fitness Limited, ICON Health & Fitness
France SAS and AICON Health & Fitness
GmBH.
Excess Availability.
As of any date of determination thereof, the
difference between (a) the lesser of (i)
the Total Commitment at such time and
(ii) the Borrowing Base at such time, and
(b) the Revolving Exposure at such
time.
Existing Credit Agreement. The Credit Agreement, as amended,
dated as of
April 9, 2002, among the Borrower, the
other credit parties signatory thereto,
the lenders signatory thereto, General
Electric Capital Corporation, as
administrative agent, and the other parties
thereto.
Existing Holders.
Collectively, the Bain Entities, CS First Boston,
Scott Watterson, Gary Stevenson, Robert
Gay, Lee Ming Tsung, Wan-Chung Ko,
Stanley C. Tuttleman and Inverness/Phoenix
Capital, LLC.
Event of Default. See
12.1.
Fee
Letter. The fee
letter, dated as the date hereof, among the
Borrower, the Administrative Agent and the
Arranger.
Fees. Collectively,
the Commitment Fee, the Letter of Credit Fees and
the Administrative Agents Fee.
Federal Funds Rate.
For any day, the rate per annum equal to the
weighted average of the rates on overnight
Federal funds transactions with
members of the Federal Reserve System
arranged by Federal funds brokers on such
day, as published by the Federal Reserve
Bank of New York on the Business Day
next succeeding such day; provided that (a)
if such day is not a Business Day,
the Federal Funds Rate for such day shall
be such rate on such transactions on
the next preceding Business Day as so
published on the next succeeding Business
Day, and (b) if no such rate is so
published on such next succeeding Business
Day, the Federal Funds Rate for such day
shall be the average rate (rounded
upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to Bank of
America on such day on such transactions as
determined by the Administrative
Agent.
Fiscal Month. Any of
the monthly accounting periods of the Borrower.
Fiscal Quarter. Any of
the quarterly accounting periods of the Borrower,
ending on or about August 31, November 30,
February 28 and May 31 of each year;
provided, however that the first three
Fiscal Quarters of each Fiscal Year end
on the Saturday nearest the dates set forth
in this definition.
Fiscal Year. Any of
the annual accounting periods of the Borrower ending
on May 31 of each year.
Fixed Asset Availability. As at any date of determination
thereof, an
amount in Dollars equal to the lesser
of:
(i)
the Fixed Asset Maximum Availability Amount; and
(ii) the
sum of (A) 80% of the Determined Value of Eligible Machinery
and Equipment and (B) 75% of the Appraised
Value of Eligible Real Estate.
Fixed Asset Availability Maximum Amount. $13,000,000, which shall be
automatically and permanently reduced
pursuant to 2.13.
Fixed Charge Coverage Ratio. As at any date of determination,
the ratio
of (a) (i) Consolidated EBITDA for the
Reference Period ending on such date of
determination minus (ii) the aggregate
amount of all Non-Financed Capital
Expenditures made during such period minus
(iii) the aggregate amount paid, or
required to be paid (without duplication),
in cash in respect of the current
portion of all income taxes for such period
to (b) the sum of (i) the aggregate
amount of Consolidated Interest Expense for
such period, (ii) the aggregate
amount of regularly scheduled payments of
principal in respect of Indebtedness
for borrowed money (including the principal
component of any payments in respect
of Capitalized Leases and Synthetic Leases)
paid or required to be paid during
such period and (iii) the aggregate amount
of dividends and distributions
permitted to be paid by Holdings hereunder
and actually paid in cash during such
period.
Free
Motion. Free Motion
Fitness, Inc., a Utah corporation.
Fund. Any Person
(other than a natural person) that is (or will be)
engaged in making, purchasing, holding or
otherwise investing in commercial
loans and similar extensions of credit in
the ordinary course of its business.
GAAP. (i) When used in
9, whether directly or indirectly through
reference to a capitalized term used
therein, means (A) principles that are
consistent with the principles promulgated
or adopted by the Financial
Accounting Standards Board and its
predecessors, in effect for the Fiscal Year
ended on the Balance Sheet Date, and (B) to
the extent consistent with such
principles, the accounting practice of the
Credit Parties reflected in the
Credit Parties financial statements for the
year ended on the Balance Sheet
Date, and (ii) when used in general, other
than as provided above, means
principles that are (A) consistent with the
principles promulgated or adopted by
the Financial Accounting Standards Board
and its predecessors, as in effect from
time to time, and (B) consistently applied
with past financial statements of the
Credit Parties adopting the same
principles, provided that in each case referred
to in this definition of GAAP a certified
public accountant would, insofar as
the use of such accounting principles is
pertinent, be in a position to deliver
an unqualified opinion (other than
qualifications regarding changes in GAAP and
as to normal year-end adjustments) as to
financial statements in which such
principles have been properly applied.
Governing Documents.
With respect to any Person, its certificate or
articles of incorporation, certificate of
incorporation or change of name (if
any), certificate of formation, or, as the
case may be, certificate of limited
partnership, its by-laws, memorandum and
articles of association, operating
agreement or, as the case may be,
partnership agreement or other constitutive
documents and all shareholder agreements,
voting trusts and similar arrangements
applicable to any of its Capital Stock.
Governmental Authority. Any national, foreign, federal,
state,
provincial, regional, local municipal or
other government, or any department,
commission, board, bureau, agency, public
authority or instrumentality thereof,
or any court or arbitrator.
Gross Availability. At
any time, the lesser of (a) the Borrowing Base at
such time and (b) the Total Commitment at
such time.
Guaranteed Pension Plan. Any employee pension benefit plan
within the
meaning of 3(2) of ERISA maintained or
contributed to by any Credit Party or any
ERISA Affiliate the benefits of which are
guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of
ERISA, other than a Multiemployer
Plan, and with respect to any Canadian
Subsidiary, all pension and retirement
plans relating to the current and former
employees of such Subsidiary, whether
registered or unregistered, funded or
unfunded and written or oral, and with
respect to such Subsidiary, all pension and
retirement plans relating to the
current and former employees of such
Subsidiary, whether registered or
unregistered, funded or unfunded and
written or oral.
Guaranties.
Collectively, the Holdings Guaranty, the Subsidiary
Guaranty, the ICON du Canada Guaranty, the
ICON Fitness Holdings Guaranty and
any other guaranty executed by any
Guarantor in favor of the Administrative
Agent and the Lenders in respect of the
Obligations.
Guarantors. Holdings,
ICON Fitness Holdings, ICON du Canada, ICON New
Brunswick, International Holdings,
Universal, Free Motion, ICON IP, NordicTrack
and each other Person, if any, that
executes a guaranty or other similar
agreement in favor of the Administrative
Agent in connection with the
transactions contemplated by this Credit
Agreement and the other Loan Documents.
Holdings. HF Holdings,
Inc. a Delaware corporation.
Holdings Guaranty. The
guaranty of even date herewith executed by
Holdings in favor of the Administrative
Agent and the Lenders.
Holdings Pledge Agreement. The Pledge Agreement of even date
herewith
executed by Holdings in favor of the
Administrative Agent, on behalf of itself
and Lenders, pledging all of the Capital
Stock of the Borrower.
ICON
du Canada. ICON of
Canada Inc./ICON du Canada Inc., a Quebec
company.
ICON
du Canada Guaranty.
The guaranty of even date herewith executed by
ICON du Canada in favor of the
Administrative Agent and the Lenders, guarantying
the obligations of ICON New Brunswick under
the Subsidiary Guaranty.
ICON
du Canada Pledge Agreement. The Hypothec and Pledge of
Bonds
between ICON du Canada and the
Administrative Agent pursuant to which ICON du
Canada pledges the Bonds to the
Administrative Agent and the Lenders.
ICON
IP. ICON IP, Inc., a
Delaware corporation.
ICON
Fitness Holdings. ICON
Health & Fitness (Holdings) Limited, a
company incorporated under the laws of the
England and Wales.
ICON
Fitness Holdings Guaranty. The guaranty dated on or about the
date
hereof executed by ICON Fitness Holdings in
favor of the Administrative Agent
and the Lenders.
ICON
Fitness Holdings Pledge Agreements. The charge over shares granted
or to be granted by ICON Fitness Holdings
in favor of the Administrative Agent,
on behalf of itself and the Lenders,
charging 65% of the Capital Stock of each
European Subsidiary.
ICON
New Brunswick. 510152
N.B. Ltd., a New Brunswick corporation.
Indebtedness. As to any Person and whether recourse is secured by
or is
otherwise available against all or only a
portion of the assets of such Person
and whether or not contingent, but without
duplication:
(a)
every obligation of such Person for money borrowed,
(b) every obligation of such
Person evidenced by bonds, debentures,
notes or other similar instruments,
including obligations incurred in connection
with the acquisition of property, assets or
businesses,
(c)
every reimbursement obligation of such Person with respect to
letters of credit, bankers acceptances, or
similar facilities issued for the
account of such Person,
(d)
every obligation of such Person issued or assumed as the
deferred purchase price of property or
services (including securities repurchase
agreements but excluding trade accounts
payable or accrued liabilities arising
in the ordinary course of business which
are not overdue or which are being
contested in good faith),
(e)
every obligation of such Person under any Capitalized Lease,
(f)
every obligation of such Person under any Synthetic Lease,
(g)
all sales by such Person of (i) accounts or general intangibles
for
money due or to become due, (ii) chattel
paper, instruments or documents
creating or evidencing a right to payment
of money or (iii) other receivables
(collectively receivables), whether
pursuant to a purchase facility or
otherwise, other than in connection with
the disposition of the business
operations of such Person relating thereto
or a disposition of defaulted
receivables for collection and not as a
financing arrangement, and together with
any obligation of such Person to pay any
discount, interest, fees, indemnities,
penalties, recourse, expenses or other
amounts in connection therewith,
(h)
every obligation of such Person (an equity related purchase
obligation) to purchase, redeem, retire or
otherwise acquire for value any
shares of Capital Stock issued by such
Person or any rights measured by the
value of such Capital Stock,
(i)
every obligation of such Person under any Derivative Agreement,
(j)
every obligation in respect of Indebtedness of any other entity
(including any partnership in which such
Person is a general partner) to the
extent that such Person is liable therefor
as a result of such Persons ownership
interest in or other relationship with such
entity, except to the extent that
the terms of such Indebtedness provide that
such Person is not liable therefor
and such terms are enforceable under
applicable law, and
(k)
every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect
of guarantying or otherwise acting
as surety for, any obligation of a type
described in any of clauses (a) through
(j) (the primary obligation) of another
Person (the primary obligor), in any
manner, whether directly or indirectly, and
including, without limitation, any
obligation of such Person (i) to purchase
or pay (or advance or supply funds for
the purchase of) any security for the
payment of such primary obligation, (ii)
to purchase property, securities or
services for the purpose of assuring the
payment of such primary obligation, or
(iii) to maintain working capital, equity
capital or other financial statement
condition or liquidity of the primary
obligor so as to enable the primary obligor
to pay such primary obligation.
The
amount or principal amount of any Indebtedness at any time of
determination represented by (1) any
Indebtedness, issued at a price that is
less than the principal amount at maturity
thereof, shall be the amount of the
liability in respect thereof determined in
accordance with GAAP, (2) any
Capitalized Lease shall be the present
value of the aggregate of the rentals
obligation under such Capitalized Lease
payable over the term thereof that is
not subject to termination by the lessee,
(3) any sale of receivables shall be
the amount of unrecovered capital or
principal investment of the purchaser
(other than Holdings or any of its
wholly-owned Subsidiaries) thereof, excluding
amounts representative of yield or interest
earned on such investment, (4) any
Synthetic Lease shall be the stipulated
loss value, termination value or other
equivalent amounts, (5) any Derivative
Agreement shall be the maximum amount of
any termination or loss payment required to
be paid by such Person if such
Derivative Agreement were, at the time of
determination, to be terminated by
reason of any event of default or early
termination event thereunder, whether or
not such event of default or early
termination event has in fact occurred, (6)
any equity related purchase obligation
shall be the maximum fixed redemption or
purchase price thereof inclusive of any
accrued and unpaid dividends to be
comprised in such redemption or purchase
price and (7) any guaranty or other
contingent liability referred to in clause
(k) shall be an amount equal to the
stated or determinable amount of the
primary obligation in respect of which such
guaranty or other contingent obligation is
made or, if not stated or
determinable, the maximum reasonably
anticipated liability in respect thereof
(assuming such Person is required to
perform thereunder) as determined by such
Person in good faith.
Indenture Borrowing Base Report. A report signed by the chief
financial
officer or cash manager of the Borrower
demonstrating calculation of the
Borrowing Base (as defined in the
Subordinated Indenture) as of the last day of
the most recently ended Fiscal Quarter and
the amount of Indebtedness incurred
pursuant to Sections 4.09(b)(1) and
4.09(b)(13) of the Subordinated Indenture as
of the last day of such Fiscal Quarter in
the form of Exhibit E-1 hereto.
Initial Bonds. The
demand mortgage bonds in the amount of
Cdn.$600,000,000, each dated the date
hereof issued by ICON du Canada in favor
of the Administrative Agent under the
provisions of the Deed of Hypothec and
pledged pursuant to the Deed of Hypothec
and the ICON du Canada
Pledge
Agreement.
Interest Payment Date.
(i) As to any Base Rate Loan, the first day of
each calendar month and the Maturity Date
and (ii) as to any LIBOR Rate Loan,
the last day of each Interest Period
applicable thereto; provided, however, that
if any Interest Period for a LIBOR Rate
Loan exceeds three (3) months, the
respective dates that fall every three
months after the beginning of such
Interest Period shall also be Interest
Payment Dates.
Interest Period. With
respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such
Loan and ending on the last day of one
of the periods set forth below, as selected
by the Borrower in a Loan Request or
as otherwise required by the terms of this
Credit Agreement (A) for any Base
Rate Loan, the last day of each calendar
month and (B) for any LIBOR Rate Loan,
1, 2, 3, or 6 months; and (ii) thereafter,
each period commencing on the last
day of the next preceding Interest Period
applicable to such Loan and ending on
the last day of one of the periods set
forth above, as selected by the Borrower
in a Conversion Request; provided that all
of the foregoing provisions relating
to Interest Periods are subject to the
following:
(a)
if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a
Business Day, that 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;
(b)
if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day,
that Interest Period shall end on the
next succeeding Business Day;
(c)
if the Borrower fails to give notice as provided in 2.7, the
Borrower shall be deemed to have requested
a conversion of the affected LIBOR
Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base
Rate Loans on the last day of the then
current Interest Period with respect
thereto;
(d)
any Interest Period relating to any LIBOR Rate Loan 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
(e)
any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Maturity Date
shall end on the Maturity Date.
International Holdings. ICON International Holdings, Inc.,
a Delaware
corporation.
International Pledge Agreements. (a) A pledge agreement dated as of
the
Closing Date, pledging to the
Administrative Agent for the benefit of the
Lenders 65% of the Capital Stock of ICON du
Canada and 100% of the Capital Stock
of ICON New Brunswick and (b) a charge over
shares charging in favor of the
Administrative Agent for the benefit of the
Lenders 100% of the Capital Stock of
ICON Fitness Holdings.
Investments. All
expenditures made and all liabilities incurred
(contingently or otherwise) for the
acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions
or transfers of property to, or in
respect of any guaranties (or other
commitments as described under
Indebtedness), or obligations of, any
Person. In determining
the aggregate
amount of Investments outstanding at any
particular time: (i) the amount of any
Investment represented by a guaranty shall
be taken at not less than the
principal amount of the obligations
guaranteed and still outstanding; (ii) there
shall be included as an Investment all
interest accrued with respect to
Indebtedness constituting an Investment
unless and until such interest is paid;
(iii) there shall be deducted in respect of
each such Investment any amount
received as a return of capital (but only
by repurchase, redemption, retirement,
repayment, liquidating dividend or
liquidating distribution); (iv) there shall
not be deducted in respect of any
Investment any amounts received as earnings on
such Investment, whether as dividends,
interest or otherwise, except that
accrued interest included as provided in
the foregoing clause (ii) may be
deducted when paid; and (v) there shall not
be deducted from the aggregate
amount of Investments any decrease in the
value thereof.
Issuing Lender. Bank
of America.
Jumpking. Jumpking,
Inc., a Utah corporation.
Lender or Lenders.
Bank of America and the other lending institutions
listed on Schedule 1 hereto and any other
person who becomes an assignee of any
rights and obligations of a Lender pursuant
to 18 and, unless the context
otherwise requires, the Issuing Lender and
the Cash Management Bank.
Lending Office. A
Domestic Lending Office or a LIBOR Lending Office.
Letter of Credit. See
4.1.
Letter of Credit Application. With respect to any Letter of
Credit
issued for the account of the Borrower
hereunder, an application for such Letter
of Credit made to the Issuing Lender on its
customary form.
Letter of Credit Fee.
See 4.6.
LIBOR Business Day.
Any day on which commercial banks are open for
international business (including dealings
in U.S. dollar deposits) in London.
LIBOR Lending Office.
Initially, the office of each Lender designated as
such by notice to the Borrower; thereafter,
such other office of such Lender, if
any, that shall be making or maintaining
LIBOR Rate Loans.
LIBOR Rate. For any
Interest Period with respect to a LIBOR Rate Loan,
the rate of interest equal to (i) the rate
determined by the Administrative
Agent at which Dollar deposits for such
Interest Period are offered based on
information presented on Page 3750 of the
Dow Jones Market Service (formerly
known as the Telerate Service) as of 11:00
a.m. London time on the second LIBOR
Business Day prior to the first day of such
Interest Period, divided by (ii) a
number equal to 1.00 minus the Eurocurrency
Reserve Rate. If the
rate described
above does not appear on the Dow Jones
Market Service on any applicable interest
determination date, the LIBOR Rate shall be
the rate (rounded upward, if
necessary, to the nearest one
hundred-thousandth of a percentage point),
determined on the basis of the offered
rates for deposits in Dollars for a
period of time comparable to such LIBOR
Rate Loan which are offered by four
major banks in the London interbank market
at approximately 11:00 a.m. London
time, on the second LIBOR Business Day
prior to the first day of such Interest
Period as selected by the Administrative
Agent. The principal
London office of
each ofthe four major London banks will be
requested to provide a quotation of
its Dollar deposit offered rate.
If at least two such
quotations are provided,
the rate for that date will be the
arithmetic mean of the quotations. If fewer
than two quotations are provided as
requested, the rate for that date will be
determined on the basis of the rates quoted
for loans in Dollars to leading
European banks for a period of time
comparable to such Interest Period offered
by major banks in New York City at
approximately 11:00 a.m. New York City time,
on the second LIBOR Business Day prior to the
first day of such Interest
Period. In the event that the
Administrative Agent is unable to obtain any such
quotation as provided above, it will be
considered that LIBOR Rate pursuant to a
LIBOR Rate Loan cannot be determined.
LIBOR Rate Loans.
Loans bearing interest calculated by reference to the
LIBOR Rate.
Liens. Any
encumbrance, mortgage, deed of trust, assignment, attachment,
deposit arrangement, lien (statutory,
judgment or otherwise), pledge,
hypothecation, charge, restriction or other
security interest, security
agreement, or any interest of any kind
securing any obligation of any entity or
person, whether such interest is based on
common law, civil law, statute or
contract..
Loan
Documents. This Credit
Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters
of Credit, the Guaranties, the
Security Documents, the Back Bay
Intercreditor Agreement, the Fee Letter, and
any other agreement between any Credit
Party and/or the Administrative Agent
and/or any Lender relating to fee
arrangements.
Loan
Request. See
2.6.1.
Loans. The Revolving
Credit Loans.
Management Agreements
Each of the Management Agreements dated as of
September 24, 1999 among the Borrower,
Holdings, and each of Scott Watterson and
Gary Stevenson, the Management Agreement
dated as of September 24, 1999 among
the Borrower, Holdings and Bain Capital,
Inc. and Section 7.1(b) of Securities
Purchase Agreement dated as of September
24, 1999 between Holdings and CS First
Boston, each as amended from time to time
in accordance with the provisions of
this Credit Agreement.
Maturity Date. October
31, 2010.
Maximum Drawing Amount. The maximum aggregate amount that
the
beneficiaries may at any time draw under
outstanding Letters of Credit issued
for the account of the Borrower, as such
aggregate amount may be reduced from
time to time pursuant to the terms of such
Letters of Credit.
Mortgaged Property.
Any Real Estate which is subject to any Mortgage.
Mortgages. (a) The
mortgage(s) and, if applicable, deed(s) of trust,
dated on or prior to the Closing Date, from
any Credit Party to the
Administrative Agent with respect to the
fee and, if applicable, leasehold
interests of such Credit Party in the
properties listed on Schedule 1(a) hereto
and (b) any other deeds of mortgage, deeds
of trust, or deeds of leasehold
mortgage executed and delivered to the
Administrative Agent after the Closing
Date pursuant to 7.16 hereof, in each case,
in form and substance satisfactory
to the Administrative Agent.
Multiemployer Plan.
Any multiemployer plan within the meaning of 3(37)
of ERISA maintained or contributed to by
any Credit Party or any ERISA
Affiliate.
Net
Orderly Liquidation Value. With respect to any inventory, the
net
appraised orderly liquidation value of such
inventory, as determined from time
to time by the Administrative Agent by
reference to the most recent appraisal of
the inventory, machinery and equipment, as
applicable, of the Borrower performed
by an appraisal firm acceptable to the
Administrative Agent.
Non-Financed Capital Expenditures. Capital Expenditures paid in cash
and
not financed with Indebtedness for borrowed
money; provided that Capital
Expenditures financed with the proceeds of
Revolving Loans shall be deemed to
constitute Non-Financed Capital
Expenditures for purposes of this Credit
Agreement.
Non-U.S. Lender. See
5.2.3.
NordicTrack.
NordicTrack, Inc., a Utah corporation.
Obligations. All
indebtedness, obligations and liabilities of the Credit
Parties to any of the Lenders, the Issuing
Lender, the Administrative Agent, the
Cash Management Bank or any of their
Affiliates, individually or collectively,
existing on the date of this Credit
Agreement or arising thereafter, direct or
indirect, joint or several, absolute or
contingent, matured or unmatured,
liquidated or unliquidated, secured or
unsecured, arising by contract, operation
of law or otherwise, arising or incurred
under this Credit Agreement or any of
the other Loan Documents or any Derivative
Agreement or in respect of any of the
Loans made, or any obligations under
Derivative Agreements or Cash Management
Obligations or Reimbursement Obligations
incurred or any of the Letter of Credit
Applications, Letters of Credit or other
instruments at any time evidencing any
thereof.
Operating Account. See
2.6.2.
Outstanding or outstanding. With respect to the Loans, the
aggregate
unpaid principal thereof as of any date of
determination.
Patent Agreement. The
Patent Collateral Assignment and Security
Agreement, made in favor of the
Administrative Agent, on behalf of itself and
the other Lenders, by each applicable
Credit Party.
PBGC. The Pension
Benefit Guaranty Corporation created by 4002 of ERISA
and any successor entity or entities having
similar responsibilities.
Perfection Certificates. The Perfection Certificates
referenced to and
defined in each of the Security
Agreements.
Permitted Acquisition.
The acquisition of any Person, business, or
specified group of assets (the Target) by
any Credit Party, provided that, with
respect to any such acquisition, (1) the
Administrative Agent and the Required
Lenders approve, in their sole discretion,
such acquisition in writing in
advance or (2) each of the following
conditions is met:
(a) immediately
prior to and after giving effect to, such
acquisition, no Default or Event of Default
shall then exist, and the Borrower
shall so certify;
(b)
the Target is located in the United States or Canada;
(c)
if applicable, the Borrower shall certify compliance with the
financial covenant contained in 9 on a pro
forma basis after giving effect to
such acquisition;
(d)
(i) the consideration therefor shall be paid in cash or by the
issuance of unsecured Indebtedness
permitted hereby or assumption of unsecured
Indebtedness of the Target permitted hereby
(provided that any Indebtedness so
assumed shall have been in existence prior
to, and shall not have been incurred
in contemplation of, such acquisition, and
shall not be secured by any assets of
the Target or any Credit Party), (ii) the
aggregate consideration paid or to be
paid (in cash or by such issuance or
assumption of Indebtedness) by the Credit
Parties in connection with any one such
acquisition shall not exceed $5,000,000
and (iii) the aggregate consideration paid
or to be paid (in cash or by such
issuance or assumption of indebtedness) by
the Credit Parties in connection with
all such acquisitions made during any
Fiscal Year shall not exceed $10,000,000;
(e)
such acquisition shall have been approved by the board of
directors and shareholders, if required, of
the Target;
(f)
immediately prior to giving effect to such acquisition, Excess
Availability shall be no less than
$55,000,000;
(g)
at least thirty (30) days prior to the consummation of such
acquisition, the Borrower shall deliver to
the Administrative Agent updated
versions of the most recent projections
provided to the Administrative Agent
pursuant to the terms of this Credit
Agreement, reflecting that Excess
Availability shall be $40,000,000 or
greater for at least ninety (90) days after
the consummation of the acquisition;
(h)
either (i) such acquisition is the acquisition of assets (and
assumption of liabilities) only (for use in
substantially the same line of
business as the line of business of the
Credit Parties) or (ii) such acquisition
involves the purchase of the Capital Stock
or other equity interests of a Target
and each of the following conditions is
met:
(A)
such acquisition is the acquisition of one hundred percent (100%)
of
the Capital Stock of such Target;
(B)
such Target is in substantially the same line of business as
the
Credit Parties;
(C)
one of the Credit Parties is the survivor of any merger or
consolidation with such Target;
(D)
not less than thirty (30) Business Days prior to such
acquisition,
the Borrower shall (i) notify the
Administrative Agent and the Lenders thereof,
identifying such Target, the proposed
purchase price and terms of payment
thereof, and the proposed closing date for
such acquisition, and (ii) provide to
the Administrative Agent (A) the most
recent draft acquisition agreement
relating to such transaction and all
related documents, instruments and
agreements and (B) all recent and
historical financial information regarding
such Target available to the Credit
Parties;
(E)
contemporaneously with the occurrence of any such acquisition,
the
Borrower shall (I) cause such Target to
guaranty all of the Obligations
hereunder pursuant to a guaranty in form
and substance satisfactory to the
Administrative Agent, which such guaranty
shall be a Loan Document hereunder,
(II) cause such Target to grant to the
Administrative Agent, for the benefit of
the Administrative Agent and the Lenders, a
first priority perfected security
interest and lien upon all of its assets,
(III) pledge or cause the applicable
Credit Party to pledge to the
Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, 100%
of the Capital Stock of such Target
(limited, in the case of any Target that is
a foreign Subsidiary that is a
controlled foreign corporation under
Section 957 of the Internal Revenue Code,
to a pledge of 65% of the Capital Stock of
each such Target to the extent the
pledge of any greater percentage would
result in material adverse tax
consequences to the Borrower), and (IV)
cause such Target to deliver to the
Lenders and the Administrative Agent (aa)
evidence of proper corporate or other
authorization, and (bb) legal opinions with
respect to each of the matters and
documents set forth in this clause (E), in
each case, in form and substance
satisfactory to the Administrative Agent
and the Lenders; and
(F)
the Borrower shall provide to the Administrative Agent such
additional information relating to such
Target and the proposed acquisition as
the Administrative Agent may reasonably
request.
Permitted Liens. Liens
permitted by 8.3 hereof.
Person. Any
individual, corporation, limited liability company,
partnership, limited partnership, trust,
unincorporated association, business,
or other legal entity, or any Governmental
Authority.
Pledge Agreements. The
Borrower Pledge Agreement, the Holdings Pledge
Agreement the International Pledge
Agreements, the ICON Fitness Holdings Pledge
Agreements and any other pledge agreement
or share charge granted by any Credit
Party (as required by this Credit Agreement
or any other Loan Document).
Real
Estate. All real
property at any time owned or leased (as lessee or
sublessee) by any Credit Party.
Record. The grid
attached to a Revolving Credit Note or the Loan Account
maintained by a Lender with respect to
Revolving Credit Loans made by such
Lender.
Reference Period. As
of any date of determination, the period of four
consecutive Fiscal Quarters ending on such
date; provided that (a) for the
Fiscal Quarter ending on or about November
30, 2005, the Reference Period shall
be deemed to be such Fiscal Quarter then
ended, (b) for the Fiscal Quarter
ending on or about February 28, 2006, the
Reference Period shall be deemed to be
the two Fiscal Quarters then ended, and (c)
for the Fiscal Quarter ending on or
about May 31, 2006, the Reference Period
shall be deemed to be the three Fiscal
Quarters then ended.
Register. See
18.3.
Reimbursement Obligation. The Borrowers obligations to
reimburse the
Administrative Agent and the Lenders on
account of any drawing under any Letter
of Credit as provided in 4.2.
Related Parties. With
respect to any specified Person, such Persons
Affiliates and the respective directors,
and officers of such Person.
Replacement Lender.
See 5.11.
Required Lenders. As of any date, Lenders, excluding Delinquent
Lenders,
holding Loans and participating interests
in the risks relating to Letters of
Credit constituting at least fifty-one
percent (51%) of the outstanding Loans
and Letters of Credit; or, if no Loans or
Letters of Credit are then
outstanding, Lenders, excluding Delinquent
Lenders, whose Commitments constitute
at least fifty-one percent (51%)of the
Total Commitment.
Reserves. As
determined by the Administrative Agent in the exercise of
its reasonable discretion and upon written
notice to the Borrower, such amounts
as the Administrative Agent may from time
to time establish and revise (a) to
reflect (i) any Default or Event of Default
or (ii) events, conditions,
contingencies or risks which do or may have
a material adverse effect on the
business, assets, operations or financial
condition of the Credit Parties (taken
as a whole), or the ability of the Borrower
and the other Credit Parties to
fulfill their obligations under this Credit
Agreement or the other Loan
Documents or (b) to reflect the belief of
the Administrative Agent that any
Borrowing Base Report or other collateral
report or financial information
furnished by or on behalf of any Credit
Party to the Administrative Agent or any
of the Lenders is or may have been
incomplete, inaccurate or misleading in any
material respect, (c) to reflect events,
conditions, contingencies or risks
which would reasonably be expected to have
a material adverse effect on the
value of the Collateral, taken as a whole,
or the value of the security
interests and other rights of the
Administrative Agent and the Lenders in the
Collateral (including the enforceability,
perfection or priority thereof), (d)
in respect of any dilution of Accounts
Receivable of the Borrower and its
domestic and Canadian Subsidiaries in
excess of five percent (5%) on a trailing
twelve (12) month basis, (e) in respect of
requirements under
Section 2.6(b) of
the Back Bay Intercreditor Agreement, (f)
in respect of any Derivative
Agreements or Cash Management Obligations,
or (g) in respect of inventory held
at a location leased by the Borrower or any
domestic or Canadian Subsidiary
where the Administrative Agent has not
received a waiver from the lessor (and
any sublessor) of such property, in form
and substance satisfactory to the
Administrative Agent. Reserves may include,
but are not limited to: rent,
whether for personal or real property but
only if a lessors or landlords waiver,
in a form acceptable to the Administrative
Agent, has not been received by the
Administrative Agent from such lessor or
landlord; customer credits; payables
based upon past due normal trade terms;
gift certificates; frequent shopper
programs; layaways and customer deposits;
taxes and other governmental charges
(including, without limitation, to the
extent of any net liabilities of the
Credit Parties in respect of the Harmonized
Sales Tax, the Quebec Sales Tax and
any other applicable sales tax) whether ad
valorem, personal or real property or
otherwise and whether or not the tax claims
therefor may have priority over the
Administrative Agents security interest in
any of the Collateral; and any
customs, duty, freight or other
out-of-pocket costs or expenses required or
advisable to land any inventory the
purchase of which is supported by a Letter
of Credit.
Restricted Payment.
With respect to any Credit Party (a) the declaration
or payment of any dividend or the
incurrence of any liability to make any other
payment or distribution of cash or other
property or assets in respect of
Capital Stock; (b) any payment on account
of the purchase, redemption,
defeasance, sinking fund or other
retirement of such Credit Partys Capital Stock
or any other payment or distribution made
in respect thereof, either directly or
indirectly; (c) any payment or prepayment
of principal of, premium, if any, or
interest, fees or other charges on or with
respect to, and any redemption,
purchase, retirement, defeasance, sinking
fund or similar payment and any claim
for rescission with respect to, any
Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or
to obtain the surrender of, any
outstanding warrants, options or other
rights to acquire Capital Stock of such
Credit Party now or hereafter outstanding;
(e) any payment of a claim for the
rescission of the purchase or sale of, or
for material damages arising from the
purchase or sale of, any shares of such
Credit Partys Capital Stock or of a
claim for reimbursement, indemnification or
contribution arising out of or
related to any such claim for damages or
rescission; (f) any payment, loan,
contribution, or other transfer of funds or
other property to any holder of the
Capital Stock of such Credit Party other
than payment of compensation in the
ordinary course to stockholders who are
employees of such Credit Party; and (g)
any payment of management fees (or other
fees of a similar nature) by such
Credit Party to any equity holder or
Affiliate of such Credit Party.
Revolving Credit Loans. The revolving loans to be made by
the Lenders to
the Borrower (including Swing Line Loans)
pursuant to 2 hereof.
Revolving Credit Notes. See 2.4.
Revolving Exposure. At
any time, the sum of the outstanding amount of
all Revolving Credit Loans plus the Maximum
Drawing Amount and all Unpaid
Reimbursement Obligations.
Security Agreement.
The Security Agreement of even date herewith entered
into by and among the Administrative Agent,
on behalf of itself and the Lenders,
and each Credit Party that is a signatory
thereto.
Security Documents.
The Guaranties, the Security Agreement, the
Copyright Agreement, the Patent Agreement,
the Trademark Agreement, the Pledge
Agreements, the Mortgages, the Collateral
Assignment of Intercompany Notes, the
U.K. Debenture, the Agency Account
Agreements, the Bonds, the Deed of Hypothec,
the ICON du Canada Pledge Agreement and all
other instruments and documents,
including without limitation Uniform
Commercial Code and Personal Property
Security Act financing statements, and
other equivalent registrations and
personal property security filings with
respect to any other applicable
jurisdiction, control agreements and the
like, required to be executed or
delivered pursuant to, or in connection
with, this Credit Agreement or any other
Loan Document.
Senior Management. The
chairman, president, chief financial officer,
chief executive officer, any vice
president, the cash manager, the treasurer,
the controller, or the general counsel of
the Borrower.
Settlement. With
respect to any Swing Line Loans, the making or
receiving of payments, in immediately
available funds, by the Lenders, to the
extent necessary to cause each Lenders
actual share of the outstanding amount of
Revolving Credit Loans (after giving effect
to any Loan Request) to be equal to
such Lenders Commitment Percentage of the
outstanding amount of such Revolving
Credit Loans (after giving effect to any
Loan Request), in any case where, prior
to such event or action, the actual share
is not so equal.
Settlement Amount. See
2.10.1.
Settlement Date. (a)
Friday of each week, or if a Friday is not a
Business Day, the Business Day immediately
following such Friday, (b) at the
option of the Administrative Agent, on any
Business Day following a day on which
the account officers of the Administrative
Agent active upon the Borrowers
account become aware of the existence of an
Event of Default, (c) the Business
Day immediately following any day on which
the Administrative Agent gives
written notice to the Lenders to effect a
Settlement, (d) the Maturity Date and
(e) on the third (3rd) Business Day
following any date on which the Borrower
requests a conversion of a Swing Line Loan
to a LIBOR Rate Loan.
Settling Lender. See
2.10.1.
Specified Required Lenders. As of any date, at least three (3)
Lenders,
excluding Delinquent Lenders, holding Loans
and participating interests in the
risks relating to Letters of Credit
constituting at least fifty-one percent
(51%) of the outstanding Loans and Letters
of Credit; or, if no Loans or Letters
of Credit are then outstanding, at least
three (3) Lenders, excluding Delinquent
Lenders, whose Commitments constitute at
least fifty-one percent (51%)of the
Total Commitment.
Stockholders Agreement. means the certain Stockholders Agreement
among
the stockholders of Holdings dated as of
September 24, 1999.
Subordinated Debt. The
Indebtedness of the Borrower evidenced by the
Subordinated Notes and any other unsecured
Indebtedness of any Credit Party that
is expressly subordinated and made junior
to the payment and performance in full
of the Obligations, and evidenced as such
by a subordination and intercreditor
agreement or by another written instrument
containing subordination provisions
in form and substance approved by the
Administrative Agent in writing.
Subordinated Debt Documents. The Subordinated Notes and the
Subordinated
Indenture.
Subordinated Indenture. The Indenture between the Borrower
and The Bank
of New York dated as of April 9, 2002, as
from time to time amended.
Subordinated Notes.
The 11.25% unsecured Subordinated Notes due 2012
issued by the Borrower in an aggregate
original principal amount of
$155,000,000.
Subsidiary. Any
corporation, association, trust, or other business
entity of which the designated parent shall
at any time own directly or
indirectly through a Subsidiary or
Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Unless otherwise
specified, all
references herein to a Subsidiary or to
Subsidiaries shall refer to a Subsidiary
or Subsidiaries of the Borrower.
Subsidiary Guarantors.
The domestic and Canadian Subsidiaries of the
Borrower that have executed a Guaranty.
Subsidiary Guaranty.
The guaranty granted
or to be granted on or about
the date hereof executed by International
Holdings, Universal, Free Motion, ICON
IP, NordicTrack and ICON New Brunswick, in
favor of the Administrative Agent and
the Lenders.
Substituted Lender.
See 5.11.
Swing Line Loans. See
2.6.2.
Synthetic Lease. Any
lease of goods or other property, whether real or
personal, which is treated as an operating
lease under GAAP and as a loan or
financing for U.S. or Canadian income tax
purposes.
Title Insurance Company. (a) With respect to the Mortgaged
Property
located in Utah, Stewart Title Guaranty
Company and (b) with respect to the
Mortgaged Property located in Quebec, First Canadian
Title.
Title Policy. In
relation to each Mortgaged Property, an ALTA standard
form title insurance policy issued by the
Title Insurance Company (with such
reinsurance or co-insurance as the
Administrative Agent may require, any such
reinsurance to be with direct access
endorsements) in such amount as may be
determined by the Administrative Agent
insuring the priority of the Mortgage of
such Mortgaged Property and that a Credit
Party holds marketable fee simple or
leasehold title to such Mortgaged Property,
subject only to Permitted Liens and
which shall not contain exceptions for
mechanics liens or persons in occupancy,
shall not insure over any matter except to
the extent that any such affirmative
insurance is acceptable to the
Administrative Agent in its sole discretion, and
shall contain such endorsements and
affirmative insurance as the Administrative
Agent in its discretion may require,
including but not limited to (a)
comprehensive endorsement, (b) variable
rate of interest endorsement, (c)
usury endorsement, (d) revolving credit
endorsement, (e) tie-in endorsement, (f)
doing business endorsement and (g) ALTA
form 3.1 zoning endorsement.
Total Commitment. The
sum of the Commitments of the Lenders, as in
effect from time to time. As of the Closing Date, the Total
Commitment is
$250,000,000.
Total Outstandings. At
any time, the sum of the outstanding amount of
all Revolving Loans (excluding Swing Line
Loans) plus the Maximum Drawing Amount
and all Unpaid Reimbursement
Obligations.
Trademark Agreement.
The Trademark Collateral Security and Pledge
Agreement, made in favor of the
Administrative Agent, on behalf of itself and
the Lenders, by each applicable Credit
Party.
Type. As to any
Revolving Credit Loan, its nature as a Base Rate Loan or
LIBOR Rate Loan.
U.K.
Debenture. The
Debenture granted or to be granted on or about the
date hereof entered into by and among the
Administrative Agent, on behalf of
itself and the Lenders, and ICON Fitness
Holdings, which shall include, without
limitation, a charge over 65% of the
Capital Stock of ICON Health & Fitness
Limited.
Universal. Universal
Technical Services, a Utah corporation.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for
which
the Borrower does not reimburse the
Administrative Agent and the Lenders on the
date specified in, and in accordance with,
4.3.
Versalite. Versalite
Systems Co., Ltd., a British Virgin Islands
company.
Voting Stock. Stock or
similar interests, of any class or classes
(however designated), the holders of which
are at the time entitled, as such
holders, to vote for the election of a
majority of the directors (or persons
performing similar functions) of the
corporation, association, trust or other
business entity involved, whether or not
the right so to vote exists by reason
of the happening of a contingency.
World Fitness, World
Fitness Sales, a Cayman Islands corporation.
1.2. Rules of Interpretation.
(a)
A reference to any document or agreement shall include such
document
or agreement as amended, modified or
supplemented from time to time in
accordance with its terms and the terms of
this Credit Agreement.
(b)
The singular includes the plural and the plural includes the
singular.
(c)
Unless otherwise expressly indicated, a reference to any law or
regulation includes any amendment or
modification to such law or regulation.
(d)
A reference to any Person includes its permitted successors and
permitted assigns.
(e)
Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a
consistent basis by the accounting entity
to which they refer.
(f)
The words include, includes and including are not limiting.
(g) All terms not
specifically defined herein or by GAAP, which terms are
defined in the Uniform Commercial Code as
in effect in the Commonwealth of
Massachusetts, have the meanings assigned
to them therein, with the term
instrument being that defined under Article
9 of the Uniform Commercial Code.
(h)
Reference to a particular refers to that section of this
Credit
Agreement unless otherwise indicated.
(i)
The words herein, hereof, hereunder and words of like import
shall
refer to this Credit Agreement as a whole
and not to any particular section or
subdivision of this Credit Agreement.
(j)
Unless otherwise expressly indicated, in the computation of
periods
of time from a specified date to a later
specified date, the word from means
from and including, the words to and until
each mean to but excluding, and the
word through means to and including.
(k)
This Credit Agreement and the other Loan Documents may use
several
different limitations, tests or
measurements to regulate the same or similar
matters. All such limitations, tests and
measurements are, however, cumulative
and are to be performed in accordance with
the terms thereof.
(l)
This Credit Agreement and the other Loan Documents are the result
of
negotiation among, and have been reviewed
by counsel to, among others, the
Administrative Agent and the Borrower and
are the product of discussions and
negotiations among all parties.
Accordingly, this
Credit Agreement and the
other Loan Documents are not intended to be
construed against the Administrative
Agent or any of the Lenders merely on
account of the Administrative Agents or
any Lenders involvement in the preparation
of such documents.
2. THE REVOLVING CREDIT
FACILITY.
2.1. Commitment to Lend. Subject to the terms and
conditions set forth
in this Credit Agreement, each of the
Lenders severally agrees to lend to the
Borrower and the Borrower may borrow,
repay, and reborrow from time to time from
the Closing Date up to but not including
the Maturity Date upon notice by the
Borrower to the Administrative Agent given
in accordance with 2.6, such sums as
are requested by the Borrower up to a
maximum aggregate amount outstanding
(after giving effect to all amounts
requested) at any one time equal to such
Lenders Commitment minus such Lenders
Commitment Percentage of the sum of (a)
the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations and (b) the
outstanding Swing Line Loans; provided that
the Revolving Exposure (after giving
effect to all amounts requested) shall not
at any time exceed the Gross
Availability. The Revolving Credit Loans shall
be made pro rata in accordance
with each Lenders Commitment Percentage.
Each request for a
Revolving
Credit Loan hereunder shall constitute a
representation and warranty by the
Borrower that the conditions set forth in
10 and 11, in the case of the initial
Revolving Credit Loans to be made on the
Closing Date, and 11, in the case of
all other Revolving Credit Loans, have been
satisfied on the date of such
request.
2.2. Commitment Fee.
The Borrower agrees to pay to the Administrative
Agent for the accounts of the Lenders in
accordance with their respective
Commitment Percentages a commitment fee
(the Commitment Fee) calculated at the
rate per annum equal to the Applicable
Commitment Fee Margin, as in effect from
time to time, on the average daily amount
during each calendar month or portion
thereof from the date hereof to the
Maturity Date by which the Total Commitment
exceeds the Total Outstandings during such
calendar month. The
Commitment Fee
shall be payable monthly in arrears on the
first day of each calendar month for
the immediately preceding calendar month
commencing on the first such date
following the date hereof, with a final
payment on the Maturity Date or any
earlier date on which the Commitments shall
terminate.
2.3. Reduction of Total Commitment. The Borrower shall have the
right
at any time and from time to time upon five
(5) Business Days prior written
notice to the Administrative Agent to
reduce by $5,000,000 or an integral
multiple of $1,000,000 in excess thereof or
to terminate entirely the Total
Commitment in excess of the Revolving
Exposure at such time, whereupon the
Commitments of the Lenders shall be reduced
pro rata in accordance with their
respective Commitment Percentages of the
amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any
notice of the
Borrower delivered pursuant to this 2.3,
the Administrative Agent will notify
the Lenders of the substance thereof.
Upon the effective
date of any such
reduction or termination, the Borrower
shall pay to the Administrative Agent for
the respective accounts of such Lenders the
full amount of any Commitment Fee
then accrued on the amount of the
reduction. No reduction or termination of the
Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall
be
evidenced by separate promissory notes of
the Borrower in substantially the form
of Exhibit H hereto (each a Revolving
Credit Note), dated as of the Closing Date
(or such other date on which a Lender may
become a party hereto in accordance
with 18 hereof) and completed with
appropriate insertions. One Revolving Credit
Note shall be payable to the order of each
Lender in a principal amount equal to
such Lenders Commitment or, if less, the
outstanding amount of all Revolving
Credit Loans made by such Lender, plus
interest accrued thereon, as set forth
below. The Borrower irrevocably
authorizes each Lender to make or cause to be
made, at or about the time of the Drawdown
Date of any Revolving Credit Loan or
at the time of receipt of any payment of
principal on such Lenders Revolving
Credit Note, an appropriate notation on
such Lenders Revolving Credit Note
Record reflecting the making of such
Revolving Credit Loan or
(as the case may be) the receipt of such
payment. The
outstanding amount of the
Revolving Credit Loans set forth on such
Lenders Revolving Credit Note Record
shall be prima facie evidence of the
principal amount thereof owing and unpaid
to such Lender, but the failure to record,
or any error in so recording, any
such amount on such Lenders Revolving
Credit Note Record shall not limit or
otherwise affect the obligations of the
Borrower hereunder or under any
Revolving Credit Note to make payments of
principal of or interest on any
Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided
in 5.12,
(a)
Each Revolving Credit Loan which is a Base Rate Loan shall bear
interest for the period commencing with the
Drawdown Date thereof and ending on
the last day of the Interest Period with
respect thereto at the rate per annum
equal to the Base Rate plus the Applicable
Margin with respect to Base Rate
Loans as in effect from time to time.
(b)
Each Revolving Credit Loan which is a LIBOR Rate Loan shall
bear
interest for the period commencing with the
Drawdown Date thereof and ending on
the last day of the Interest Period with
respect thereto at the rate per annum
equal to the LIBOR Rate determined for such
Interest Period plus the Applicable
Margin with respect to LIBOR Rate Loans as
in effect from time to time.
The Borrower promises to pay interest on
each Revolving Credit Loan in arrears
on each Interest Payment Date with respect
thereto.
2.6. Requests for Revolving Credit Loans.
2.6.1. General. The
Borrower shall give to the Administrative Agent
written notice in the form of Exhibit A
hereto of each Revolving Credit Loan
requested hereunder (a Loan Request) no
less than (a) 1:00 p.m. (Boston time) on
the same Business Day of the proposed
Drawdown Date of any Base Rate Loan and
(b) three (3) Business Days prior to the
proposed Drawdown Date of any LIBOR
Rate Loan. Each such notice shall specify (i)
the principal amount of the
Revolving Credit Loan requested, (ii) the
proposed Drawdown Date of such
Revolving Credit Loan, (iii) the Interest
Period for such Revolving Credit Loan
and (iv) the Type of such Revolving Credit
Loan. Promptly upon
receipt of any
such notice, the Administrative Agent shall
notify each of the Lenders thereof.
Each Loan Request shall be irrevocable and
binding on the Borrower and shall
obligate the Borrower to accept the
Revolving Credit Loan requested from the
Lenders on the proposed Drawdown Date.
Each Loan Request with
respect to a Base
Rate Loan shall be in a minimum aggregate
amount of $500,000 or an integral
multiple of $100,000 in excess thereof and
each Loan Request with respect to a
LIBOR Rate Loan shall be in a minimum
aggregate amount of $1,000,000 or an
integral multiple of $100,000 in excess
thereof.
2.6.2. Swing Line.
Notwithstanding the notice and minimum amount
requirements set forth in 2.6.1 but
otherwise in accordance with the terms and
conditions of this Credit Agreement, the
Administrative Agent may, in its sole
discretion and without conferring with the
Lenders, make Revolving Credit Loans
to the Borrower (a) by entry of credits to
the Borrowers operating account No.
9427740498(the Operating Account) with the
Cash Management Bank to cover checks
or other charges which the Borrower has
drawn or made against such account or
(b) in an amount as otherwise requested by
the Borrower; provided that the
maximum outstanding amount of advances made
by the Administrative Agent pursuant
to this 2.6.2 (each a Swing Line Loan)
shall not, at any time, exceed
$10,000,000. The Borrower hereby requests and
authorizes the Administrative
Agent to make from time to time such Swing
Line Loans by means of appropriate
entries of such credits sufficient to cover
checks and other charges then
presented for payment from the Operating
Account or as otherwise so requested.
The Borrower acknowledges and agrees that
the making of the Swing Line Loans
shall, in each case, be subject in all
respects to the provisions of this Credit
Agreement as if they were Revolving Credit
Loans covered by a Loan Request
including, without limitation, the
limitations set forth in 2.1 and the
requirements that the applicable provisions
of 10 (in the case of Swing Line
Loans made on the Closing Date) and 11 be
satisfied. All actions
taken by the
Administrative Agent pursuant to the
provisions of this 2.6.2 shall be
conclusive and binding on the Borrower and
the Lenders absent the Administrative
Agents gross negligence or willful
misconduct. Swing Line
Loans made pursuant
to this 2.6.2 shall be Base Rate Loans
until converted in accordance with the
provisions of this Credit Agreement and,
prior to a Settlement, such interest
shall be for the account of the
Administrative Agent.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan.
The
Borrower may elect from time to time to
convert any outstanding Revolving Credit
Loan to a Revolving Credit Loan of another
Type, provided that (a) with respect
to any such conversion of a LIBOR Rate Loan
to a Base Rate Loan, the Borrower
shall give the Administrative Agent at
least three (3) Business Days prior
written notice of such election; (b) with
respect to any such conversion of a
Base Rate Loan to a LIBOR Rate Loan, the
Borrower shall give the Administrative
Agent at least three (3) Business Days
prior written notice of such election;
(c) with respect to any such conversion of
a LIBOR Rate Loan into a Base Rate
Loan, such conversion shall only be made on
the last day of the Interest Period
with respect thereto and (d) no Revolving
Credit Loan may be converted into, or
continued as, a LIBOR Rate Loan when any
Default or Event of Default has
occurred and is continuing. Promptly upon the receipt of any
such election, the
Administrative Agent shall notify the
Lenders thereof. On
the date on which
such conversion is being made, each Lender
shall take such action as is
necessary to transfer its Commitment
Percentage of such Revolving Credit Loans
to its Domestic Lending Office or its LIBOR
Lending Office, as the case may be.
All or any part of outstanding Revolving
Credit Loans of any Type may be
converted into a Revolving Credit Loan of
another Type as provided herein,
provided that any partial conversion shall
be in an aggregate principal amount
of $1,000,000 or a whole multiple of
$100,000 in excess thereof. Each
Conversion Request relating to the
conversion of a Revolving Credit Loan to a
LIBOR Rate Loan shall be irrevocable by the
Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loan of any Type may be continued as
a Revolving Credit Loan of the same
Type upon the expiration of an Interest
Period with respect thereto by
compliance by the Borrower with the notice
provisions contained in 2.7.1;
provided that no LIBOR Rate Loan may be
continued as such when any Default or
Event of Default has occurred and is
continuing, but shall be automatically
converted to a Base Rate Loan on the last
day of the first Interest Period
relating thereto ending during the
continuance of any Default or Event of
Default of which officers of the
Administrative Agent active upon the Borrowers
account have actual knowledge. In the event that the Borrower
fails to provide
any such notice with respect to the
continuation of any LIBOR Rate Loan, then
such LIBOR Rate Loan shall be automatically
converted to a Base Rate Loan on the
last day of the first Interest Period
relating thereto. The
Administrative
Agent shall notify the Lenders thereof
promptly when any such automatic
conversion contemplated by this 2.7 is
scheduled to occur.
2.7.3. LIBOR Rate Loans. Any conversion to or from LIBOR
Rate Loans
shall be in such amounts and be made
pursuant to such elections so that, after
giving effect thereto, the aggregate
principal amount of all LIBOR Rate Loans
having the same Interest Period shall not
be less than $1,000,000 or a whole
multiple of $100,000 in excess thereof.
No more than seven (7)
LIBOR Rate Loans
having different Interest Periods may be
outstanding at any time.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures. Not later than 1:00 p.m. (Boston
time) on
the proposed Drawdown Date of any Revolving
Credit Loans, each of the Lenders
will make available to the Administrative
Agent, at the Administrative Agents
Office, in immediately available funds, the
amount of such Lenders Commitment
Percentage of the amount of the requested
Revolving Credit Loans. Upon receipt
from such Lender of such amount, and upon
receipt of the documents required by
10 and 11 and the satisfaction of the other
conditions set forth therein, to the
extent applicable, the Administrative Agent
will make available to the Borrower
the aggregate amount of such Revolving
Credit Loans made available to the
Administrative Agent by such Lenders.
The failure or refusal
of any such Lender
to make available to the Administrative
Agent at the aforesaid time and place on
any Drawdown Date the amount of its
Commitment Percentage of the requested
Revolving Credit Loans shall not relieve
any other Lender of its
several obligation hereunder to make
available to the Administrative Agent the
amount of such other Lenders Commitment
Percentage of any requested Revolving
Credit Loans.
2.8.2. Advances by Administrative Agent. The Administrative Agent may,
unless notified to the contrary by any
Lender prior to a Drawdown Date, assume
that such Lender has made available to the
Administrative Agent on such Drawdown
Date the amount of such Lenders Commitment
Percentage of the Revolving Credit
Loans to be made on such Drawdown Date, and
the Administrative Agent may (but it
shall not be required to), in reliance upon
such assumption, make available to
the Borrower a corresponding amount.
If any such Lender
makes available to the
Administrative Agent such amount on a date
after such Drawdown Date, such Lender
shall pay to the Administrative Agent on
demand an amount equal to the product
of (a) the average computed for the period
referred to in clause (c) below, of
the weighted average interest rate paid by
the Administrative Agent for federal
funds acquired by the Administrative Agent
during each day included in such
period, times (b) the amount of such
Lenders Commitment
Percentage of such Revolving Credit Loans,
times (c) a fraction, the numerator
of which is the number of days that elapse
from and including such Drawdown Date
to the date on which the amount of such
Lenders Commitment Percentage of such
Revolving Credit Loans shall become
immediately available to the Administrative
Agent, and the denominator of which is 360.
A statement of the
Administrative
Agent submitted to such Lender with respect
to any amounts owing under this
paragraph shall be prima facie evidence of
the amount due and owing to the
Administrative Agent by such Lender.
If the amount of such
Lenders Commitment
Percentage of such Revolving Credit Loans
is not made available to the
Administrative Agent by such Lender within
three (3) Business Days following
such Drawdown Date, the Administrative
Agent shall be entitled to recover such
amount from the Borrower on demand, with
interest thereon at the rate per annum
applicable to the Revolving Credit Loans
made on such Drawdown Date.
2.9. Change in Borrowing Base. The Borrowing Base shall be
determined
weekly (or at such other interval as may be
specified pursuant to 7.4(e)) by the
Administrative Agent by reference to the
Borrowing Base Report, collateral audit
reports, the Collateral Update Certificate,
the Accounts Receivable/Loan
Reconciliation Report delivered to the
Lenders and the Administrative Agent
pursuant to 7.4(d), any appraisals or
reappraisals of Eligible Inventory,
Eligible Machinery and Equipment or
Eligible Real Estate, respectively and/or
other information obtained by or provided
to the Administrative Agent. The
Administrative Agent shall give to the
Borrower written notice of any change in
the Borrowing Base determined by the
Administrative Agent, which notice shall be
effective upon its receipt by the
Borrower.
2.10. Settlements.
2.10.1. General. On
each Settlement Date, the Administrative Agent
shall, not later than 1:00 p.m. (Boston
time), give telephonic or facsimile
notice (a) to the Lenders and the Borrower
of the respective outstanding amount
of Swing Line Loans made by the
Administrative Agent on behalf of the Lenders
from the immediately preceding Settlement
Date through the close of business on
the prior day and (b) to such Lenders of
the amount (a Settlement Amount) that
each such Lender (a Settling Lender) shall
pay to effect a Settlement of any
Swing Line Loan. A statement of the Administrative
Agent submitted to such
Lenders and the Borrower or to the Lenders
with respect to any amounts owing
under this 2.10 shall be prima facie
evidence of the amount due and owing. Each
Settling Lender shall, not later than 2:00
p.m. (Boston time) on such Settlement
Date, effect a wire transfer of immediately
available funds to the
Administrative Agent in the amount of the
Settlement Amount for such Settling
Lender. All funds advanced by such Lender
as a Settling Lender pursuant to this
2.10 shall for all purposes be treated as a
Revolving Credit Loan made by such
Settling Lender to the Borrower and all
funds received by such Lender pursuant
to this 2.10 shall for all purposes be
treated as repayment of amounts owed with
respect to Revolving Credit Loans made by
such Lender. In the
event that any
bankruptcy, reorganization, liquidation,
receivership or similar cases or
proceedings in which the Borrower is a
debtor prevent a Settling Lender from
making any Revolving Credit Loan to effect
a Settlement as contemplated hereby,
such Settling Lender will make such
dispositions and arrangements with the other
Lenders with respect to such Revolving
Credit Loans, either by way of purchase
of participations, distribution, pro tanto
assignment of claims, subrogation or
otherwise as shall result in each Lenders
share of the outstanding Revolving
Credit Loans being equal, as nearly as may
be, to such Lenders
Commitment Percentage of the outstanding
amount of the Revolving Credit Loans.
2.10.2. Failure to Make Funds Available. The Administrative Agent may,
unless notified to the contrary by any
Settling Lender prior to a Settlement
Date, assume that such Settling Lender has
made or will make available to the
Administrative Agent on such Settlement
Date the amount of such Settling Lenders
Settlement Amount, and, if applicable, the
Administrative Agent may (but it
shall not be required to), in reliance upon
such assumption, make available to
the Borrower a corresponding amount.
If any Settling Lender
makes available to
the Administrative Agent such amount on a
date after such Settlement Date, such
Settling Lender shall pay to the
Administrative Agent on demand an amount equal
to the product of (a) the average computed
for the period referred to in clause
(c) below, of the weighted average interest
rate paid by the Administrative
Agent for federal funds acquired by the
Administrative Agent during each day
included in such period, times (b) the
amount of such Settlement
Amount, times (c) a fraction, the numerator
of which is the number of days that
elapse from and including such Settlement
Date to the date on which the amount
of such Settlement Amount shall become
immediately available to the
Administrative Agent, and the denominator
of which is 360. A
statement of the
Administrative Agent submitted to such
Settling Lender with respect to any
amounts owing under this 2.10.2 shall be
prima facie evidence of the amount due
and owing to the Administrative Agent by
such Settling Lender.
If such Settling
Lenders Settlement Amount is not made
available to the Administrative Agent by
such Settling Lender within three (3)
Business Days following such Settlement
Date, the Administrative Agent shall be
entitled to recover such amount from the
Borrower on demand, with interest thereon
at the rate per annum applicable to
the Revolving Credit Loans as of such
Settlement Date.
2.10.3. No Effect on Other Lenders. The failure or refusal of any
Settling Lender to make available to the
Administrative Agent at the aforesaid
time and place on any Settlement Date the
amount of such Settling Lenders
Settlement Amount shall not (a) relieve any
other Settling Lender from its
several obligations hereunder to make
available to the Administrative Agent the
amount of such other Settling Lenders
Settlement Amount or (b) impose upon any
Lender, other than the Settling Lender so
failing or refusing, any liability
with respect to such failure or refusal or
otherwise increase the Commitment of
such other Lender.
2.11. Repayments of Revolving Credit Loans Prior to Event of
Default.
2.11.1. Credit
for Funds Received in Concentration Account. Prior to
the occurrence of an Event of Default as to
which the account officers of the
Administrative Agent active upon the
Borrowers account have actual knowledge,
(a) all funds and cash proceeds in the form
of money, checks and like items
received in the Concentration Account (as
defined in and as contemplated by
7.17) shall be credited to the Borrower, on
the same Business Day on which the
Administrative Agent determines that good
collected funds have been received,
and, prior to the receipt of good collected
funds, on a provisional basis until
final receipt of good collected funds, and
applied as contemplated by 2.11.2,
(b) all funds and cash proceeds in the form
of a wire transfer received in the
Concentration Account as contemplated by
7.17 shall be credited on the same
Business Day as the Cash Management Banks
receipt of such amounts in good
collected funds, and applied as
contemplated by 2.11.2, and (c) all funds and
cash proceeds in the form of an automated
clearing house transfer received in
the Concentration Account as contemplated
by 7.17 shall be credited, on the next
Business Day following the Cash Management
Banks receipt of such
amounts in
good collected funds, and applied as
contemplated by 2.11.2. For purposes of
the foregoing provisions of this 2.11.1,
the Cash Management Bank shall not be
deemed to have received any such funds or
cash proceeds on any day unless
received by the Cash Management Bank before
2:30 p.m. (Boston time) on such day.
The Borrower further acknowledges and
agrees that any such provisional credits
or credits in respect of wire or automatic
clearing house funds transfers shall
be subject to reversal if final collection
in good funds of the related item is
not received by, or final settlement of the
funds transfer is not made in favor
of, the Cash Management Banks in accordance
with the Cash Management Banks
customary procedures and practices for
collecting provisional items
or receiving settlement of funds
transfers.
2.11.2. Application of Payments Prior to Event of Default.
(a)
Prior to the occurrence of an Event of Default of which the
account
officers of the Administrative Agent active
on the Borrowers account have
knowledge, all funds transferred to the
Concentration Account and for which the
Borrower has received credits shall be
applied to the Obligations as follows:
(i)
first, to pay amounts then due and payable under this Credit
Agreement, the Revolving Credit Notes and
the other Loan Documents;
(ii)
second, to repay Swing Line Loans made by the Administrative
Agent
pursuant to 2.6.2 and for which Settlement
has not then been made;
(iii) third, to repay other Revolving Credit Loans which are Base
Rate
Loans;
(iv) fourth, to repay
Revolving Credit Loans which are LIBOR Rate Loans;
and
(v)
fifth, except as otherwise required by 4.2(b) and (c), to the
Operating Account.
(b)
All prepayments of LIBOR Rate Loans prior to the end of an
Interest
Period shall obligate the Borrower to pay
any breakage costs associated with
such LIBOR Rate Loans in accordance with
5.10. Prior to the
occurrence of an
Event of Default, the Borrower may elect to
avoid such breakage costs by
providing to the Administrative Agent cash
in an amount sufficient to cash
collateralize such LIBOR Rate Loans, but in
no event shall the Borrower be
deemed to have paid such LIBOR Rate Loans
until such cash has been paid to the
Administrative Agent for application to
such LIBOR Rate Loans.
Until such
application, the Administrative Agent may
elect to cause such cash collateral to
be deposited into either (i) a cash
collateral account pursuant to the terms of
a cash collateral agreement executed by the
Borrower and the Administrative
Agent and in form and substance
satisfactory to the Administrative Agent or (ii)
the Operating Account with appropriate
instructions prohibiting the Borrowers
withdrawal of such funds so long as they
remain cash collateral. In each such
case, the Borrower agrees to execute and
deliver to the Administrative Agent
such instruments and documents, including
Uniform Commercial Code and other
financing statements and agreements with
any third party depository banks, as
the Administrative Agent may request.
(c) All prepayments of the
Revolving Credit Loans pursuant to this 2.11.2
shall be allocated among the Lenders making
such Revolving Credit Loans, in
proportion, as nearly as practicable, to
the respective unpaid principal amount
of such Revolving Credit Loans outstanding,
with adjustments to the extent
practicable to equalize any prior payments
or repayments not exactly in
proportion. Prior to any Settlement Date,
however, all prepayments of the
Revolving Credit Loans shall be applied in
accordance with this 2.11.2, first to
outstanding Revolving Credit Loans of the
Administrative Agent.
2.12. Repayments of Revolving Credit Loans After Event of
Default.
Following the occurrence and during the
continuance of an Event of Default of
which the account officers of the
Administrative Agent active on the Borrowers
account have knowledge, all funds
transferred to the Concentration Account and
for which the Borrower has received credits
shall be applied to the Obligations
in accordance with 12.4.
2.13. Fixed Asset
Availability Maximum Amount Amortization. Commencing
on February 28, 2006, the Fixed Asset
Availability Maximum Amount shall be
automatically and permanently reduced by an
amount equal to $465,000 on the last
day of each of February, May, August and
November of each year.
2.14. Administrative Agent Advances. Notwithstanding anything to
the
contrary contained herein (including,
without limitation, the borrowing
limitations set forth in 2.1), but subject
to the limitations set forth in the
proviso contained in this 2.14, the
Administrative Agent is hereby authorized by
the Borrower and the Lenders, from time to
time at the request of the Borrower
but in the Administrative Agents sole
discretion, (a) after the occurrence and
during the continuance of a Default or an
Event of Default, or (b) at any time
that any of the other applicable conditions
precedent set forth in 11 have not
been satisfied, to make Revolving Credit
Loans to the Borrower on behalf of the
Lenders which the Administrative Agent, in
its reasonable business judgment,
deems necessary or desirable (i) to
preserve or protect the Collateral, or any
portion thereof, (ii) to enhance the
likelihood of, or maximize the amount of,
repayment of the Revolving Credit Loans and
other Obligations (other
than amounts in respect of Cash Management
Obligations and Derivative
Agreements), or (iii) to pay any other
amount chargeable to the Borrower
pursuant to the terms of this Agreement
(other than amounts in respect of Cash
Management Obligations and Derivative
Agreements), including, without
limitation, costs, fees and expenses as
described in 15 (any of the advances
described in this 2.14 being hereinafter
referred to as Administrative Agent
Advances); provided, that (w) the
Administrative Agent Advances shall be due and
payable on the earlier of (1) demand by the
Administrative Agent and (2) ninety
(90) days after the making thereof, (x) not
more than four (4) Administrative
Agent Advances shall be made in any
calendar year, (y) the Administrative Agent
shall not make any Administrative Agent
Advance to the Borrower if (A) after
giving effect to such Administrative Agent
Advance, the aggregate outstanding
principal amount of all Administrative
Agent Advances would exceed five percent
(5%) of the Borrowing Base at such time or
(B) the amount thereof would cause
the Revolving Exposure to exceed the Total
Commitment. The
Administrative Agent
Advances shall be repayable on demand and
secured by the Collateral, shall
constitute Revolving Credit Loans and
Obligations hereunder, and shall bear
interest at the rate applicable to Base
Rate Loans. The
Administrative Agent
shall notify each Lender and the Borrower
in writing of each such Administrative
Agent Advance promptly following the making
thereof, which notice shall include
a description of the purpose of such
Administrative Agent Advance. Each Lender
irrevocably agrees to purchase from the
Administrative Agent, upon demand, its
pro rata share (in accordance with its
Commitment Percentage) of the amount of
the outstanding Administrative Agent
Advances. Until such
purchase, all
payments in respect of the Administrative
Agent Advances shall be for the
account of the Administrative Agent.
3. REPAYMENT OF THE REVOLVING
CREDIT LOANS.
3.1. Maturity. The
Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and
payable on the Maturity Date, all of the
Revolving Credit Loans outstanding on such
date, together with any and all
accrued and unpaid interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans.
3.2.1. Excess Amounts.
If at any time the sum of the Revolving Exposure
exceeds the Gross Availability, then the
Borrower shall immediately pay the
amount of such excess to the Administrative
Agent for the respective accounts of
the Lenders for application: first, to any Swing Line Loans
outstanding,
second, to any Unpaid Reimbursement
Obligations; third, to all Revolving Credit
Loans advanced to the Borrower; and fourth,
to provide to the Administrative
Agent cash collateral for Reimbursement
Obligations as contemplated by 4.2(b)
and (c). Each payment of any Unpaid
Reimbursement Obligation or prepayment of
Revolving Credit Loans shall be allocated
among the Lenders, in proportion, as
nearly as practicable, to each
Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of
each Lenders Revolving Note or loan
account (as the case may be) with
adjustments to the extent practicable to
equalize any prior payments or repayments
not exactly in proportion. In
addition, the Borrower shall repay the
Revolving Credit Loans
in accordance
with 3.2.2.
3.2.2. Other Events. Immediately upon receipt by
any Credit Party of
net cash proceeds from any asset
disposition (excluding dispositions of
inventory in the ordinary course of
business), which, together with other asset
dispositions in a Fiscal Year results in
net cash proceeds in excess of $400,000
in the aggregate during such Fiscal Year,
the Borrower shall prepay the
Obligations in an amount equal to such
proceeds.
Notwithstanding the foregoing,
the proceeds of asset dispositions which
are reinvested in Capital Expenditures
within 180 days after the date of receipt
thereof need not be used to prepay the
Obligations. The Borrower shall report to
the Administrative Agent in writing
its intention to reinvest such proceeds
concurrently with each asset disposition
and shall also report the dates and amounts
of such reinvestments concurrently
therewith. All prepayments made hereunder
shall be applied in accordance with
3.2.2(d).
(b)
If any Credit Party issues Capital Stock (other than issuances
of
Capital Stock to employees of Holdings and
its Subsidiaries), no later than the
first Business Day following the date of
receipt of the net cash proceeds
thereof, the Borrower shall prepay the
Obligations in an amount equal to all
such net cash proceeds. Any such prepayment
shall be applied in accordance with
3.2.2(d).
(c)
The Borrower shall prepay the Obligations in an amount equal to
all
net cash proceeds received by any Credit
Party from Casualty Events which have
not been utilized by such Credit Party
within 180 days of receipt of such
proceeds to the repair or replacement of
the property so damaged, destroyed or
taken; provided, however, if (i) the amount
of such proceeds exceeds $10,000,000
or (ii) a Default or Event of Default has
occurred and is continuing, the
Borrower shall immediately prepay the
Obligations in an amount equal to such net
cash proceeds. Any such prepayment shall be
applied in accordance with 3.2.2(d).
(d)
All payments made pursuant to 3.2.2(a), (b) and (c) shall be
applied
to the Obligations as follows: first, to
any Unpaid Reimbursement Obligations;
second, to the Revolving Credit Loans; and
third, to provide to the
Administrative Agent cash collateral for
Reimbursement Obligations as
contemplated by 4.2(b) and (c), with (i) in
the case of payments made pursuant
to 3.2.2(a) and (b), a permanent reduction
in the Total Commitment in the event
that such permanent reduction is required
pursuant to the terms of the
Subordinated Debt Documents in an amount
equal to such payment and (ii) in the
case of payments made pursuant to 3.2.2(c),
a permanent reduction in the Total
Commitment in an amount equal to such
payment. Each payment
of any Unpaid
Reimbursement Obligations or prepayment of
Revolving Credit Loans shall be
allocated among the Lenders, in proportion,
as nearly as practicable, to each
Reimbursement Obligation or (as the case
may be) the respective unpaid principal
amount of each
Lenders Revolving Credit Note, with
adjustments to the extent practicable to
equalize any prior payments or repayments
not exactly in proportion. The
provisions of this 3.2.2 shall not impair
any restrictions set forth in the Loan
Documents with respect to the incurrence of
Indebtedness or asset dispositions
by any Credit Party.
3.3. Optional Repayments of Revolving Credit Loans. The Borrower shall
have the right, at its election, to repay
the outstanding amount of the
Revolving Credit Loans, as a whole or in
part, at any time without penalty or
premium, provided that any full or partial
prepayment of the outstanding amount
of any LIBOR Rate Loans pursuant to this
3.3 may be made only on the last day of
the Interest Period relating thereto
(unless breakage costs are paid by the
Borrower pursuant to 5.10 or cash
collateral is provided in accordance with
2.11.2(b)). The Borrower shall provide to the
Administrative Agent, no later
than 12:00 p.m. (Boston time) at least
three (3) Business Days prior written
notice of any proposed prepayment pursuant
to this 3.3, specifying the proposed
date of prepayment of any LIBOR Rate Loans
and the principal amount to be
prepaid. Each such partial prepayment of
the Revolving Credit Loans shall be
accompanied by the payment of accrued
interest on the principal prepaid to the
date of prepayment and shall be applied, in
the absence of instruction by the
Borrower, first to the principal of Base
Rate Loans and second to the principal
of LIBOR Rate Loans. Each partial prepayment shall be
allocated among the
Lenders, in proportion, as nearly as
practicable, to the respective unpaid
principal amount of each such Lenders
Revolving Credit Note or loan account, as
the case may be, with adjustments to the
extent practicable to equalize any
prior repayments not exactly in
proportion.
4. LETTERS OF CREDIT.
4.1. Letter of Credit Commitments.
4.1.1. Commitment to Issue Letters of Credit. Subject to the terms and
conditions hereof and the execution and
delivery by the Borrower of a letter of
credit application on the Issuing Lenders
customary form (a Letter of Credit
Application), the Administrative Agent on
behalf of the Lenders and in reliance
upon the agreement of such Lenders set
forth in 4.1.4 and upon the
representations and warranties of the
Borrower contained herein, agrees to
cause the Issuing Lender to issue, extend
and renew for the account of the
Borrower one or more standby or documentary
letters of credit (each
individually, a Letter of Credit), in such
form as may be requested from time to
time by the Borrower and agreed to by the
Administrative Agent and the Issuing
Lender; provided, however, that after
giving effect to such request, (i) the sum
of the aggregate Maximum Drawing Amount on
all Letters of Credit and all Unpaid
Reimbursement Obligations shall not exceed
$10,000,000 at any one time and (ii)
the Revolving Exposure shall not exceed the
Gross Availability at such time.
4.1.2. Letter of Credit Applications. Each Letter of Credit
Application
shall be completed to the satisfaction of
the Administrative Agent and the
Issuing Lender. In the event that any provision of
any Letter of Credit
Application shall be inconsistent with any
provision of this Credit Agreement,
then the provisions of this Credit
Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among
other things, (a) provide for the
payment of sight drafts for honor
thereunder when presented in accordance with
the terms thereof and when accompanied by
the documents described therein, and
(b) have an expiry date no later than the
date which is fourteen (14) days (or,
if the Letter of Credit is confirmed by a
confirmer or otherwise provides for
one or more nominated persons, forty-five
(45) days) prior to the Maturity Date.
Subject to clause (b) above, each Letter of
Credit shall expire (without giving
effect to any extension thereof by reason
of an interruption of business) at or
prior to the close of business 365 days, in
the case of standby Letters of
Credit, or 180 days, in the case of
documentary Letters of Credit, after the
date of the issuance of such Letter of
Credit (or, in the case of any renewal or
extension thereof, 365 days or 180 days, as
applicable, after such renewal
or extension) provided that the Issuing
Lender may, in its sole and absolute
discretion, agree to issue any such standby
Letter of Credit providing for
automatic extensions thereof to a date not
later than 365 days beyond its
current expiration date; provided that any
such automatic extension Letter of
Credit must permit the Issuing Lender to
prevent any such extension at least
once in each twelve-month period
(commencing with the date of issuance of such
Letter of Credit) by giving prior notice to
the beneficiary thereof not later
than a day in each such twelve-month period
to be agreed upon at the time such
Letter of Credit is issued. Each Letter of Credit so issued,
extended or
renewed shall be subject to the Uniform
Customs and Practice for Documentary
Credits (1993 Revision), International
Chamber of Commerce Publication No. 500
or any successor version thereto adopted by
the Issuing Lender in the ordinary
course of its business as a letter of
credit issuer and in effect at the time of
issuance of such Letter of Credit (the
Uniform Customs) or, in the case of a
standby Letter of Credit, either the
Uniform Customs or the International
Standby Practices (ISP98), International
Chamber of Commerce Publication No.
590, or any successor code of standby
letter of credit practices among banks
adopted by the Issuing Lender in the
ordinary course of its business as a
standby letter of credit issuer and in
effect at the time of issuance of such
Letter of Credit.
4.1.4. Reimbursement Obligations of Lenders. Each Lender severally
agrees that it shall be absolutely liable,
without regard to the occurrence of
any Default or Event of Default or any
other condition precedent whatsoever, to
the extent of such Lenders Commitment
Percentage, to reimburse the
Administrative Agent on demand for the
amount of each draft paid by the Issuing
Lender under each Letter of Credit to the
extent that such amount is not
reimbursed by the Borrower pursuant to 4.2
(such agreement for a Lender being
called herein the Letter of Credit
Participation of such Lender).
4.1.5. Participations of Lenders. Each such payment made by a
Lender
shall, unless the applicable Reimbursement
Obligation has been otherwise funded
as a Revolving Credit Loan bearing interest
at the Base Rate pursuant to 4.2, be
treated as the purchase by such Lender of a
participating interest in the
Borrowers Reimbursement Obligation under
4.2 in an amount equal to such payment.
To that extent, each Lender shall share in
accordance with its participating
interest in any interest which accrues
pursuant to 4.2.
4.2. Reimbursement Obligation of the Borrower. In order to induce the
Administrative Agent to cause the Issuing
Lender to issue, extend and renew each
Letter of Credit and the Lenders to
participate therein, the Borrower hereby
agrees to reimburse or pay to the
Administrative Agent, for the account of the
Administrative Agent and/or the Issuing
Lender or (as the case may be) the
Lenders, with respect to each Letter of
Credit issued, extended or renewed by
the Issuing Lender hereunder,
(a)
except as otherwise expressly provided in 4.2(b) and (c), on
each
date that any draft presented under such
Letter of Credit is honored by the
Issuing Lender, or the Issuing Lender or
the Administrative Agent otherwise
makes a payment with respect thereto, (i)
the amount paid by the Issuing Lender
or the Administrative Agent under or with
respect to such Letter of Credit, and
(ii) the amount of any taxes, fees, charges
or other costs and expenses
whatsoever incurred by the Issuing Lender
or Administrative Agent or any Lender
in connection with any payment made by the
Issuing Lender, Administrative Agent
or any Lender under, or with respect to,
such Letter of Credit; provided that,
subject to the conditions to borrowing set
forth herein, payment of each
Reimbursement Obligation by the Borrower
under this 4.2(a) shall be made through
the automatic funding of a Revolving Credit
Loan bearing interest at the Base
Rate applicable to Revolving Credit Loans
in an amount equal to the amount of
such Reimbursement Obligation, and the
Borrower hereby irrevocably authorizes
and directs the Administrative Agent and
Issuing Lender to take such actions as
may be necessary to effectuate such
automatic funding of any such Base Rate
Loans,
(b)
upon the reduction (but not termination) of the Total Commitment
to
an amount less than the Maximum Drawing
Amount, an amount equal to such
difference, which amount shall be held by
the Administrative Agent for the
benefit of the Lenders and the
Administrative Agent as cash collateral for all
Reimbursement Obligations, and
(c)
upon the termination of the Total Commitment, or the acceleration
of
the Reimbursement Obligations with respect
to all Letters of Credit in
accordance with 12, an amount equal to the
then Maximum Drawing Amount, which
amount shall be held by the Administrative
Agent for the benefit of the Lenders
and the Administrative Agent as cash
collateral for all Reimbursement
Obligations. Each such payment shall be
made to the Administrative Agent at the
Administrative Agents Office in immediately
available funds.
Interest on any
and all amounts remaining unpaid by the
Borrower under this 4.2 at any time from
the date such amounts become due and
payable (whether as stated in this 4.2, by
acceleration or otherwise) until payment in
full (whether before or after
judgment) shall be payable to the
Administrative Agent on demand at the Default
Rate.
4.3. Letter of Credit Payments. If any draft shall be presented
or
other demand for payment shall be made
under any Letter of Credit, the
Administrative Agent shall notify the
Borrower of the date and amount of the
draft presented or demand for payment and
of the date and time when it expects
to pay such draft or honor such demand for
payment. If the
Borrower fails to
reimburse the Administrative Agent as
provided in 4.2 on or before the date that
such draft is paid or other payment is made
by the Issuing Lender or the
Administrative Agent or, as a result of the
applicable borrowing limits
described therein being exceeded such
Reimbursement Obligations are not
satisfied by the making of a Revolving
Credit Loan bearing interest at the Base
Rate, the Administrative Agent may at any
time thereafter notify the Lenders of
the amount of any such Unpaid Reimbursement
Obligation. No later
than 2:00 p.m.
(Boston time) on the Business Day next
following the receipt of such notice,
each such Lender shall make available to
the Administrative Agent, at the
Administrative Agents Office, in
immediately available funds, such Lenders
Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an
amount equal to the product of (a) the
average, computed for the period referred
to in clause (c) below, of the weighted
average interest rate paid by the
Administrative Agent for federal funds
acquired by the Administrative Agent
during each day included
