AMENDED AND RESTATED CREDIT AGREEMENT Among PROTECTION ONE, INC., PROTECTION ONE ALARM MONITORING, INC., as Borrower, the Several Lenders From Time to Time Parties Hereto, LASALLE BANK NATIONAL ASSOCIATION, as Syndication Agent in Connection With the …

Exhibit 10.1

 

EXECUTION COPY

 

$325,000,000

 

 

among

 

PROTECTIONONE, INC.,

 

PROTECTION ONEALARM MONITORING, INC.,

 

as Borrower,

 

The SeveralLenders

 

from Time toTime Parties Hereto,

 

LASALLE BANKNATIONAL ASSOCIATION,

 

as SyndicationAgent in connection with the Amendment and Restatement,

 

LEHMANCOMMERCIAL PAPER INC.,

 

as InitialSyndication Agent,

 

HARRIS NESBITTFINANCING, INC., LASALLE BANK NATIONAL ASSOCIATION and
U.S. BANK NATIONAL ASSOCIATION,

 

asCo-Documentation Agents,

 

and

 

BEAR STEARNSCORPORATE LENDING INC.,

 

asAdministrative Agent

 

Dated as ofApril 26, 2006

 

 

BEAR, STEARNS & CO. INC.,

as Sole Lead Arranger and Sole Bookrunner

in connection with the Amendment and Restatement

 

BEAR, STEARNS & CO. INC. and LEHMAN BROTHERS INC.,

as Initial Joint Lead Arrangers and Initial Joint Bookrunners

 



 

TABLE OF CONTENTS

 

 

Page

 

 

SECTION 1. DEFINITIONS

2

 

 

 

1.1.

Defined Terms

2

1.2.

Other Definitional Provisions

29

 

 

 

SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS

29

 

 

 

2.1.

Term Commitments

29

2.2.

Procedure for Term Loan Borrowing

30

2.3.

Repayment of Term Loans

30

 

 

 

SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS

31

 

 

 

3.1.

Revolving Commitments

31

3.2.

Procedure for Revolving Loan Borrowing

31

3.3.

Swingline Commitment

32

3.4.

Procedure for Swingline Borrowing; Refunding of Swingline Loans

32

3.5.

Commitment Fees, etc.

34

3.6.

Termination or Reduction of Revolving Commitments

34

3.7.

L/C Commitment

34

3.8.

Procedure for Issuance of Letter of Credit

35

3.9.

Fees and Other Charges

35

3.10.

L/C Participations

35

3.11.

Reimbursement Obligation of the Borrower

36

3.12.

Obligations Absolute

37

3.13.

Letter of Credit Payments

37

3.14.

Applications

38

 

 

 

SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

38

 

 

 

4.1.

Optional Prepayments

38

4.2.

Mandatory Prepayments and Commitment Reductions

38

4.3.

Conversion and Continuation Options

40

4.4.

Limitations on Eurodollar Tranches

40

4.5.

Interest Rates and Payment Dates

41

4.6.

Computation of Interest and Fees

41

4.7.

Inability to Determine Interest Rate

42

4.8.

Pro Rata Treatment and Payments

42

4.9.

Requirements of Law

43

4.10.

Taxes

45

4.11.

Indemnity

47

 



 

4.12.

Change of Lending Office

48

4.13.

Replacement of Lenders

48

4.14.

Evidence of Debt

49

4.15.

Illegality

49

 

 

 

SECTION 5. REPRESENTATIONS AND WARRANTIES

49

 

 

 

5.1.

Financial Condition

50

5.2.

No Change

50

5.3.

Corporate Existence; Compliance with Law

50

5.4.

Power; Authorization; Enforceable Obligations

50

5.5.

No Legal Bar

51

5.6.

Litigation

51

5.7.

No Default

51

5.8.

Ownership of Property; Liens

51

5.9.

Intellectual Property

51

5.10.

Taxes

52

5.11.

Federal Regulations

52

5.12.

Labor Matters

52

5.13.

ERISA

52

5.14.

Investment Company Act; Other Regulations

53

5.15.

Subsidiaries

53

5.16.

Use of Proceeds

53

5.17.

Environmental Matters

53

5.18.

Accuracy of Information, etc.

54

5.19.

Security Documents

54

5.20.

Solvency

55

5.21.

Designated Senior Debt

56

5.22.

Regulation H

56

 

 

 

SECTION 6. CONDITIONS PRECEDENT

56

 

 

 

6.1.

Conditions to Restatement Date

56

6.2.

Conditions to Each Extension of Credit

60

 

 

 

SECTION 7. AFFIRMATIVE COVENANTS

61

 

 

 

7.1.

Financial Statements

61

7.2.

Certificates; Other Information

61

7.3.

Payment of Obligations

63

7.4.

Maintenance of Existence; Compliance

63

7.5.

Maintenance of Property; Insurance

63

7.6.

Inspection of Property; Books and Records; Discussions

63

7.7.

Notices

63

7.8.

Environmental Laws

64

7.9.

Interest Rate Protection

64

7.10.

Additional Collateral, etc.

65

 



 

7.11.

Further Assurances

66

 

 

 

SECTION 8. NEGATIVE COVENANTS

67

 

 

 

8.1.

Financial Condition Covenants

67

8.2.

Indebtedness

69

8.3.

Liens

71

8.4.

Fundamental Changes

72

8.5.

Disposition of Property

73

8.6.

Restricted Payments

74

8.7.

Capital Expenditures; Net Cash Investment Costs

75

8.8.

Investments

76

8.9.

Optional Payments and Modifications of Certain Debt Instruments

77

8.10.

Transactions with Affiliates

77

8.11.

Sales and Leasebacks

78

8.12.

Hedge Agreements

78

8.13.

Changes in Fiscal Periods

78

8.14.

Negative Pledge Clauses

78

8.15.

Clauses Restricting Subsidiary Distributions

79

8.16.

Lines of Business

79

8.17.

Limitations on the Activities of Holdings

79

 

 

 

SECTION 9. EVENTS OF DEFAULT

80

 

 

 

SECTION 10. THE AGENTS

83

 

 

 

10.1.

Appointment

83

10.2.

Delegation of Duties

83

10.3.

Exculpatory Provisions

84

10.4.

Reliance by Agents

84

10.5.

Notice of Default

84

10.6.

Non-Reliance on Agents and Other Lenders

85

10.7.

Indemnification

85

10.8.

Agent in Its Individual Capacity

86

10.9.

Successor Administrative Agent

86

10.10.

Agents Generally

86

10.11.

The Lead Arrangers

87

10.12.

Withholding Tax

87

10.13.

Intercreditor Agreement

87

 

 

 

SECTION 11. MISCELLANEOUS

87

 

 

 

11.1.

Amendments and Waivers

87

11.2.

Notices

89

11.3.

No Waiver; Cumulative Remedies

90

11.4.

Survival of Representations and Warranties

90

11.5.

Payment of Expenses and Taxes

90

 



 

11.6.

Successors and Assigns; Participations and Assignments

92

11.7.

Adjustments; Set-off

95

11.8.

Counterparts

95

11.9.

Severability

96

11.10.

Integration

96

11.11.

GOVERNING LAW

96

11.12.

Submission To Jurisdiction; Waivers

96

11.13.

Acknowledgments

97

11.14.

Releases of Guarantees and Liens

97

11.15.

Confidentiality

97

11.16.

WAIVERS OF JURY TRIAL

98

11.17.

Delivery of Addenda

98

11.18.

Subordination of Intercompany Indebtedness

98

11.19.

USA PATRIOT Act

98

11.20.

Amendment and Restatement

98

 

ANNEX:

 

 

 

 

 

A

Pricing Grid

 

 

 

 

SCHEDULES:

 

 

 

 

 

1.1(a)

Allotted Dispositions

 

1.1(b)

Mortgaged Intellectual Property

 

1.1(c)

Mortgaged Real Property

 

5.4

Consents, Authorizations, Filings and Notices

 

5.15

Subsidiaries

 

5.19(a)

UCC Filing Jurisdictions

 

5.19(b)

Mortgage Filing Jurisdictions

 

8.8

Closing Date Investments

 

 

 

 

EXHIBITS:

 

 

 

 

 

A

Form of Compliance Certificate

 

B

Form of Restatement Date Certificate

 

C

Form of Amended Mortgage

 

D

Form of Assignment and Assumption

 

E

Form of Legal Opinion of Kirkland & Ellis LLP

 

F

Form of Reinvestment Notice

 

G

Form of Exemption Certificate

 

H-1

Form of Term Note

 

H-2

Form of Revolving Note

 

H-3

Form Swingline Note

 

I

Form of Addendum

 

 



 

J

Form of Subordinated Intercompany Note

 

K

Form of Solvency Certificate

 

L

Form of Financial Status Certificate

 

M

Form of Reaffirmation Agreement

 

N

Form of Intercreditor Agreement

 

 



 

, datedas of April 26, 2006, among PROTECTION ONE, INC., a Delaware corporation (“Holdings”),PROTECTION ONE ALARM MONITORING, INC., a Delaware corporation (the “Borrower”),the several banks and other financial institutions or entities from time totime parties to this Agreement (the “Lenders”), BEAR, STEARNS & CO.INC. (“Bear Stearns”), as sole lead arranger and sole bookrunner inconnection with the Amendment and Restatement (in such capacity, the “LeadArranger”), Bear Stearns and LEHMAN BROTHERS INC. (“Lehman Brothers”),as initial joint lead arrangers and initial joint bookrunners (in suchcapacity, collectively, the “Initial Lead Arrangers”), LASALLE BANKNATIONAL ASSOCIATION (“LaSalle”), as syndication agent in connectionwith the Amendment and Restatement (in such capacity, and together with itssuccessors in such capacity, the “Syndication Agent”), LEHMAN COMMERCIALPAPER INC. (“LCP”), as initial syndication agent (in such capacity, the“Initial Syndication Agent”), HARRIS NESBITT FINANCING, INC. (“HarrisNesbitt”), LaSalle and U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”),as co-documentation agents (in such capacity, and together with their respectivesuccessors in such capacity, the “Co-Documentation Agents”), and BEARSTEARNS CORPORATE LENDING INC. (“BSCL”), as administrative agent (insuch capacity, and together with its successors in such capacity, the “AdministrativeAgent”).

 

RECITALS:

 

WHEREAS,capitalized terms used in these Recitals shall have the respective meanings setforth for such terms in Section 1.1 hereof;

 

WHEREAS,the Borrower, Holdings, certain banks and other financial institutions (the “ExistingLenders”), Bear Stearns and Lehman Brothers, as Initial Lead Arrangers,LCP, as Initial Syndication Agent, Harris Nesbitt, LaSalle and U.S. Bank, asCo-Documentation Agents, and BSCL as Administrative Agent, are parties to thatcertain Credit Agreement dated as of April 18, 2005 (the “Original CreditAgreement”), pursuant to which the Existing Lenders extended certain seniorcredit facilities to the Borrower;

 

WHEREAS, the Borrowerdesires that certain of the Existing Lenders and other parties hereto agree toamend and restate the Original Credit Agreement in its entirety to:  (i) establish new Term Loans to be madehereunder; and (ii) make certain other changes as more fully set forth herein,which amendment and restatement shall become effective upon the RestatementDate;

 

WHEREAS, the RequiredLenders have, on or prior to the Restatement Date, authorized theAdministrative Agent to execute this Agreement on behalf of all ExistingLenders;

 

WHEREAS, the MajorityFacility Lenders under the Revolving Facility have, on or prior to the RestatementDate, authorized the Administrative Agent to execute this Agreement on behalfof all Revolving Lenders; and

 

WHEREAS, the Term Lenders party hereto haveagreed to make new Term Loans hereunder in an amount up to their respectiveTerm Commitments in accordance with

 

1



 

Section 2.1 herein, theproceeds of which shall be used to repay in full the Existing Term Loans on theRestatement Date, to make cash dividends to equityholders as contemplated bySection 5.16 herein and to pay special management bonuses in connection withsuch cash dividends.

 

NOW,THEREFORE, in consideration of the premises and the agreements,provisions and covenants herein contained, the parties hereto agree as follows:

 

SECTION 1.  DEFINITIONS

 

1.1.          Defined Terms.  As used in this Agreement, the terms listedin this Section 1.1 shall have the respective meanings set forth in thisSection 1.1.

 

“Acquired Entity”:  as defined in the definition of “PermittedAcquisition”.

 

“Addendum:”  an instrument, substantially in the form ofExhibit I, by which a Lender becomes a party to this Agreement as of theRestatement Date.

 

“Adjustment Date”:  as defined in the Pricing Grid.

 

“Administrative Agent”:  as defined in the preamble to this Agreement.

 

“Affiliate”:  as to any Person, any other Person that,directly or indirectly, is in control of, is controlled by, or is under commoncontrol with, such Person.  For purposesof this definition, “control” of a Person means the power, directly or indirectly,either to (a) vote 10% or more of the securities having ordinary voting powerfor the election of directors (or persons performing similar functions) of suchPerson or (b) direct or cause the direction of the management and policies ofsuch Person, whether by contract or otherwise.

 

“Agents”:  the collective reference to the SyndicationAgent, the Initial Syndication Agent, the Co-Documentation Agents, the LeadArranger, the Initial Lead Arrangers and the Administrative Agent, which termshall include, for purposes of Section 10 only, the Issuing Lender.

 

“Aggregate Exposure”:  with respect to any Lender at any time, anamount equal to (a) until the Restatement Date, the aggregate amount ofsuch Lender’s Commitments at such time and (b) thereafter, the sum of (i)the aggregate then unpaid principal amount of such Lender’s Term Loans and (ii)the amount of such Lender’s Revolving Commitment then in effect or, if theRevolving Commitments have been terminated, the amount of such Lender’sRevolving Extensions of Credit then outstanding.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, theratio (expressed as a percentage) of such Lender’s Aggregate Exposure at suchtime to the Aggregate Exposure of all Lenders at such time.

 

“Agreement”:  this .

 

2



 

“Allotted Dispositions”:  (a) prior to the first anniversary of theClosing Date, the Disposition of those customer contracts or alarm monitoringoperations that are described on Schedule 1.1(a); and (b) during each yearthereafter, Dispositions of customer contracts or alarm monitoring operationsfor cash proceeds not to exceed $25,000,000 in any one fiscal year; providedthat no more than $50,000,000 of Allotted Dispositions pursuant to this clause(b) shall be permitted in the aggregate.

 

“Applicable Margin”:  for each Type of Loan, the rate per annum setforth under the relevant column heading below:

 

 

 

Eurodollar Loans

 

Base Rate Loans

 

Revolving Loans and Swingline Loans

 

3.25

%

2.25

%

Term Loans

 

2.50

%

1.50

%

 

provided,that, on and after the first Adjustment Date (as defined in the Pricing Grid)occurring after the completion of two full fiscal quarters of the Borrowerafter the Closing Date, the Applicable Margin with respect to Revolving Loansand Swingline Loans will be determined pursuant to the Pricing Grid.

 

“Application”:  an application, in such form as the IssuingLender may specify from time to time, requesting the Issuing Lender to open aLetter of Credit.

 

“Approved Fund”:  (a) a CLO and (b) with respect to any Lenderthat is a fund which invests in commercial loans, any other fund that investsin commercial loans and is managed or advised by the same investment advisor assuch Lender or by an Affiliate of such investment advisor.

 

“Asset Sale”:  any Disposition of Property or series ofrelated Dispositions of Property (excluding any such Disposition permitted bySection 8.5) that yields gross proceeds to any Group Member (valued at theinitial principal amount thereof in the case of non-cash proceeds consisting ofnotes or other debt securities and valued at fair market value in the case ofother non-cash proceeds) in excess of $500,000.

 

“Assignee”:  as defined in Section 11.6(b).

 

“Assignment and Assumption”:  an Assignment and Assumption, substantiallyin the form of Exhibit D.

 

“Available Revolving Commitment”:  as to any Revolving Lender at any time, anamount equal to the excess, if any, of (a) such Lender’s Revolving Commitmentthen in effect minus (b) such Lender’s Revolving Extensions of Creditthen outstanding; provided that, in calculating any Lender’s RevolvingExtensions of Credit for the purpose of determining such Lender’s AvailableRevolving Commitment pursuant to Section 3.5, the aggregate principal amount ofSwingline Loans then outstanding shall be deemed to be zero.

 

3



 

“Base Rate”:  for any day, a rate per annum (roundedupwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) thePrime Rate in effect on such day and (b) the Federal Funds Effective Rate ineffect on such day plus 0.50%.  Forpurposes hereof:  “Prime Rate”shall mean the rate of interest per annum publicly announced from time to timeby the Reference Bank as its prime rate in effect at its principal office inNew York City (the Prime Rate not being intended to be the lowest rate ofinterest charged by the Reference Bank in connection with extensions of creditto debtors).  Any change in the Base Ratedue to a change in the Prime Rate or the Federal Funds Effective Rate shall beeffective as of the opening of business on the effective day of such change inthe Prime Rate or the Federal Funds Effective Rate, respectively.

 

“Base Rate Loans”:  Loans the rate of interest applicable towhich is based upon the Base Rate.

 

“Benefited Lender”:  as defined in Section 11.7(a).

 

“Board”:  the Board of Governors of the Federal ReserveSystem of the United States (or any successor).

 

“Borrower”: as defined in the preamble to this Agreement.

 

“Borrowing Date”:  any Business Day specified by the Borrower asa date on which the Borrower requests the relevant Lenders to make Loanshereunder.

 

“Business”:  as defined in Section 5.17(b).

 

“Business Day”:  a day other than a Saturday, Sunday or otherday on which commercial banks in New York City are authorized or required bylaw to close, provided, that with respect to notices and determinationsin connection with, and payments of principal and interest on, EurodollarLoans, such day is also a day for trading by and between banks in Dollardeposits in the interbank eurodollar market.

 

“Capital Expenditures”:  for any period, with respect to any Person,the aggregate of all expenditures by such Person and its Subsidiaries for theacquisition or leasing (pursuant to a capital lease) of fixed or capital assetsor additions to equipment (including replacements, capitalized repairs andimprovements during such period) that should be capitalized under GAAP on a consolidatedbalance sheet of such Person and its Subsidiaries; provided, thatCapital Expenditures shall not include expenditures included in the definitionof Net Cash Investment Costs.

 

 “CapitalLease Obligations”:  as to anyPerson, the obligations of such Person to pay rent or other amounts under anylease of (or other arrangement conveying the right to use) real or personalproperty, or a combination thereof, which obligations are required to beclassified and accounted for as capital leases on a balance sheet of suchPerson under GAAP and, for the purposes of this Agreement, the amount of suchobligations at any time shall be the capitalized amount thereof at such timedetermined in accordance with GAAP.

 

4



 

“Capital Stock”:  any and all shares, interests, participationsor other equivalents (however designated) of capital stock of a corporation,any and all equivalent ownership interests in a Person (other than acorporation) and any and all warrants, rights or options to purchase any of theforegoing.

 

“Cash Equivalents”:  (a) marketable direct obligations issued by,or unconditionally guaranteed by, the United States government or issued by anyagency thereof and backed by the full faith and credit of the United States, ineach case maturing within one year from the date of acquisition;(b) certificates of deposit, time deposits, eurodollar time deposits orovernight bank deposits having maturities of twelve months or less from thedate of acquisition issued by any Lender or by any commercial bank organizedunder the laws of the United States or any state thereof having combinedcapital and surplus of not less than $500,000,000; (c) commercial paper of anissuer rated at least A-2 by Standard & Poor’s Ratings Services (“S&P”)or P-2 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying anequivalent rating by a nationally recognized rating agency, if both of the twonamed rating agencies cease publishing ratings of commercial paper issuersgenerally, and maturing within twelve months from the date of acquisition; (d)repurchase obligations of any Lender or of any commercial bank satisfying therequirements of clause (b) of this definition or of a recognized securitiesdealer having combined capital and surplus of not less than $500,000,000,having a term of not more than 30 days, with respect to securities issued orfully guaranteed or insured by the United States government; (e) securitieswith maturities of one year or less from the date of acquisition issued orfully guaranteed by any state, commonwealth or territory of the United States,by any political subdivision or taxing authority of any such state,commonwealth or territory or by any foreign government, the securities of whichstate, commonwealth, territory, political subdivision, taxing authority orforeign government (as the case may be) are rated at least A by S&P or A byMoody’s; (f) securities with maturities of six months or less from the date ofacquisition backed by standby letters of credit issued by any Lender or anycommercial bank satisfying the requirements of clause (b) of this definition;or (g) shares of money market mutual or similar funds which invest exclusivelyin assets satisfying the requirements of clauses (a) through (f) of thisdefinition or money market funds that (i) comply with the criteria set forth inSecurities and Exchange Commission Rule 2a-7 under the Investment Company Actof 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii)have portfolio assets of at least $5,000,000,000.

 

“CLO”: any entity (whether acorporation, partnership, trust or otherwise) that is engaged in making,purchasing, holding or otherwise investing in bank loans and similar extensionsof credit in the ordinary course of its business and is administered or managedby a Lender or an Affiliate of such Lender.

 

“Closing Date”:  April 18, 2005.

 

“Code”:  the Internal Revenue Code of 1986, as amendedfrom time to time.

 

“Co-Documentation Agents”:  as defined in the preamble to this Agreement.

 

5



 

“Collateral”:  all property of the Loan Parties, now ownedor hereafter acquired, upon which a Lien is purported to be created by anySecurity Document.

 

“Commitment”:  as to any Lender, the sum of the TermCommitment and the Revolving Commitment of such Lender.

 

“Commitment Fee Rate”:  0.50% per annum.

 

“Commonly Controlled Entity”:  an entity, whether or not incorporated, thatis under common control with the Borrower within the meaning of Section 4001 ofERISA or is part of a group that includes the Borrower and that is treated as asingle employer under Section 414 of the Code.

 

“Compliance Certificate”:  a certificate duly executed by a ResponsibleOfficer substantially in the form of Exhibit A.

 

“Conduit Lender”:  any special purpose entity organized andadministered by any Lender for the purpose of making Loans otherwise requiredto be made by such Lender and designated by such Lender in a writteninstrument, subject to the consent of the Administrative Agent and the Borrower(which consent shall not be unreasonably withheld); provided, that thedesignation by any Lender of a Conduit Lender shall not relieve the designatingLender of any of its obligations to fund a Loan under this Agreement if, forany reason, its Conduit Lender fails to fund any such Loan, and the designatingLender (and not the Conduit Lender) shall have the sole right andresponsibility to deliver all consents and waivers required or requested underthis Agreement with respect to its Conduit Lender, and provided, further,that no Conduit Lender shall (a) be entitled to receive any greater amountpursuant to Section 4.9, 4.10, 4.11 or 11.5 than the designating Lender wouldhave been entitled to receive in respect of the extensions of credit made bysuch Conduit Lender or (b) be deemed to have any Commitment.

 

“Confidential Information Memorandum”:  the Confidential Information Memorandum datedMarch 2005 and furnished to the Lenders.

 

“Consolidated Current Assets”:  at any date, all amounts (other than cash andCash Equivalents) that would, in conformity with GAAP, be set forth oppositethe caption “total current assets” (or any like caption) on a consolidatedbalance sheet of Holdings and its Subsidiaries at such date.

 

“Consolidated Current Liabilities”:  at any date, all amounts that would, inconformity with GAAP, be set forth opposite the caption “total currentliabilities” (or any like caption) on a consolidated balance sheet of Holdingsand its Subsidiaries at such date, but excluding (a) the current portion of anyFunded Debt of Holdings and its Subsidiaries and (b) without duplication ofclause (a) above, all Indebtedness consisting of Revolving Loans or SwinglineLoans to the extent otherwise included therein.

 

“Consolidated EBITDA”:  for any period, Consolidated Net Income forsuch period

 

6



 

plus,without duplication and to the extent reflected as a charge in the statement ofsuch Consolidated Net Income for such period (except in the case of (i) below),the sum of:

 

 (a)income tax expense (including, without duplication, franchise and foreignwithholding taxes and any state single business unitary or similar tax, to theextent classified as income tax expense on the consolidated income statement ofHoldings and its Subsidiaries in accordance with GAAP),

 

(b) interest expense, amortization orwrite-off of debt discount and debt issuance costs and commissions, discountsand other fees and charges associated with Indebtedness (including the Loans),

 

(c) depreciation and amortization expense,

 

(d) amortization of intangibles (including,but not limited to, goodwill), deferred customer acquisition costs andorganization costs,

 

(e) any extraordinary charges, expenses orlosses determined in accordance with GAAP,

 

(f) non-cash compensation expenses arisingfrom the issuance, vesting or exercise of stock, options to purchase stock,stock appreciation rights and other equity awards to the management, directors,officers, consultants and other employees of Holdings or any of itsSubsidiaries,

 

(g) any other noncash charges, noncashexpenses or noncash losses of the Borrower or any of its Subsidiaries for suchperiod (excluding any such charge, expense or loss incurred in the ordinarycourse of business that constitutes an accrual of or a reserve for cash chargesfor any future period); provided, however, that cash paymentsmade in such period or in any future period in respect of such noncash charges,expenses or losses incurred after the Closing Date (excluding any such charge,expense or loss incurred in the ordinary course of business that constitutes anaccrual of or a reserve for cash charges for any future period) shall besubtracted from Consolidated Net Income in calculating Consolidated EBITDA inthe period when such payments are made,

 

(h) all reasonable one-time costs, fees,expenses and charges related to this refinancing and the dividend tostockholders contemplated by Section 5.16 hereof, any permitted Investment,Permitted Acquisition, issuance of equity, recapitalization, reorganization orasset disposition,

 

(i) cash proceeds of business interruptioninsurance,

 

(j) management and transaction fees andrelated expenses paid under the Management Agreement substantially in the formmost recently delivered to the Administrative Agent prior to the Closing Date,and without further modification thereto as to amounts payable thereunder,

 

7



 

(k) any non-recurring charges, expenses orlosses not exceeding, together with expenses under clause (l), $1.75 million ineach of calendar years 2005 and 2006, and $1.0 million in each calendar yearthereafter,

 

(l) expenses incurred in work forcereductions such as severance, key employee retention plans, and unfavorablelease payments or accruals for such payments not exceeding, together withamounts under clause (k), $1.75 million in each of calendar years 2005 and2006, and $1.0 million in each calendar year thereafter, and

 

(m) bonuses paid to members of management ofthe Borrower or Holdings pursuant to Section 8.6(e),

 

minus,to the extent included in the statement of such Consolidated Net Income forsuch period, the sum of:

 

(i) interest income,

 

(ii) any extraordinary income or gains determinedin accordance with GAAP, and

 

(iii) any other non-cash income (excluding(x) any items that represent the reversal of any accrual of, or cash reservefor, anticipated cash charges in any prior period that are described in theparenthetical to clause (g) above and (y) items representing ordinary courseaccruals of cash to be received in future periods), all as determined on aconsolidated basis.

 

For the purposes of calculating ConsolidatedEBITDA for any period of four consecutive fiscal quarters (each, a “ReferencePeriod”) pursuant to any determination of the Consolidated Leverage Ratio,(i) if at any time during such Reference Period the Borrower or any Subsidiaryshall have made any Material Disposition, the Consolidated EBITDA for suchReference Period shall be reduced by an amount equal to the Consolidated EBITDA(if positive) attributable to the property that is the subject of such MaterialDisposition for such Reference Period or increased by an amount equal to theConsolidated EBITDA (if negative) attributable thereto for such ReferencePeriod and (ii) if during such Reference Period the Borrower or any Subsidiaryshall have made a Material Acquisition, Consolidated EBITDA for such ReferencePeriod shall be calculated after giving pro forma effect theretoas if such Material Acquisition occurred on the first day of such ReferencePeriod.  As used in this definition, “MaterialAcquisition” means any acquisition of property or series of relatedacquisitions of property that (a) constitutes assets comprising all orsubstantially all of an operating unit of a business or constitutes all orsubstantially all of the common stock of a Person and (b) involves the paymentof consideration by the Borrower and its Subsidiaries in excess of $5,000,000;and “Material Disposition” means any Disposition of property or series ofrelated Dispositions of property that yields gross proceeds to the Borrower orany of its Subsidiaries in excess of $5,000,000.

 

“Consolidated Interest Coverage Ratio”:  for any period, the ratio of (a) ConsolidatedEBITDA for such period to (b) Consolidated Interest Expense for such period.

 

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“Consolidated Interest Expense”:  for any period, total cash interest expense(including that attributable to Capital Lease Obligations) of Holdings and itsSubsidiaries for such period with respect to all outstanding Indebtedness ofHoldings and its Subsidiaries (including all commissions, discounts and otherfees and charges owed with respect to letters of credit and bankers’ acceptancefinancing and net costs under Hedge Agreements in respect of interest rates tothe extent such net costs are allocable to such period in accordance withGAAP).

 

“Consolidated Leverage Ratio”:  as of the last day of any period, the ratioof (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA forsuch period.

 

“Consolidated Net Income”:  for any period, the consolidated net income(or loss) of Holdings and its Subsidiaries, determined on a consolidated basisin accordance with GAAP; provided that there shall be excluded (a) theincome (or deficit) of any Person accrued prior to the date it becomes aSubsidiary of the Borrower or is merged into or consolidated with the Borroweror any of its Subsidiaries, (b) the income (or deficit) of any Person (otherthan a Subsidiary of the Borrower) in which the Borrower or any of itsSubsidiaries has an ownership interest, except to the extent that any suchincome is actually received by the Borrower or such Subsidiary in the form ofdividends or similar distributions and (c) the undistributed earnings of anySubsidiary of the Borrower to the extent that the declaration or payment ofdividends or similar distributions by such Subsidiary is not at the timepermitted by the terms of any Contractual Obligation (other than under any LoanDocument) or Requirement of Law applicable to such Subsidiary.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amountof all Indebtedness of Holdings and its Subsidiaries at such date, determinedon a consolidated basis in accordance with GAAP.

 

“Consolidated Working Capital”:  at any date, the difference of ConsolidatedCurrent Assets on such date minus Consolidated Current Liabilities onsuch date.

 

“Continuing Directors”:  the directors of Holdings on the ClosingDate, after giving effect to the transactions contemplated hereby, and eachother director, if, in each case, such other director’s nomination for electionto the board of directors of Holdings is recommended by at least a majority ofthe then Continuing Directors or such other director receives the vote of thePermitted Investors in his or her election by the shareholders of Holdings.

 

“Continuing Lenders”:  a term loan lender under the Original CreditAgreement that has delivered a signature page hereto indicating agreement tocontinue as a Lender under this Agreement.

 

“Contractual Obligation”:  as to any Person, any provision of anysecurity issued by such Person or of any agreement, instrument or otherundertaking to which such Person is a party or by which it or any of itsproperty is bound.

 

9



 

“Control Investment Affiliate”:  as to any Person, any other Person that (a)directly or indirectly, is in control of, is controlled by, or is under commoncontrol with, such Person and (b) is organized by such Person primarily for thepurpose of making equity or debt investments in one or more companies.  For purposes of this definition, “control” ofa Person means the power, directly or indirectly, to direct or cause thedirection of the management and policies of such Person whether by contract orotherwise.

 

“Default”:  any of the events specified inSection 9, whether or not any requirement set forth in Section 9 for thegiving of notice, the lapse of time, or both, has been satisfied.

 

“Disposition”:  with respect to any Property, any sale,lease, sale and leaseback, assignment, conveyance, transfer or otherdisposition thereof.  The terms “Dispose”and “Disposed of” shall have correlative meanings.

 

 “Dollars”and “$”:  dollars in lawfulcurrency of the United States.

 

“Domestic Subsidiary”:  any Subsidiary of the Borrower organizedunder the laws of any jurisdiction within the United States.

 

“ECF Percentage”:  with respect to any fiscal year of Holdingsending on or after December 31, 2007, 75%; provided that the ECFPercentage shall be reduced to 50% if the Consolidated Leverage Ratio as of thelast day of such fiscal year is less than 3.0 to 1.0, and the ECF Percentageshall be further reduced to 25% if the Consolidated Leverage Ratio as of thelast day of such fiscal year is less than 2.0 to 1.0.

 

“Eligible Assignee” : (a) a commercialbank organized under the laws of the United States, or any state thereof, andhaving a combined capital and surplus of at least $100,000,000; (b) acommercial bank organized under the laws of any other country that is a memberof the Organization for Economic Cooperation and Development (the “OECD”), or apolitical subdivision of any such country, and having a combined capital andsurplus in a dollar equivalent amount of at least $100,000,000; provided,however, that such bank is acting through a branch or agency located inthe country in which it is organized or another country that is also a memberof the OECD; (c) an insurance company, mutual fund or other entity which isregularly engaged in making, purchasing or investing in loans or securities, orany other financial institution organized under the laws of the United States,any state thereof, any other country that is a member of the OECD or apolitical subdivision of any such country with assets, or assets undermanagement, in a dollar equivalent amount of at least $100,000,000; (d) anyAffiliate of a Lender or an Approved Fund of a Lender; (e) any other entity(other than a natural person) which is an “accredited investor” (as defined inRegulation D under the Securities Act) which extends credit or buys loans asone of its businesses or investing activities including, but not limited to,insurance companies, mutual funds and investment funds; (f) any other entity ifat the time of the applicable assignment a Default or Event of Default shall becontinuing and (g) any other entity consented to by the Administrative Agentand the Borrower.

 

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“Environmental Laws”:  any and all applicable foreign, Federal,state, local or municipal laws, rules, orders, regulations, statutes,ordinances, codes, decrees, requirements of any Governmental Authority or otherRequirements of Law (including common law) regulating, relating to or imposingliability or standards of conduct concerning occupational safety and health orprotection of the environment, as now or may at any time hereafter be in effect.

 

“ERISA”:  the Employee Retirement Income Security Actof 1974, as amended from time to time.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan,the aggregate (without duplication) of the maximum rates (expressed as a decimalfraction) of reserve requirements in effect on such day (including basic,supplemental, marginal and emergency reserves under any regulations of theBoard or other Governmental Authority having jurisdiction with respect thereto)dealing with reserve requirements prescribed for eurocurrency funding(currently referred to as “Eurocurrency Liabilities” in Regulation D of theBoard) maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Base Rate”:  with respect to each day during each InterestPeriod pertaining to a Eurodollar Loan, the rate per annum determined on thebasis of the rate for deposits in Dollars for a period equal to such InterestPeriod commencing on the first day of such Interest Period appearing on Page3750 of the Telerate screen as of 11:00 A.M., London time, two Business Daysprior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Teleratescreen (or otherwise on such screen), the “Eurodollar Base Rate” shallbe determined by reference to such other comparable publicly available servicefor displaying eurodollar rates as may be selected by the Administrative Agentor, in the absence of such availability, by reference to the rate at which theAdministrative Agent is offered Dollar deposits at or about 11:00 A.M., NewYork City time, two Business Days prior to the beginning of such InterestPeriod in the interbank eurodollar market where its eurodollar and foreigncurrency and exchange operations are then being conducted for delivery on thefirst day of such Interest Period for the number of days comprised therein.

 

“Eurodollar Loans”:  Loans the rate of interest applicable towhich is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to each day during each InterestPeriod pertaining to a Eurodollar Loan, a rate per annum determined for suchday in accordance with the following formula (rounded upward to the nearest1/100th of 1%):

 

 

Eurodollar Base Rate

 

 

1.00 – Eurocurrency Reserve Requirements

 

 

“Eurodollar Tranche”:  the collective reference to Eurodollar Loansunder a particular Facility the then current Interest Periods with respect toall of which begin on the same date and end on the same later date (whether ornot such Loans shall originally have been made on the same day).

 

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“Event of Default”:  any of the events specified in Section 9, providedthat any requirement specified in Section 9 for the giving of notice, the lapseof time, or both, has been satisfied.

 

“Excess Cash Flow”:  for any fiscal year of Holdings, the excess,if any, of:

 

(a) the sum, without duplication, of:

 

(i)Consolidated Net Income for such fiscal year,

 

(ii) the amount of all non-cash charges deducted in arriving at suchConsolidated Net Income, other than any charges that represent an accrual of areserve for cash charges for any future period,

 

(iii) depreciation and amortization expense,

 

(iv) amortization of intangibles (including, but not limited to,goodwill), deferred customer acquisition costs and organization costs,

 

(v) the increase in long-term liabilities excluding (a) the long-termportion of debt, (b) the long-term portion of Capital Lease Obligations, and(c) deferred customer acquisition revenues for such fiscal year,

 

(vi) the aggregate net amount of non-cash loss on the Disposition ofProperty by Holdings and its Subsidiaries during such fiscal year (other thansales of inventory in the ordinary course of business), to the extent deductedin arriving at such Consolidated Net Income,

 

(v) cash proceeds of business interruption insurance,

 

(vi) the decrease in Consolidated Working Capital for such fiscal year,and

 

(vii) thedecrease in long-term assets excluding (a) property, plant and equipment, (b)purchased accounts, (c) goodwill, (d) intangible assets, (e) debt issuancecosts, and (f) deferred customer acquisition costs for such fiscal year, minus

 

(b)           thesum, without duplication, of:

 

(i) the amount of all non-cash credits included in arriving at such ConsolidatedNet Income,

 

(ii) the amortization of deferred customer acquisition revenue,

 

(iii) the aggregate amount actually paid by Holdings and itsSubsidiaries in cash, and expenditures for which payables have been recordedbut not yet paid, during such fiscal year on account of Capital Expenditures(excluding the principal amount of Indebtedness incurred to finance suchexpenditures (but including repayments of any

 

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such Indebtedness incurring during suchperiod or any prior period) and any such expenditures financed with theproceeds of any Reinvestment Deferred Amount),

 

(iv) the aggregate amount of all regularly scheduled principal paymentsof Funded Debt (including the Term Loans) of Holdings and its Subsidiaries madeduring such fiscal year (other than in respect of Revolving Loans and any otherrevolving credit facility to the extent there is not an equivalent permanentreduction in commitments thereunder),

 

(v) an amount equal to the deferred customer acquisition costs duringsuch fiscal year minus the deferred customer acquisition revenue duringsuch fiscal year,

 

(vi) the increase in Consolidated Working Capital for such fiscal year,

 

(vii) the increase in long-term assets excluding (a) property, plantand equipment, (b) purchased accounts, (c) goodwill, (d) intangible assets, (e)debt issuance costs, and (f) deferred customer acquisition costs for suchfiscal year,

 

(viii) the aggregate net amount of non-cash gain on the Disposition ofProperty by Holdings and its Subsidiaries during such fiscal year (other thansales of inventory in the ordinary course of business), to the extent includedin arriving at such Consolidated Net Income,

 

(ix) all reasonable one-time costs, fees, expenses and charges andone-time payments constituting or related to any permitted Investments,Permitted Acquisitions, or equity issuances to the extent not deducted inarriving at such Consolidated Net Income,

 

(x) management and transaction fees and related expenses paid under theManagement Agreement (substantially in the form most recently delivered to theAdministrative Agent prior to the Closing Date, and without furthermodification thereto as to amounts payable thereunder) to the extent notdeducted in arriving at such Consolidated Net Income,

 

(xi) Restricted Payments made in cash which were permitted to be madeunder this Credit Agreement, and

 

(xii) the decrease in long-term liabilities excluding (a) the long-termportion of debt, (b) the long-term portion of Capital Lease Obligations, and(c) deferred customer acquisition revenues for such fiscal year.

 

To the extent any Person is disregarded fromthe definition of “Consolidated Net Income” pursuant to the proviso thereto inany period, such Person shall be so disregarded from the calculation of ExcessCash Flow hereunder during such period. The aggregate amount of optional prepayments of the Term Loans, andprepayments of Revolving Loans and Swingline Loans to the extent accompanied bypermanent reductions in Revolving Commitments, made during any fiscal yearshall reduce on a dollar-for-dollar basis the required amount of the

 

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mandatoryprepayment to be made pursuant to Section 4.2(d) with respect to the Excess CashFlow for such fiscal year.

 

“Excess Cash Flow Application Date”:  as defined in Section 4.2.

 

“Excluded Indebtedness”:  all Indebtedness permitted by Section 8.2.

 

“Existing Lenders”:  as defined in the recitals to this Agreement.

 

“Existing Term Commitments”:  the term commitments made under the OriginalCredit Agreement.

 

“Existing Term Loans”:  the term loans made under the Original CreditAgreement outstanding immediately prior to the Restatement Date.

 

“Facility”:  each of (a) the Term Commitments and the TermLoans made thereunder (the “Term Facility”), and (b) the RevolvingCommitments and the extensions of credit made thereunder (the “RevolvingFacility”).

 

“Federal Funds Effective Rate”:  for any day, the weighted average of therates on overnight federal funds transactions with members of the FederalReserve System arranged by federal funds brokers, as published on the nextsucceeding Business Day by the Federal Reserve Bank of New York, or, ifsuch rate is not so published for any day that is a Business Day, the averageof the quotations for the day of such transactions received by the ReferenceLender from three federal funds brokers of recognized standing selected by it.

 

“Foreign Subsidiary”:  any Subsidiary of the Borrower that is not aDomestic Subsidiary.

 

“Funded Debt”:  as to any Person, all Indebtedness of suchPerson that has a scheduled maturity (excluding any mandatory prepayments) morethan one year from the date of its creation or matures within one year fromsuch date but is renewable or extendible, at the option of such Person, to adate more than one year from such date or arises under a revolving credit orsimilar agreement that obligates the lender or lenders to extend credit duringa period of more than one year from such date, including all current maturitiesand current sinking fund payments in respect of such Indebtedness whether ornot required to be paid within one year from the date of its creation and, inthe case of the Borrower, Indebtedness in respect of the Loans.

 

“Funding Office”:  the office of the Administrative Agentspecified in Section 11.2 or such other office as may be specified from time totime by the Administrative Agent as its funding office by written notice to theBorrower and the Lenders.

 

“GAAP”:  generally accepted accounting principles inthe United States as in effect from time to time, except that for purposes ofSection 8.1, GAAP shall be determined on the basis of such principles in effecton the date hereof and consistent with those used in the preparation of themost recent audited financial statements referred to in Section 5.1(b).  In the

 

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event that anyAccounting Change (as defined below) shall occur and such change results in achange in the method of calculation of financial covenants, standards or termsin this Agreement, then the Borrower and the Administrative Agent agree toenter into negotiations in order to amend such provisions of this Agreement soas to equitably reflect such Accounting Changes with the desired result thatthe criteria for evaluating the Borrower’s financial condition shall be thesame after such Accounting Changes as if such Accounting Changes had not beenmade.  Until such time as such anamendment shall have been executed and delivered by the Borrower, theAdministrative Agent and the Required Lenders, all financial covenants,standards and terms in this Agreement shall continue to be calculated orconstrued as if such Accounting Changes had not occurred.  “Accounting Changes” refers to changesin accounting principles required by the promulgation of any rule, regulation,pronouncement or opinion by the Financial Accounting Standards Board of theAmerican Institute of Certified Public Accountants or, if applicable, the SEC.

 

“Governmental Authority”:  any nation or government, any state or otherpolitical subdivision thereof, any agency, authority, instrumentality,regulatory body, court, central bank or other entity exercising executive,legislative, judicial, taxing, regulatory or administrative functions of orpertaining to government, any securities exchange and any self-regulatoryorganization (including the National Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to Holdings, theBorrower and their respective Subsidiaries.

 

“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement, datedas of the Closing Date, among Holdings, the Borrower and each SubsidiaryGuarantor.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”),any obligation of (a) the guaranteeing person or (b) another Person (includingany bank under any letter of credit) to induce the creation of which theguaranteeing person has issued a reimbursement, counterindemnity or similarobligation, in either case guaranteeing or in effect guaranteeing anyIndebtedness, leases, dividends or other obligations (the “primaryobligations”) of any other third Person (the “primary obligor”) inany manner, whether directly or indirectly, including any obligation of theguaranteeing person, whether or not contingent, (i) to purchase any suchprimary obligation or any property constituting direct or indirect securitytherefor, (ii) to advance or supply funds (1) for the purchase or payment ofany such primary obligation or (2) to maintain working capital or equitycapital of the primary obligor or otherwise to maintain the net worth orsolvency of the primary obligor, (iii) to purchase property, securities orservices primarily for the purpose of assuring the owner of any such primaryobligation of the ability of the primary obligor to make payment of suchprimary obligation or (iv) otherwise to assure or hold harmless the owner ofany such primary obligation against loss in respect thereof; provided, however,that the term Guarantee Obligation shall not include endorsements ofinstruments for deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation of anyguaranteeing person shall be deemed to be the lower of (a) an amount equal tothe stated or determinable amount of the primary obligation in respect of whichsuch Guarantee Obligation is made and (b) the maximum amount for which suchguaranteeing person may be liable pursuant to the terms of the instrumentembodying such Guarantee Obligation or, if

 

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recourse islimited to a specific asset, the fair market value of such asset, unless suchprimary obligation and the maximum amount for which such guaranteeing personmay be liable are not stated or determinable, in which case the amount of suchGuarantee Obligation shall be such guaranteeing person’s maximum reasonablyanticipated liability in respect thereof as determined by the Borrower in goodfaith.

 

“Guarantors”:  the collective reference to Holdings and theSubsidiary Guarantors.

 

“Hedge Agreements”:  any agreement with respect to any swap,forward, future or derivative transaction or option or similar agreementinvolving, or settled by reference to, one or more rates, currencies,commodities, equity or debt instruments or securities, or economic, financialor pricing indices or measures of economic, financial or pricing risk or valueor any similar transaction or any combination of these transactions; providedthat no phantom stock, option or similar plan providing for payments only onaccount of services provided by current or former directors, officers,employees or consultants of the Borrower or the Subsidiaries shall be a HedgeAgreement.

 

“Holdings”:  as defined in the preamble to this Agreement.

 

“Indebtedness”:  of any Person at any date, withoutduplication, (a) all indebtedness of such Person for borrowed money, (b) allobligations of such Person for the deferred purchase price of property or services(other than current trade payables incurred in the ordinary course of suchPerson’s business), (c) all obligations of such Person evidenced by notes,bonds, debentures or other similar instruments, (d) all indebtedness created orarising under any conditional sale or other title retention agreement withrespect to property acquired by such Person (even though the rights andremedies of the seller or lender under such agreement in the event of defaultare limited to repossession or sale of such property), (e) all Capital LeaseObligations of such Person, (f) all obligations of such Person, contingent orotherwise, as an account party or applicant under or in respect of acceptances,letters of credit, surety bonds or similar arrangements, (g) all obligations ofsuch Person, contingent or otherwise, to purchase, redeem, retire or otherwiseacquire for value any Capital Stock of such Person, (h) all GuaranteeObligations of such Person in respect of obligations of the kind referred to inclauses (a) through (g) above, (i) all obligations of the kind referred to inclauses (a) through (h) above secured by (or for which the holder of suchobligation has an existing right, contingent or otherwise, to be secured by)any Lien on property (including accounts and contract rights) owned by suchPerson, whether or not such Person has assumed or become liable for the paymentof such obligation, and (j) for the purposes of Sections 8.2 and 9(e) only, allobligations of such Person in respect of Hedge Agreements; provided thatIndebtedness shall not include deferred revenue, deferred tax liabilities andunclaimed property.  The Indebtedness ofany Person shall include the Indebtedness of any other entity (including anypartnership in which such Person is a general partner) to the extent suchPerson is liable therefor as a result of such Person’s ownership interest in orother relationship with such entity, except to the extent the terms of suchIndebtedness expressly provide that such Person is not liable therefor.

 

“Initial Lead Arrangers”:  as defined in the preamble to this Agreement.

 

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“Initial Syndication Agent”:  as defined in the preamble to this Agreement.

 

“Insolvency”:  with respect to any Multiemployer Plan, the conditionthat such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Intellectual Property”:  the collective reference to all rights,priorities and privileges relating to intellectual property, whether arisingunder United States, multinational or foreign laws or otherwise, includingcopyrights, copyright licenses, patents, patent licenses, trademarks, trademarklicenses, technology, know-how and processes, and all rights to sue at law orin equity for any infringement or other impairment thereof, including the rightto receive all proceeds and damages therefrom.

 

“Intercreditor Agreement”:  the Intercreditor Agreement to be executed bythe Administrative Agent and any applicable representative of the holders ofsecured Indebtedness permitted by Section 8.2(d), substantially in the form ofExhibit N, as it may be amended, supplemented or otherwise modified from time.

 

“Interest Payment Date”:  (a) as to any Base Rate Loan (other than any SwinglineLoan), the last day of each March, June, September and December to occur whilesuch Loan is outstanding and the final maturity date of such Loan, (b) as toany Eurodollar Loan having an Interest Period of three months or less, the lastday of such Interest Period, (c) as to any Eurodollar Loan having an InterestPeriod longer than three months, each day that is three months, or a wholemultiple thereof, after the first day of such Interest Period and the last dayof such Interest Period, (d) as to any Loan (other than any Revolving Loan thatis a Base Rate Loan and any Swingline Loan), the date of any repayment orprepayment made in respect thereof and (e) as to any Swingline Loan, the daythat such Loan is required to be paid.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially, theperiod commencing on the borrowing or conversion date, as the case may be, withrespect to such Eurodollar Loan and ending one, two, three or six or (ifavailable to all Lenders under the relevant Facility) nine or twelve monthsthereafter, as selected by the Borrower in its notice of borrowing or notice ofconversion, as the case may be, given with respect thereto; and (b) thereafter,each period commencing on the last day of the next preceding Interest Periodapplicable to such Eurodollar Loan and ending one, two, three or six or (ifavailable to all Lenders under the relevant Facility) nine or twelve monthsthereafter, as selected by the Borrower by irrevocable notice to theAdministrative Agent no later than 2:00 P.M., New York City time, on the datethat is three Business Days prior to the last day of the then current InterestPeriod with respect thereto; provided that, all of the foregoingprovisions relating to Interest Periods are subject to the following:

 

(i)            ifany Interest Period would otherwise end on a day that is not a Business Day,such Interest Period shall be extended to the next succeeding Business Dayunless the result of such extension would be to carry such Interest Period intoanother

 

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calendar month in which event such Interest Period shall end on theimmediately preceding Business Day;

 

(ii)          the Borrower may not select an Interest Period under a particular Facility thatwould extend beyond the Revolving Termination Date or beyond the date finalpayment is due on the Term Loans;

 

(iii)         any Interest Period that begins on the last Business Day of a calendar month(or on a day for which there is no numerically corresponding day in the calendarmonth at the end of such Interest Period) shall end on the last Business Day ofa calendar month; and

 

(iv)         the Borrower shall select Interest Periods so as not to require a payment orprepayment of any Eurodollar Loan during an Interest Period for such Loan.

 

“Investments”:  as defined in Section 8.8.

 

“Issuing Lender”:  LaSalle Bank National Association, in itscapacity as issuer of any Letter of Credit.

 

“L/C Commitment”:  $10,000,000.

 

“L/C Fee Payment Date”:  the last day of each March, June, Septemberand December and the last day of the Revolving Commitment Period.

 

“L/C Obligations”:  at any time, an amount equal to the sum of(a) the aggregate then undrawn and unexpired amount of the then outstandingLetters of Credit and (b) the aggregate amount of drawings under Letters ofCredit that have not then been reimbursed pursuant to Section 3.11.

 

“L/C Participants”:  the collective reference to all the RevolvingLenders other than the Issuing Lender.

 

“Lead Arranger”:  as defined in the preamble to this Agreement.

 

“Lender Presentation”:  the Lender Presentation dated April 2006 andfurnished to the Lenders.

 

“Lenders”:  as defined in the preamble to this Agreement;provided, that unless the context otherwise requires, each referenceherein to the Lenders shall be deemed to include any Conduit Lender.

 

“Letters of Credit”:  as defined in Section 3.7(a).

 

“Lien”:  any mortgage, pledge, hypothecation,assignment, deposit arrangement, encumbrance, lien (statutory or other), chargeor other security interest or any preference, priority or other securityagreement or preferential arrangement with respect to property of any

 

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kind or naturewhatsoever (including any conditional sale or other title retention agreementand any capital lease having substantially the same economic effect as any ofthe foregoing).

 

“Loan”:  any loan made by any Lender pursuant to thisAgreement.

 

“Loan Documents”:  this Agreement, the Security Documents, theReaffirmation Agreement and the Notes.

 

“Loan Parties”:  each Group Member that is a party to a LoanDocument.

 

“Majority Facility Lenders”:  with respect to any Facility, the holders ofmore than 50% of the aggregate unpaid principal amount of the Term Loans or theTotal Revolving Extensions of Credit, as the case may be, outstanding undersuch Facility (or, in the case of the Revolving Facility, prior to anytermination of the Revolving Commitments, the holders of more than 50% of theTotal Revolving Commitments).

 

“Management Agreement”: collectively,those certain letter agreements, by and between (i) the Borrower and QuadrangleAdvisors LLC, and (ii) the Borrower and Quadrangle Debt Recovery Advisors LLC,setting forth certain terms regarding payments from the Borrower for managementand advisory services rendered by such entities.

 

“Material Adverse Effect”:  a material adverse effect on (a) thebusiness, assets, property, financial condition or results of operations of theBorrower and its Subsidiaries taken as a whole or (b) the validity orenforceability of the Loan Documents or the rights or remedies of the Agents orthe Lenders hereunder or thereunder or the validity, perfection or priority ofthe Administrative Agent’s Liens on the Collateral.

 

“Materials of Environmental Concern”:  any gasoline or petroleum (including crudeoil or any fraction thereof) or petroleum products or any hazardous or toxicsubstances, materials or wastes as such are defined or otherwise regulated inor under any Environmental Law, including asbestos, polychlorinated biphenylsand urea-formaldehyde insulation.

 

“Modifications”:  as defined in Section 6.1(k).

 

“Mortgaged Properties”:  the real properties listed on Schedule1.1(c), as to which the Administrative Agent for the benefit of the Lenders shallbe granted a Lien pursuant to the Mortgages.

 

“Mortgages”:  each of the amended mortgages and deeds oftrust, as amended by the Modifications, made by any Loan Party in favor of, orfor the benefit of, the Administrative Agent for the benefit of the Lenders,substantially in the form of Exhibit C (with such changes thereto as shallbe advisable under the law of the jurisdiction in which such mortgage or deedof trust is to be recorded).

 

“Multiemployer Plan”:  a Plan that is a multiemployer plan as definedin Section 4001(a)(3) of ERISA.

 

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“Net Cash Investment Cost”: for anyperiod, with respect to any Person and its Subsidiaries, the excess of (a) thesum of (i) the aggregate amount of direct and indirect installation expensesrelated to acquiring new customers, (ii) the aggregate amount of direct andindirect selling expenses related to acquiring new customers and (iii) theaggregate amount paid, directly or indirectly, for acquisition of subscriberaccounts from any third party, minus (b) the aggregate systeminstallation revenues related to acquiring new customers; each of clause(a)(i), (a)(ii) and (b) determined without the inclusion of amortization ofdeferred costs or amortization of deferred revenues, as appropriate, in thatperiod, and with the inclusion of costs deferred or revenues deferred, asappropriate, in that period, and each amount herein in accordance with GAAP.

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale,Allotted Disposition, equity issuance of Holdings or Recovery Event, theproceeds thereof in the form of cash and Cash Equivalents (including any suchproceeds received by way of deferred payment of principal pursuant to a note orinstallment receivable or purchase price adjustment receivable or by theDisposition of any non-cash consideration received in connection therewith orotherwise, but only as and when received) of such Asset Sale, AllottedDisposition or Recovery Event, net of attorneys’ fees, accountants’ fees,investment banking fees, amounts required to be applied to the repayment ofIndebtedness secured by a Lien expressly permitted hereunder on any asset thatis the subject of such Asset Sale, Allotted Disposition or Recovery Event(other than any Lien pursuant to a Security Document) and other reasonable outof pocket fees and expenses actually incurred in connection therewith and netof taxes paid or reasonably estimated to be payable as a result thereof (aftertaking into account any available tax credits or deductions and any tax sharingarrangements) and reasonable reserves required to be taken in connectiontherewith pursuant to GAAP and (b) in connection with any issuance or sale ofCapital Stock or any incurrence of Indebtedness, the cash proceeds receivedfrom such issuance or incurrence, net of attorneys’ fees, investment bankingfees, accountants’ fees, underwriting discounts and commissions and othercustomary fees and expenses actually incurred in connection therewith.

 

“Non-Excluded Taxes”:  as defined in Section 4.10(a).

 

“Non-U.S. Lender”:  as defined in Section 4.10(d).

 

“Notes”:  the collective reference to any promissorynote evidencing Loans.

 

“Obligations”:  the unpaid principal of and interest on(including interest accruing after the maturity of the Loans and ReimbursementObligations and interest accruing after the filing of any petition inbankruptcy, or the commencement of any insolvency, reorganization or likeproceeding, relating to the Borrower, whether or not a claim for post-filing orpost-petition interest is allowed in such proceeding) the Loans and all otherobligations and liabilities of the Borrower to any Agent or to any Lender (or,in the case of Specified Hedge Agreements, any Affiliate of any Agent or anyLender), whether direct or indirect, absolute or contingent, due or to becomedue, or now existing or hereafter incurred, which may arise under, out of, orin connection with, this Agreement, any other Loan Document, the Letters ofCredit, any Specified Hedge Agreement or any other document made, delivered orgiven in connection herewith or therewith, whether on account of principal,interest, reimbursement obligations, fees,

 

20



 

indemnities,costs, expenses (including all fees, charges and disbursements of counsel toany Agent or to any Lender that are required to be paid by the Borrowerpursuant hereto) or otherwise; provided, that (i) obligations of theBorrower or any Subsidiary under any Specified Hedge Agreement shall be securedand guaranteed pursuant to the Security Documents only to the extent that, andfor so long as, the other Obligations are so secured and guaranteed and (ii)any release of Collateral or Guarantors or amendments to the Security Documentseffected in the manner permitted by this Agreement shall not require theconsent of holders of obligations under Specified Hedge Agreements.

 

“Original Credit Agreement”:  as defined in the recitals to this Agreement.

 

“Other Taxes”:  any and all present or future stamp ordocumentary taxes or any other excise or property taxes, charges or similar leviesarising from any payment made hereunder or from the execution, delivery orenforcement of, or otherwise with respect to, this Agreement or any other LoanDocument.

 

“Participant”:  as defined in Section 11.6(b).

 

“PBGC”:  the Pension Benefit Guaranty Corporationestablished pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted Acquisitions”: the acquisition by the Borrower or any of its Subsidiaries of all orsubstantially all of the assets of a Person or line of business of such Person,or all of the Capital Stock of a Person (in each case referred to herein as the“Acquired Entity”); provided that (a) the Acquired Entityshall be a going concern and shall be in a related line of business as that ofthe Borrower and its Subsidiaries as conducted during the current and mostrecently concluded calendar year; (b) all of the assets of the Acquired Entityshall be located in the United States (provided that such acquisitionmay involve assets located outside the United States so long as the sum of theaggregate value of such foreign assets acquired shall be deemed to be anInvestment for purposes of clause (p) of Section 8.8 and shall be permissibleunder such clause of such Section); (c) such acquisition shall be consensualand shall have been approved by the Acquired Entity’s board of directors (orother applicable governing body); (d) either (i) the consideration paid inconnection with such acquisition shall be funded solely with the Net CashProceeds from an Allotted Disposition with respect to which a ReinvestmentNotice shall have been delivered hereunder or (ii) the cash consideration (netof any Net Cash Proceeds received from equity issuances by Holdings orissuances of subordinated Indebtedness by Holdings to the Sponsor pursuant toSection 8.2(p), in each case, to the extent such proceeds are substantiallysimultaneously applied to fund such Permitted Acquisition) paid in connectionwith such acquisition and any other acquisitions under this definition that isnot funded as described in clause (i) above shall not in the aggregate exceed$15,000,000 during any fiscal year and $35,000,000 in the aggregate during theterm of this Agreement; (e) at the time of such transaction (i) both before andafter giving effect thereto, no Event of Default or Default shall have occurredand be continuing; and (ii) the Borrower would be in compliance with thecovenants set forth in Section 8.1, in each case, as of the most recentlycompleted period ending prior to such transaction for which the financialstatements and certificates required by Section 7.1(a) or 7.1(b) andSection 7.2 were required to be delivered after giving pro forma

 

21



 

effect to such transaction and to any other event occurring after suchperiod as to which pro forma recalculation is appropriate (including anyother transaction described in this definition occurring after such period) asif such transaction (and the occurrence, refinancing or assumption of anyIndebtedness in connection therewith) had occurred as of the first day of suchperiod; (f) at least five Business Days prior to the proposed date of theconsummation of such acquisition, the Borrower shall have delivered to theAdministrative Agent a Compliance Certificate demonstrating compliance with therequirements of clause (e)(ii) above (which shall have attached theretoreasonably detailed backup data and calculations showing such compliance); (g)Holdings, the Borrower and the Subsidiaries of the Borrower shall not incur orassume any Indebtedness in connection with such acquisition, except aspermitted by Section 8.2; and (h) the Borrower and its Subsidiaries shallcomply, and shall cause the Acquired Entity to comply, with the applicableprovisions of Sections 7.10 and 7.11 and the Security Documents.

 

“Permitted Investors”:  the collective reference to the Sponsor andits Control Investment Affiliates.

 

“Permitted Refinancing” therefinancing of 100% of the Senior Subordinated Notes with the proceeds ofIndebtedness of the Borrower or Holdings issued pursuant to documentation (a)containing terms that provide for (i) a final maturity at least six monthsafter the Term Loan Maturity Date, (ii) a fixed interest rate consistent withthen prevailing market conditions, or a floating interest rate (provided thatif such Indebtedness is incurred prior to the two-year anniversary of theRestatement Date, the Borrower shall have obtained interest rate hedgingcontracts, on terms which are reasonably satisfactory to the AdministrativeAgent, that effectively fix the interest rate on such Indebtedness to theextent necessary to provide that at least 50% of the Borrower’s outstandingIndebtedness is subject to either a fixed interest rate or interest rateprotection until such two-year anniversary), (iii) no amortization of theprincipal amount of such Indebtedness prior to the date that is six monthsafter the Term Loan Maturity Date, and (iv) Indebtedness that is eitherunsecured or secured by a Lien on all assets, and only such assets, thatconstitute Collateral, provided that, if such debt is so secured, the Liens onsuch Collateral granted in favor of the lenders of such Indebtedness are secondin priority to the Liens granted to the Lenders under this Agreement, and tothe extent such debt is so secured, the trustee, administrative agent or otherrepresentative of such lenders, as applicable, has delivered an executedIntercreditor Agreement substantially in the form of Exhibit N or otherwiseacceptable to the Administrative Agent, or (b) on terms otherwise acceptable tothe Administrative Agent.

 

“Person”:  an individual, partnership, corporation,limited liability company, business trust, joint stock company, trust,unincorporated association, joint venture, Governmental Authority or otherentity of whatever nature.

 

“Plan”:  at a particular time, any employee benefitplan that is covered by ERISA and in respect of which the Borrower or aCommonly Controlled Entity is (or, if such plan were terminated at such time,would under Section 4069 of ERISA be deemed to be) an “employer” as defined inSection 3(5) of ERISA.

 

“Pricing Grid”:  the pricing grid attached hereto as Annex A.

 

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“Pro Forma Balance Sheet”:  as defined in Section 5.1(a).

 

“Projections”:  as defined in Section 7.2(c).

 

“Properties”:  as defined in Section 5.17(a).

 

“Property”:  any right or interest in or to property ofany kind whatsoever, whether real, personal or mixed and whether tangible orintangible, including Capital Stock.

 

“Qualified Counterparty”:  with respect to any Specified HedgeAgreement, any counterparty thereto that, at the time such Specified HedgeAgreement was entered into, was a Lender or an Affiliate of a Lender or anAgent or an Affiliate of an Agent.

 

“Qualified PO”:  an underwritten public offering of commonstock of (and by) Holdings pursuant to an effective registration statementfiled with the Securities and Exchange Commission in accordance with theSecurities Act, which public offering results in gross cash proceeds toHoldings of $50,000,000 or more.

 

“Reaffirmation Agreement”:  the Reaffirmation Agreement to be executed bythe Borrower and each Guarantor substantially in the form of Exhibit M, as itmay be amended, supplemented or otherwise modified from time to time.

 

“Recovery Event”:  any settlement of or payment in respect ofany property or casualty insurance claim or any condemnation proceedingrelating to any asset of any Group Member (excluding business interruptioninsurance).

 

“Reference Bank”:  Deutsche Bank.

 

“Refinanced Indebtedness”:  the Existing Term Loans.

 

“Refinancing”:  the repayment in full, with the proceeds ofthe Term Loans, of the Refinanced Indebtedness.

 

“Refunded Swingline Loans”:  as defined in Section 3.4(b).

 

“Refunding Date”:  as defined in Section 3.4(c).

 

“Register”:  as defined in Section 11.6(b).

 

“Regulation U”:  Regulation U of the Board as in effect fromtime to time.

 

“Reimbursement Obligation”:  the obligation of the Borrower to reimbursethe Issuing Lender pursuant to Section 3.11 for amounts drawn under Letters ofCredit.

 

“Reinvestment Deferred Amount”:  with respect to any Reinvestment Event, theportion of Net Cash Proceeds received by any Group Member in connectiontherewith that are subject to the mandatory prepayment requirements of Section4.2(a), (c) or (e) but are not

 

23



 

applied toprepay the Term Loans or reduce the Revolving Commitments pursuant to Section4.2(a), (c) or (e) as a result of the delivery of a Reinvestment Notice.

 

“Reinvestment Event”:  any Asset Sale, equity issuance of Holdings,Recovery Event or Allotted Disposition in respect of which the Borrower hasdelivered a Reinvestment Notice.

 

“Reinvestment Notice”:  a written notice executed by a ResponsibleOfficer stating that no Event of Default has occurred and is continuing andthat the Borrower (directly or indirectly through a Subsidiary) intends andexpects to use all or a specified portion of the Net Cash Proceeds of an AssetSale, equity issuance of Holdings, Recovery Event or Allotted Disposition (i)to acquire or repair assets useful in (or, pursuant to a Permitted Acquisition,any Acquired Entity engaged in) the business of providing alarm monitoringservices, (ii) for expenditures included in the definition of Net CashInvestment Costs, or (iii) solely in the case of Net Cash Proceeds of anyequity issuance of Holdings, to prepay all or any portion of the SeniorSubordinated Notes.

 

“Reinvestment Prepayment Amount”:  with respect to any Reinvestment Event, theReinvestment Deferred Amount relating thereto less any amount expended (and,prior to the date that is 360 days following the receipt of Net Cash Proceedsfrom the relevant Reinvestment Event, amounts subject to a binding commitment(evidenced by documentation reasonably satisfactory to the AdministrativeAgent) to be expended within such period as evidenced in the applicableReinvestment Notice) prior to the relevant Reinvestment Prepayment Date (i) toacquire or repair assets useful in (or, pursuant to a Permitted Acquisition,any Acquired Entity engaged in) the business of providing alarm monitoringservices, (ii) for expenditures included in the definition of Net CashInvestment Costs, or (iii) solely in the case of Net Cash Proceeds of anyequity issuance of Holdings, to prepay all or any portion of the SeniorSubordinated Notes.

 

“Reinvestment Prepayment Date”:  with respect to any Reinvestment Event, theearlier of (a) the date occurring 270 days after the Net Cash Proceeds fromsuch Reinvestment Event are received and (b) the date on which the Borrowershall have determined not to, or shall have otherwise ceased to, acquire orrepair assets useful in (or any Acquired Entity engaged in) the business ofproviding alarm monitoring services or for Net Cash Investment Costs (or, inthe case of Net Cash Proceeds of any equity issuance of Holdings, to prepay allor any portion of the Senior Subordinated Notes) with all or any portion of therelevant Reinvestment Deferred Amount; provided that, as to amounts evidencedin any Reinvestment Notice to be committed for expenditure within 360 daysfollowing the receipt of Net Cash Proceeds from the relevant ReinvestmentEvent, the date set forth in clause (a) hereof shall be extended from 270 to360 days.

 

“Reorganization”:  with respect to any Multiemployer Plan, thecondition that such plan is in reorganization within the meaning of Section4241 of ERISA.

 

“Reportable Event”:  any of the events set forth in Section4043(c) of ERISA, other than those events as to which the thirty day noticeperiod is waived under applicable regulations or any successor thereto.

 

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“Required Lenders”:  at any time, the holders of more than 50% of(a) until the funding of the Term Loans, the Commitments then in effect and (b)thereafter, the sum of (i) the aggregate unpaid principal amount of the TermLoans then outstanding and (ii) the Total Revolving Commitments then in effector, if the Revolving Commitments have been terminated, the Total RevolvingExtensions of Credit then outstanding.

 

“Requirement of Law”:  as to any Person, the certificate ofincorporation and by-laws or other organizational or governing documents ofsuch Person, and any law, treaty, rule or regulation or determination of anarbitrator or a court or other Governmental Authority, in each case applicableto or binding upon such Person or any of its property or to which such Personor any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president orchief financial officer of the Borrower, but in any event, with respect tofinancial matters, the chief financial officer of the Borrower.

 

“Restatement Date”:  the date on which the conditions precedentset forth in Section 6.1 shall have been satisfied or waived.

 

“Restatement Date Certificate”:  a Restatement Date Certificate substantiallyin the form of Exhibit B.

 

“Restricted Payments”:  as defined in Section 8.6.

 

“Revolving Commitment”:  as to any Lender, the obligation of suchLender, if any, to make Revolving Loans and participate in Swingline Loans andLetters of Credit in an aggregate principal and/or face amount not to exceedthe amount set forth under the heading “Revolving Commitment” under suchLender’s name on such Lender’s Addendum or in the Assignment and Assumptionpursuant to which such Lender became a party hereto, as the same may be changedfrom time to time pursuant to the terms hereof. The amount of the Total Revolving Commitments as of the Restatement Dateis $25,000,000.

 

“Revolving Commitment Period”:  the period from and including the ClosingDate to the Revolving Termination Date.

 

“Revolving Extensions of Credit”:  as to any Revolving Lender at any time, anamount equal to the sum of (a) the aggregate principal amount of all RevolvingLoans held by such Lender then outstanding, (b) such Lender’s RevolvingPercentage of the L/C Obligations then outstanding and (c) such Lender’sRevolving Percentage of the aggregate principal amount of Swingline Loans thenoutstanding.

 

“Revolving Lender”:  each Lender that has a Revolving Commitmentor that holds Revolving Loans.

 

“Revolving Loans”:  as defined in Section 3.1(a).

 

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“Revolving Percentage”:  as to any Revolving Lender at any time, thepercentage which such Lender’s Revolving Commitment then constitutes of theTotal Revolving Commitments (or, at any time after the Revolving Commitmentsshall have expired or terminated, the percentage which the aggregate principalamount of such Lender’s Revolving Loans then outstanding constitutes of theaggregate principal amount of the Revolving Loans then outstanding).

 

“Revolving Termination Date”:  April 18, 2010; provided that theRevolving Termination Date shall automatically become June 30, 2008 if theSenior Subordinated Notes are not repaid (or refinanced pursuant to a PermittedRefinancing) in full on or before such date.

 

“SEC”: the Securities and Exchange Commission, any successor thereto and anyanalogous Governmental Authority.

 

“Secured Parties”: as defined in theGuarantee and Collateral Agreement.

 

“Securities Act”: the Securities Actof 1933, as amended from time to time.

 

“Security Documents”:  the collective reference to the Guarantee andCollateral Agreement, the Mortgages and all other security documents hereafterdelivered to the Administrative Agent granting a Lien on any property of anyPerson to secure the obligations and liabilities of any Loan Party under anyLoan Document.

 

“Senior Subordinated Notes”:  the Borrower’s outstanding 8.125% SeniorSubordinated Notes due 2009.

 

“Single Employer Plan”:  any Plan that is covered by Title IV ofERISA, but that is not a Multiemployer Plan.

 

“Solvent”:  with respect to any Person, as of any date ofdetermination, (a) the amount of the “present fair saleable value” of theassets of such Person will, as of such date, exceed the amount of all “probableliabilities of such Person, contingent or otherwise”, as of such date, as suchquoted terms are determined in accordance with applicable federal and statelaws governing determinations of the insolvency of debtors, (b) the presentfair saleable value of the assets of such Person will, as of such date, begreater than the amount that will be required to pay the liability of suchPerson on its debts as such debts become absolute and matured, (c) such Personwill not have, as of such date, an unreasonably small amount of capital withwhich to conduct its business, (d) such Person will generally be able to payits debts as they mature.  For purposesof this definition, (i) “debt” means liability on a “claim”, and (ii) “claim”means any (x) right to payment, whether or not such a right is reduced tojudgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,disputed, undisputed, legal, equitable, secured or unsecured or (y) right to anequitable remedy for breach of performance if such breach gives rise to a rightto payment, whether or not such right to an equitable remedy is reduced tojudgment, fixed, contingent, matured or unmatured, disputed, undisputed,secured or unsecured, and (e) such Person has not executed any Loan Documentswith actual intent to hinder, delay or defraud either present or futurecreditors; provided, that in computing the amount of any contingent,

 

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unliquidated,unmatured or disputed claim at any time, it is intended that such claims willbe computed at the amount which, in light of all facts and circumstancesexisting at such time, represents the amount that can reasonably be expected tobecome an actual, liquidated or matured claim

 

“Specified Change of Control”:  a “Change of Control” (or any other definedterm having a similar purpose) as defined in the indenture governing the SeniorSubordinated Notes.

 

“Specified Hedge Agreement”:  any Hedge Agreement (a) entered into by (i) theBorrower or any of its Subsidiaries and (ii)any Qualified Counterparty and (b) thathas been designated by such Agent or Lender or Affiliate thereof, as the casemay be, and the Borrower, by notice to the Administrative Agent, as a SpecifiedHedge Agreement.  The designation of anyHedge Agreement as a Specified Hedge Agreement shall not create in favor of theQualified Counterparty that is a party thereto any rights in connection withthe management or release of any Collateral or of the obligations of anyGuarantor under the Guarantee and Collateral Agreement.

 

“Sponsor”:  Quadrangle Capital Partners LP, QuadrangleCapital Partners-A LP, Quadrangle Select Partners LP, any other Persons managedby Quadrangle GP Investors, LLC, Quadrangle Master Funding Ltd, any otherPersons managed by Quadrangle Debt Recovery Advisors LLC and their respectiveaffiliates.

 

“Subordinated Intercompany Note”:  with respect to any Group Member or affiliatethereof as the maker thereof, a promissory note substantially in the form ofExhibit J (with such modifications as the Administrative Agent may agree to),which promissory note shall evidence all intercompany loans which may be madefrom time to time by any payee thereunder (whether or not reflected on theattached schedule thereto), including that certain Subordinated IntercompanyNote dated as of the Closing Date, by and among the Group Members; providedthat the amounts reflected as owing pursuant to any such notes shall only berequired to be updated on a quarterly basis.

 

“Subsidiary”:  as to any Person, a corporation, partnership,limited liability company or other entity of which shares of stock or otherownership interests having ordinary voting power (other than stock or suchother ownership interests having such power only by reason of the happening ofa contingency) to elect a majority of the board of directors or other managersof such corporation, partnership or other entity are at the time owned, or themanagement of which is otherwise controlled, directly or indirectly through oneor more intermediaries, or both, by such Person.  Unless otherwise qualified, all references toa “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to aSubsidiary or Subsidiaries of Holdings.

 

“Subsidiary Guarantor”:  each Domestic Subsidiary of the Borrower.

 

“Swingline Commitment”:  the obligation of the Swingline Lender tomake Swingline Loans pursuant to Section 3.3 in an aggregate principal amountat any one time outstanding not to exceed $2,500,000.

 

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“Swingline Lender”:  Bear Stearns Corporate Lending Inc., in itscapacity as the lender of Swingline Loans.

 

“Swingline Loans”:  as defined in Section 3.3.

 

“Swingline Participation Amount”:  as defined in Section 3.4.

 

“Syndication Agent”:  as defined in the preamble to this Agreement.

 

“Term Commitment”:  as to any Lender, the obligation of suchLender, if any, to make a Term Loan to the Borrower hereunder in a principalamount not to exceed the amount set forth under the heading “Term Commitment”under such Lender’s name on such Lender’s Addendum.  The aggregate amount of the Term Commitmentsas of the Restatement Date is $300,000,000.

 

“Term Lender”:  each Lender that has a Term Commitment orthat holds a Term Loan.

 

“Term Loan”:  as defined in Section 2.1.

 

“Term Loan Maturity Date”: March 31,2012; provided that the Term Loan Maturity Date shall automaticallybecome June 30, 2008 if the Senior Subordinated Notes are not repaid (orrefinanced pursuant to a Permitted Refinancing) in full on or prior to suchdate.

 

“Term Percentage”:  as to any Term Lender at any time, thepercentage which such Lender’s Term Commitment then constitutes of theaggregate Term Commitments (or, at any time after the funding of the TermLoans, the percentage which the aggregate principal amount of such Lender’sTerm Loans then outstanding constitutes of the aggregate principal amount ofthe Term Loans then outstanding).

 

 “TotalRevolving Commitments”:  at any time,the aggregate amount of the Revolving Commitments then in effect.

 

“Total Revolving Extensions of Credit”:  at any time, the aggregate amount of theRevolving Extensions of Credit of the Revolving Lenders outstanding at suchtime.

 

 “Transferee”:  any Assignee or Participant.

 

“Type”:  as to any Loan, its nature as a Base RateLoan or a Eurodollar Loan.

 

“United States”:  the United States of America.

 

“Wholly Owned Subsidiary”:  as to any Person, any other Person all of theCapital Stock of which (other than directors’ qualifying shares required bylaw) is owned by such Person directly and/or through other Wholly OwnedSubsidiaries.

 

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“Wholly Owned Subsidiary Guarantor”:  any Subsidiary Guarantor that is a WhollyOwned Subsidiary of the Borrower.

 

1.2.          OtherDefinitional Provisions.  (a)  Unless otherwise specified therein, all termsdefined in this Agreement shall have the defined meanings when used in theother Loan Documents or any certificate or other document made or deliveredpursuant hereto or thereto.

 

(b)   As used herein and in the other LoanDocuments, and any certificate or other document made or delivered pursuanthereto or thereto, (i) accounting terms relating to any Group Member notdefined in Section 1.1 and accounting terms partly defined in Section 1.1, tothe extent not defined, shall have the respective meanings given to them underGAAP, (ii) the words “include”, “includes” and “including” shall be deemed tobe followed by the phrase “without limitation”, (iii) the word “incur” shall beconstrued to mean incur, create, issue, assume, become liable in respect of orsuffer to exist (and the words “incurred” and “incurrence” shall havecorrelative meanings), (iv) the words “asset” and “property” shall be construedto have the same meaning and effect and to refer to any and all tangible andintangible assets and properties, including cash, Capital Stock, securities,revenues, accounts, leasehold interests and contract rights, and (v) referencesto agreements or other Contractual Obligations shall, unless otherwisespecified, be deemed to refer to such agreements or Contractual Obligations asamended, supplemented, restated or otherwise modified from time to time(subject to any applicable restrictions hereunder).

 

(c)   The words “hereof”, “herein” and “hereunder”and words of similar import when used in this Agreement shall refer to thisAgreement as a whole and not to any particular provision of this Agreement, andSection, Schedule and Exhibit references are to this Agreement unless otherwisespecified.

 

(d)   The meanings given to terms defined hereinshall be equally applicable to both the singular and plural forms of suchterms.

 

(e)   The expressions, “payment in full,” “paid infull” and any other similar terms or phrases when used herein with respect tothe Obligations shall mean the payment in full, in immediately available funds,of all the Obligations.

 

SECTION 2.  AMOUNT AND TERMS OF TERM COMMITMENTS

 

2.1.          Term Commitments. (a) Subject to the terms and conditions hereof, each Term Lenderseverally agrees to make a term loan (a “Term Loan”) to the Borrower onthe Restatement Date in an amount not to exceed the amount of the TermCommitment of such Lender.  The TermLoans may from time to time be Eurodollar Loans or Base Rate Loans, asdetermined by the Borrower and notified to the Administrative Agent in accordancewith Sections 2.2 and 4.3.

 

(b)   Subject to the terms and conditions hereof,each of the Continuing Lenders agrees that the Existing Term Loans made by suchLender under the Original Credit Agreement shall remain outstanding on andafter the Restatement Date as Term Loans made pursuant to this

 

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Agreement, and shall be deemed to have been repaidwith Term Loans made pursuant to this Agreement on the Restatement Date.  Each Existing Term Loan of a ContinuingLender shall be deemed to satisfy, dollar for dollar, such Continuing Lender’sobligation to make Term Loans on the Restatement Date.  Such Existing Term Loans shall on and afterthe Restatement Date have all of the rights and benefits of Term Loans as setforth in this Agreement and the other Loan Documents.  Notwithstanding anything herein to thecontrary, all such Term Loans made hereunder on the Restatement Date pursuantto this section 2.1(a)(b) that are Eurodollar Rate Loans will have initialInterest Periods ending on the same dates as the Interest Periods applicable tothe Existing Term Loans of such Continuing Lenders.

 

2.2.          Procedure for Term Loan Borrowing.  The Borrower shall give the AdministrativeAgent irrevocable notice (which notice must be received by the AdministrativeAgent prior to 10:00 A.M., New York City time, one Business Day prior to theanticipated Restatement Date) requesting that the Term Lenders make the TermLoans on the Restatement Date and specifying the amount to be borrowed.  Upon receipt of such notice theAdministrative Agent shall promptly notify each Term Lender thereof.  Not later than 12:00 Noon, New York Citytime, on the Restatement Date each Term Lender shall make available to theAdministrative Agent at the Funding Office an amount in immediately availablefunds (except as set forth in Section 2.1(b)) equal to the Term Loan or TermLoans to be made by such Lender.  TheAdministrative Agent shall credit the account of the Borrower on the books ofsuch office of the Administrative Agent with the aggregate of the amounts madeavailable to the Administrative Agent by the Term Lenders in immediatelyavailable funds.

 

2.3.          Repayment of Term Loans.  The Term Loan of each Term Lender shall mature in the followingquarterly installments, commencing on June 30, 2006, each of which shall be inan amount equal to such Lender’s Term Percentage multiplied by the amount setforth below opposite such installment:

 

Installment

 

Principal Amount

 

June 30, 2006

 

$750,000

 

September 30, 2006

 

$750,000

 

December 31, 2006

 

$750,000

 

March 31, 2007

 

$750,000

 

June 30, 2007

 

$750,000

 

September 30, 2007

 

$750,000

 

December 31, 2007

 

$750,000

 

March 31, 2008

 

$750,000

 

June 30, 2008

 

$750,000

 

September 30, 2008

 

$750,000

 

December 31, 2008

 

$750,000

 

March 31, 2009

 

$750,000

 

June 30, 2009

 

$750,000

 

September 30, 2009

 

$750,000

 

December 31, 2009

 

$750,000

 

March 31, 2010

 

$750,000

 

 

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June 30, 2010

 

$750,000

 

September 30, 2010

 

$750,000

 

December 31, 2010

 

$750,000

 

March 31, 2011

 

$750,000

 

June 30, 2011

 

$750,000

 

September 30, 2011

 

$750,000

 

December 31, 2011

 

$750,000

 

Term Loan Maturity Date

 

$282,750,000 or remainder

 

 

SECTION 3.  AMOUNT AND TERMS OF REVOLVING COMMITMENTS

 

3.1.          Revolving Commitments. (a)Subject to the terms and conditions hereof, each Revolving Lenderseverally agrees to make revolving credit loans (“Revolving Loans”) tothe Borrower from time to time during the Revolving Commitment Period in anaggregate principal amount at any one time outstanding which, when added tosuch Lender’s Revolving Percentage of the sum of (i) the L/C Obligations thenoutstanding and (ii) the aggregate principal amount of the Swingline Loans thenoutstanding, does not exceed the amount of such Lender’s RevolvingCommitment.  During the RevolvingCommitment Period the Borrower may use the Revolving Commitments by borrowing,prepaying and reborrowing the Revolving Loans in whole or in part, all inaccordance with the terms and conditions hereof.  The Revolving Loans may from time to time beEurodollar Loans or Base Rate Loans, as determined by the Borrower and notifiedto the Administrative Agent in accordance with Sections 3.2 and 4.3.

 

(b)   The Borrower shall repay all outstandingRevolving Loans on the Revolving Termination Date.

 

3.2.          Procedure for Revolving Loan Borrowing.   The Borrower may borrow under the RevolvingCommitments during the Revolving Commitment Period on any Business Day,provided that the Borrower shall give the Administrative Agent irrevocablenotice (which notice must be received by the Administrative Agent prior to 2:00P.M., New York City time, (a) three Business Days prior to the requestedBorrowing Date, in the case of Eurodollar Loans, or (b) one Business Day priorto the requested Borrowing Date, in the case of Base Rate Loans) (provided thatany such notice of a borrowing of Base Rate Loans under the Revolving Facilityto finance payments required to be made pursuant to Section 3.5 may be givennot later than 10:00 A.M., New York City time, on the date of the proposedborrowing), specifying (i) the amount and Type of Revolving Loans to beborrowed, (ii) the requested Borrowing Date and (iii) in the case of EurodollarLoans, the respective amounts of each such Type of Loan and the respectivelengths of the initial Interest Period therefor.  Each borrowing under the RevolvingCommitments shall be in an amount equal to (x) in the case of Base Rate Loans,$1,000,000 or a whole multiple thereof (or, if the then aggregate AvailableRevolving Commitments are less than $1,000,000, such lesser amount) and (y) inthe case of Eurodollar Loans, $1,000,000 or a whole multiple of $1,000,000 inexcess thereof; provided, that the Swingline Lender may request, on behalf ofthe Borrower, borrowings under the Revolving Commitments that are Base RateLoans in other amounts pursuant to Section 3.4. Upon receipt of any such notice from the Borrower,

 

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the Administrative Agent shall promptly notify each Revolving Lenderthereof.  Each Revolving Lender will makethe amount of its pro rata share of each borrowing available to theAdministrative Agent for the account of the Borrower at the Funding Officeprior to 12:00 Noon, New York City time, on the Borrowing Date requested by theBorrower in funds immediately available to the Administrative Agent.  Such borrowing will then be made available tothe Borrower by the Administrative Agent by crediting the account of the Borroweron the books of such office with the aggregate of the amounts made available tothe Administrative Agent by the Revolving Lenders and in like funds as receivedby the Administrative Agent.

 

3.3.          Swingline Commitment. (a) Subject to the terms and conditions hereof, the Swingline Lenderagrees to make a portion of the credit otherwise available to the Borrowerunder the Revolving Commitments from time to time during the RevolvingCommitment Period by making swing line loans (“Swingline Loans”) to the Borrower;provided that (i) the aggregate principal amount of Swingline Loansoutstanding at any time shall not exceed the Swingline Commitment then ineffect (notwithstanding that the Swingline Loans outstanding at any time, whenaggregated with the Swingline Lender’s other outstanding Revolving Loanshereunder, may exceed the Swingline Commitment then in effect) and (ii) theBorrower shall not request, and the Swingline Lender shall not make, anySwingline Loan if, after giving effect to the making of such Swingline Loan,the aggregate amount of the Available Revolving Commitments would be less thanzero.  During the Revolving CommitmentPeriod, the Borrower may use the Swingline Commitment by borrowing, repayingand reborrowing, all in accordance with the terms and conditions hereof.  Swingline Loans shall be Base Rate Loansonly.

 

(b)   The Borrower shall repay all outstandingSwingline Loans on the Revolving Termination Date.

 

3.4.          Procedure for Swingline Borrowing; Refunding of SwinglineLoans.  (a)  Whenever the Borrower desires that theSwingline Lender make Swingline Loans it shall give the Swingline Lenderirrevocable telephonic notice confirmed promptly in writing (which telephonicnotice must be received by the Swingline Lender not later than 1:00 P.M., NewYork City time, on the proposed Borrowing Date), specifying (i) the amount tobe borrowed and (ii) the requested Borrowing Date (which shall be a BusinessDay during the Revolving Commitment Period). Each borrowing under the Swingline Commitment shall be in an amountequal to $500,000 or a whole multiple of $100,000 in excess thereof.  Not later than 3:00 P.M., New York City time,on the Borrowing Date specified in a notice in respect of Swingline Loans, theSwingline Lender shall make available to the Administrative Agent at theFunding Office an amount in immediately available funds equal to the amount ofthe Swingline Loan to be made by the Swingline Lender.  The Administrative Agent shall make theproceeds of such Swingline Loan available to the Borrower on such BorrowingDate by depositing such proceeds in the account of the Borrower with theAdministrative Agent on such Borrowing Date in immediately available funds.

 

(b)   The Swingline Lender, at any time and fromtime to time in its sole and absolute discretion may, and on the third BusinessDay after the making of any Swingline Loan if no notice has yet been givenshall, on behalf of the Borrower (which hereby irrevocably directs theSwingline Lender to act on its behalf), on one Business Day’s notice given bythe Swingline

 

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Lender no later than 12:00Noon, New York City time, request each Revolving Lender to make, and eachRevolving Lender hereby agrees to make, a Revolving Loan, in an amount equal tosuch Revolving Lender’s Revolving Percentage of the aggregate amount of theSwingline Loans (the “Refunded Swingline Loans”) outstanding on the dateof such notice, to repay the Swingline Lender. Each Revolving Lender shall make the amount of such Revolving Loanavailable to the Administrative Agent at the Funding Office in immediatelyavailable funds, not later than 10:00 A.M., New York City time, one BusinessDay after the date of such notice.  Theproceeds of such Revolving Loans shall be immediately made available by theAdministrative Agent to the Swingline Lender for application by the SwinglineLender to the repayment of the Refunded Swingline Loans.  The Borrower irrevocably authorizes theSwingline Lender to charge the Borrower’s accounts with the AdministrativeAgent (up to the amount available in each such account) in order to immediatelypay the amount of such Refunded Swingline Loans to the extent amounts receivedfrom the Revolving Lenders are not sufficient to repay in full such RefundedSwingline Loans.

 

(c)   If prior to the time a Revolving Loan wouldhave otherwise been made pursuant to Section 3.4(b), one of the eventsdescribed in Section 9(f) shall have occurred and be continuing with respect tothe Borrower or if for any other reason, as determined by the Swingline Lenderin its sole discretion, Revolving Loans may not be made as contemplated bySection 3.4(b), each Revolving Lender shall, on the date such Revolving Loanwas to have been made pursuant to the notice referred to in Section 3.4(b) (the“Refunding Date”), purchase for cash an undivided participating interestin the then outstanding Swingline Loans by paying to the Swingline Lender anamount (the “Swingline Participation Amount”) equal to (i) suchRevolving Lender’s Revolving Percentage multiplied by (ii) the sum of theaggregate principal amount of Swingline Loans then outstanding that were tohave been repaid with such Revolving Loans.

 

(d)   Whenever, at any time after the SwinglineLender has received from any Revolving Lender such Lender’s SwinglineParticipation Amount, the Swingline Lender receives any payment on account ofthe Swingline Loans, the Swingline Lender will distribute to such Lender itsSwingline Participation Amount (appropriately adjusted, in the case of interestpayments, to reflect the period of time during which such Lender’sparticipating interest was outstanding and funded and, in the case of principaland interest payments, to reflect such Lender’s pro rata portionof such payment if such payment is not sufficient to pay the principal of andinterest on all Swingline Loans then due); provided, however,that in the event that such payment received by the Swingline Lender isrequired to be returned, such Revolving Lender will return to the SwinglineLender any portion thereof previously distributed to it by the SwinglineLender.

 

(e)   Each Revolving Lender’s obligation to makethe Loans referred to in Section 3.4(b) and to purchase participating interestspursuant to Section 3.4(c) shall be absolute and unconditional and shall not beaffected by any circumstance, including (i) any setoff, counterclaim,recoupment, defense or other right that such Revolving Lender or the Borrowermay have against the Swingline Lender, the Borrower or any other Person for anyreason whatsoever; (ii) the occurrence or continuance of a Default or an Eventof Default or the failure to satisfy any of the other conditions specified inSection 6; (iii) any adverse change in the condition (financial or otherwise)of the Borrower; (iv) any breach of this Agreement or any

 

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other Loan Document by theBorrower, any other Loan Party or any other Revolving Lender; or (v) any othercircumstance, happening or event whatsoever, whether or not similar to any ofthe foregoing.

 

3.5.          Commitment Fees, etc. (a)  The Borrower agrees to pay tothe Administrative Agent for the account of each Revolving Lender a commitmentfee for the period from and including the Closing Date to the last day of theRevolving Commitment Period, computed at the Commitment Fee Rate on the averagedaily amount of the Available Revolving Commitment of such Lender during theperiod for which payment is made, payable quarterly in arrears on the last dayof each March, June, September and December and on the Revolving TerminationDate, commencing on the first of such dates to occur after the date hereof.

 

(b)   The Borrower agrees to pay to theAdministrative Agent the fees in the amounts and on the dates previously agreedto in writing by the Borrower and the Administrative Agent.

 

(c)   The Borrower agrees to pay to the LeadArranger the fees in the amounts and on the dates previously agreed to inwriting by the Borrower and the Lead Arranger.

 

3.6.          Termination or Reduction of Revolving Commitments.  The Borrower shall have the right, upon notless than three Business Days’ notice to the Administrative Agent, to terminatethe Revolving Commitments or, from time to time, to reduce the amount of theRevolving Commitments; provided that no such termination or reduction ofRevolving Commitments shall be permitted if, after giving effect thereto and toany prepayments of the Revolving Loans and Swingline Loans made on theeffective date thereof, the Total Revolving Extensions of Credit would exceedthe Total Revolving Commitments.  Anysuch reduction shall be in an amount equal to $1,000,000, or a whole multiplethereof, and shall reduce permanently the Revolving Commitments then in effect.

 

3.7.          L/C Commitment. (a)  Subject to the terms andconditions hereof, the Issuing Lender, in reliance on the agreements of theother Revolving Lenders set forth in Section 3.10(a), agrees to issue lettersof credit (“Letters of Credit”) for the account of the Borrower on anyBusiness Day during the Revolving Commitment Period in such form as may beagreed from time to time between the Issuing Lender and Borrower; providedthat the Issuing Lender shall not issue any Letter of Credit if, (i) aftergiving effect to such issuance, the L/C Obligations would exceed the L/CCommitment, (ii) after giving effect to such issuance, the aggregate amount ofthe Available Revolving Commitments would be less than zero, or (iii) it hasreceived notice of any existing Default or Event of Default.  Each Letter of Credit shall (i) bedenominated in Dollars, and (ii) expire no later than the earlier of (x) thefirst anniversary of its date of issuance and (y) unless cash collateralized inan account at the Issuing Bank, the date that is five Business Days prior tothe Revolving Termination Date, provided that any Letter of Credit with aone-year term may provide for the renewal thereof for additional one-yearperiods (which shall in no event extend beyond the date referred to in clause(y) above).

 

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(b)   The Issuing Lender shall not at any time beobligated to issue any Letter of Credit hereunder if such issuance wouldconflict with, or cause the Issuing Lender or any L/C Participant to exceed anylimits imposed by, any applicable Requirement of Law.

 

3.8.          Procedure for Issuance of Letter of Credit.  The Borrower may from time to time requestthat the Issuing Lender issue a Letter of Credit by delivering to the IssuingLender at its address for notices specified herein an Application therefor,completed to the reasonable satisfaction of the Issuing Lender, and such othercertificates, documents and other papers and information as the Issuing Lendermay reasonably request.  Upon receipt ofany Application, the Issuing Lender will notify the Administrative Agent of theamount, the beneficiary and the requested expiration of the requested Letter ofCredit, and upon receipt of confirmation from the Administrative Agent thatafter giving effect to the requested issuance, the Available RevolvingCommitments would not be less than zero, the Issuing Lender will process suchApplication and the certificates, documents and other papers and informationdelivered to it in connection therewith in accordance with its customary proceduresand shall promptly issue the Letter of Credit requested thereby (but in noevent shall the Issuing Lender be required to issue any Letter of Creditearlier than three Business Days after its receipt of the Application thereforand all such other certificates, documents and other papers and informationrelating thereto) by issuing the original of such Letter of Credit to thebeneficiary thereof or as otherwise may be agreed to by the Issuing Lender andthe Borrower.  The Issuing Lender shallfurnish a copy of such Letter of Credit to the Borrower (with, upon itsrequest, a copy to the Administrative Agent) promptly following the issuancethereof.  The Issuing Lender shallpromptly furnish to the Administrative Agent, which shall in turn promptly furnishto the Administrative Agent, which shall in turn promptly furnish to theLenders, notice of the issuance of each Letter of Credit (including the amountthereof).

 

3.9.          Fees and Other Charges.  (a) The Borrower will pay to the Issuing Lender a fee on all outstandingLetters of Credit at a per annum rate equal to the Applicable Margin then ineffect with respect to Eurodollar Loans under the Revolving Facility, to beshared ratably among the Revolving Lenders and payable quarterly in arrears oneach L/C Fee Payment Date after the issuance date.  In addition, the Borrower shall pay to theIssuing Lender for its own account a fronting fee on the undrawn and unexpiredamount of each Letter of Credit as agreed by the Borrower and the IssuingLender, payable quarterly in arrears on each L/C Fee Payment Date after theissuance date.

 

(b)   In addition to the foregoing fees, theBorrower shall pay or reimburse the Issuing Lender for such normal andcustomary costs and expenses as are incurred or charged by the Issuing Lenderin issuing, negotiating, effecting payment under, amending or otherwiseadministering any Letter of Credit.

 

3.10.        L/C Participations. (a)  The Issuing Lenderirrevocably agrees to grant and hereby grants to each L/C Participant, and, toinduce the Issuing Lender to issue Letters of Credit hereunder, each L/CParticipant irrevocably agrees to accept and purchase and hereby accepts andpurchases from the Issuing Lender, on the terms and conditions set forth below,for such L/C Participant’s own account and risk an undivided interest equal tosuch L/C Participant’s Revolving Percentage in the Issuing Lender’s obligationsand rights under and in respect of each

 

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Letter of Credit issued hereunder, in accordance with the terms hereof,and the amount of each draft paid by the Issuing Lender thereunder.  Each L/C Participant unconditionally andirrevocably agrees with the Issuing Lender that, if a draft is paid under anyLetter of Credit for which the Borrower is required to reimburse the IssuingLender for and the Issuing Lender is not reimbursed in full by the Borrower inaccordance with the terms of this Agreement, such L/C Participant shall pay tothe Administrative Agent upon demand of the Issuing Lender an amount equal tosuch L/C Participant’s Revolving Percentage of the amount of such draft, or anypart thereof, that is not so reimbursed. The Administrative Agent shallpromptly forward such amounts to the Issuing Lender.

 

(b)   If any amount required to be paid by any L/CParticipant to the Administrative Agent for the account of the Issuing Lenderpursuant to Section 3.10(a) in respect of any unreimbursed portion of anypayment made by the Issuing Lender under any Letter of Credit is not paid tothe Administrative Agent for the account of the Issuing Lender within threeBusiness Days after the date such payment is demanded, such L/C Participantshall pay to the Administrative Agent for the account of the Issuing Lender ondemand an amount equal to the product of (i)such amount, times (ii) the daily averageFederal Funds Effective Rate during the period from and including the date suchpayment is required to the date on which such payment is immediately availableto the Issuing Lender, times (iii) afraction the numerator of which is the number of days that elapse during suchperiod and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuantto Section 3.10(a) is not made available to the Administrative Agent for theaccount of the Issuing Lender by such L/C Participant within three BusinessDays after the date such payment is demanded, the Issuing Lender shall beentitled to recover from such L/C Participant, on demand, such amount withinterest thereon calculated from such due date at the rate per annum applicableto Base Rate Loans under the Revolving Facility.  A certificate of the Issuing Lender submittedto any L/C Participant with respect to any amounts owing under this Sectionshall be conclusive in the absence of manifest error.

 

(c)   Whenever, at any time after the IssuingLender has made payment under any Letter of Credit and has received from anyL/C Participant its pro rata share of such payment in accordancewith Section 3.10(a), the Administrative Agent or the Issuing Lender receivesany payment related to such Letter of Credit (whether directly from theBorrower or otherwise, including proceeds of collateral applied thereto by theIssuing Lender), or any payment of interest on account thereof, theAdministrative Agent or the Issuing Lender, as the case may be, will distributeto such L/C Participant its pro rata share thereof; provided,however, that in the event that any such payment received byAdministrative Agent or the Issuing Lender, as the case may be, shall berequired to be returned by the Administrative Agent or the Issuing Lender, suchL/C Participant shall return to the Administrative Agent for the account of theIssuing Lender the portion thereof previously distributed by the AdministrativeAgent or the Issuing Lender, as the case may be, to it.

 

3.11.        Reimbursement Obligation of the Borrower.  The Borrower agrees to reimburse the IssuingLender on the Business Day next succeeding the Business Day on which theIssuing Lender notifies the Borrower of the date and amount of a draftpresented under any Letter of Credit and paid by the Issuing Lender for theamount of (a) such draft so paid and (b)

 

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any taxes, fees, charges or other reasonable costs or expenses incurredby the Issuing Lender in connection with such payment.  Each such payment shall be made to theIssuing Lender at its address for notices referred to herein in Dollars and inimmediately available funds.  Interest shallbe payable on any such amounts from the date on which the relevant draft ispaid until payment in full at the rate set forth in (i) until the Business Daynext succeeding the date of the relevant notice, Section 4.5(b) and (ii)thereafter, Section 4.5(c).  To theextent not so reimbursed as set forth above, each drawing under any Letter ofCredit shall (unless an event of the type described in clause (i) or (ii) ofSection 9(f) shall have occurred and be continuing with respect to theBorrower, in which case the procedures specified in Section 3.10 for funding byL/C Participants shall apply) constitute a request by the Borrower to theAdministrative Agent for a borrowing pursuant to Section 3.2 of Base Rate Loansin the amount of such drawing.  The BorrowingDate with respect to such borrowing shall be the first date on which aborrowing of Revolving Credit Loans could be made, pursuant to Section 3.2, ifthe Administrative Agent had received a notice of such borrowing at the timethe Administrative Agent receives notice from the relevant Issuing Lender ofsuch drawing under such Letter of Credit.

 

3.12.        Obligations Absolute. The Borrower’s obligations under Section 3.11 shall be absolute andunconditional under any and all circumstances and irrespective of any setoff,counterclaim or defense to payment that the Borrower may have or have hadagainst the Issuing Lender, any beneficiary of a Letter of Credit or any otherPerson.  The Borrower also agrees withthe Issuing Lender that the Issuing Lender shall not be responsible for, andthe Borrower’s Reimbursement Obligations under Section 3.11 shall not beaffected by, among other things, the validity or genuineness of documents or ofany endorsements thereon, even though such documents shall in fact prove to beinvalid, fraudulent or forged, or any dispute between or among the Borrower andany beneficiary of any Letter of Credit or any other party to which such Letterof Credit may be transferred or any claims whatsoever of the Borrower againstany beneficiary of such Letter of Credit or any such transferee.  Notwithstanding the foregoing, the IssuingLender shall not be liable for any error, omission, interruption or delay intransmission, dispatch or delivery of any message or advice, howevertransmitted, in connection with any Letter of Credit, except for errors oromissions found by a final and nonappealable decision of a court of competentjurisdiction to have resulted from the gross negligence or willful misconductof the Issuing Lender.  The Borrower agreesthat any action taken or omitted by the Issuing Lender under or in connectionwith any Letter of Credit or the related drafts or documents, if done in theabsence of gross negligence or willful misconduct and in accordance with thestandards of care specified in the Uniform Commercial Code of the State of NewYork, shall be binding on the Borrower and shall not result in any liability ofthe Issuing Lender to the Borrower.

 

3.13.        Letter of Credit Payments.  If any draft shall be presented for paymentunder any Letter of Credit, the Issuing Lender shall promptly notify theBorrower of the date and amount thereof. The responsibility of the Issuing Lender to the Borrower in connectionwith any draft presented for payment under any Letter of Credit shall, inaddition to any payment obligation expressly provided for in such Letter ofCredit, be limited to determining that the documents (including each draft)delivered under such Letter of Credit in connection with such presentment aresubstantially in conformity with such Letter of Credit.

 

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3.14.        Applications.  Tothe extent that any provision of any Application related to any Letter ofCredit is inconsistent with the provisions of this Section 3, the provisions ofthis Section 3 shall apply.

 

SECTION 4.  GENERAL PROVISIONS APPLICABLE
TO LOANS AND LETTERS OF CREDIT

 

4.1.          Optional Prepayments. The Borrower may at any time and from time to time prepay the Loans, inwhole or in part, without premium or penalty, upon irrevocable notice deliveredto the Administrative Agent no later than 2:00 P.M., New York City time, threeBusiness Days prior thereto in the case of Eurodollar Loans and no later than2:00 P.M., New York City time, one Business Day prior thereto in the case ofBase Rate Loans, which notice shall specify the date and amount of prepaymentand whether the prepayment is of Eurodollar Loans or Base Rate Loans; provided,that if a Eurodollar Loan is prepaid on any day other than the last day of theInterest Period applicable thereto, the Borrower shall also pay any amountsowing pursuant to Section 4.11.  Uponreceipt of any such notice the Administrative Agent shall promptly notify eachrelevant Lender thereof.  If any suchnotice is given, the amount specified in such notice shall be due and payableon the date specified therein, together with (except in the case of RevolvingLoans that are Base Rate Loans and Swingline Loans) accrued interest to suchdate on the amount prepaid.  Partialprepayments of Term Loans and Revolving Loans shall be in an aggregateprincipal amount of $1,000,000 or a whole multiple thereof.  Partial prepayments of Swingline Loans shallbe in an aggregate principal amount of $100,000 or a whole multiple thereof.

 

4.2.          Mandatory Prepayments and Commitment Reductions.  (a)        Ifany Capital Stock shall be issued by Holdings on any date (other than issuances(a) to the Sponsor and its Control Investment Affiliates, (b) to management,employees, directors or consultants of Holdings or any of its Subsidiariespursuant to any employee stock option or stock purchase plan or other employeebenefit plan in existence from time to time, or (c) to other Persons to theextent the proceeds of such issuances are (i) concurrently applied to fundPermitted Acquisitions or (ii) utilized to increase permitted Net CashInvestment Costs pursuant to clause (B)(iii) of the proviso to Section 8.7(b)),an amount equal to 50% of the Net Cash Proceeds thereof shall be applied(unless a Reinvestment Notice shall be delivered in respect thereof) on thedate of such issuance toward the prepayment of the Term Loans and the reductionof the Revolving Commitments as set forth in Section 4.2(f); providedthat (i) no such application of Net Cash Proceeds shall be required if, at thetime of such issuance of Capital Stock, the Borrower’s Consolidated LeverageRatio is less than 2.50:1.00 and (ii) notwithstanding the foregoing, on eachReinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amountwith respect to the relevant Reinvestment Event shall be applied toward theprepayment of the Term Loans and the reduction of the Revolving Commitments asset forth in Section 4.2(f).

 

(b)   If any Indebtedness shall be incurred by anyGroup Member (other than Excluded Indebtedness), an amount equal to 100% of theNet Cash Proceeds thereof shall be applied on the date of such incurrencetoward the prepayment of the Term Loans and the reduction of the RevolvingCommitments as set forth in Section 4.2(f).

 

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(c)   If on any date any Group Member shall receiveNet Cash Proceeds from any Asset Sale (including sales or issuances of CapitalStock of the Borrower or any of its Subsidiaries) or Recovery Event in excessof $500,000 then, unless a Reinvestment Notice shall be delivered in respectthereof, such Net Cash Proceeds shall be applied on such date toward theprepayment of the Term Loans and the reduction of the Revolving Commitments asset forth in Section 4.2(f); provided, that, notwithstanding theforegoing, on each Reinvestment Prepayment Date, an amount equal to theReinvestment Prepayment Amount with respect to the relevant Reinvestment Eventshall be applied toward the prepayment of the Term Loans and the reduction ofthe Revolving Commitments as set forth in Section 4.2(f).

 

(d)   If, for any fiscal year of the Borrowercommencing with the fiscal year ending December 31, 2007, there shall bepositive Excess Cash Flow, the Borrower shall, on the relevant Excess Cash FlowApplication Date, apply the ECF Percentage of such Excess Cash Flow toward theprepayment of the Term Loans and the reduction of the Revolving Commitments asset forth in Section 4.2(f).  Each suchprepayment and commitment reduction shall be made on a date (an “Excess CashFlow Application Date”) no later than five Business Days after the earlierof (i) the date on which the financial statements of the Borrower referred toin Section 7.1(a), for the fiscal year with respect to which such prepayment ismade, are required to be delivered to the Lenders and (ii) the date suchfinancial statements are actually delivered.

 

(e)   If on any date a Group Member shall receiveNet Cash Proceeds from any Allotted Disposition, then, unless a Reinvestment Noticeshall be delivered in respect thereof, an amount equal to 100% of such Net CashProceeds shall be applied on such date toward the prepayment of the Term Loansand the reduction of the Revolving Commitments as set forth in Section 4.2(f); providedthat, notwithstanding the foregoing, on each Reinvestment Prepayment Date, anamount equal to the Reinvestment Prepayment Amount with respect to the relevantReinvestment Event shall be applied toward the prepayment of the Term Loans andthe reduction of the Revolving Commitments as set forth in Section 4.2(f).

 

(f)    Amounts to be applied in connection withprepayments and Commitment reductions made pursuant to Section 4.2 shall beapplied, first, to the prepayment of the Term Loans and, second,to reduce permanently the Revolving Commitments.  Any such reduction of the RevolvingCommitments shall be accompanied by prepayment of the Revolving Loans and/orSwingline Loans to the extent, if any, that the Total Revolving Extensions ofCredit exceed the amount of the Total Revolving Commitments as so reduced, providedthat if the aggregate principal amount of Revolving Loans and Swingline Loansthen outstanding is less than the amount of such excess (because L/CObligations constitute a portion thereof), the Borrower shall, to the extent ofthe balance of such excess, replace outstanding Letters of Credit and/ordeposit an amount in cash in a cash collateral account established with theAdministrative Agent for the benefit of the Lenders on terms and conditionsreasonably satisfactory to the Administrative Agent.  The application of any prepayment pursuant toSection 4.2 shall be made, first, to Base Rate Loans and, second,to Eurodollar Loans.  Each prepayment ofthe Loans under Section 4.2 (except in the case of Revolving Loans that areBase Rate Loans and Swingline Loans) shall be accompanied by accrued interestto the date of such prepayment on the amount prepaid.

 

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(g)   Notwithstanding the foregoing, upon itsreceipt of the proceeds of the Term Loans, Borrower shall apply a portion ofsuch proceeds sufficient to (i) prepay in full the Existing Term Loans, (ii)pay all accrued and unpaid interest and fees, if any, on all Existing TermLoans held by Existing Lenders that are not Continuing Lenders, (iii) pay toeach Existing Lender that is not a Continuing Lender all amounts then due andowing as a result of the prepayment of such Lender’s Existing Term Loans and(iv) pay all other Obligations then due and owing to the Existing Lenders, intheir capacity as such, under the Original Credit Agreement.

 

4.3.          Conversion and Continuation Options.  (a) The Borrower may elect from time to time to convert Eurodollar Loans toBase Rate Loans by giving the Administrative Agent prior irrevocable notice ofsuch election no later than 2:00 P.M., New York City time, on the Business Daypreceding the proposed conversion date, provided that any such conversion ofEurodollar Loans may only be made on the last day of an Interest Period withrespect thereto.  The Borrower may electfrom time to time to convert Base Rate Loans to Eurodollar Loans by giving theAdministrative Agent prior irrevocable notice of such election no later than2:00 P.M., New York City time, on the Business Day preceding the proposedconversion date (which notice shall specify the length of the initial InterestPeriod therefor), provided that no Base Rate Loan under a particular Facilitymay be converted into a Eurodollar Loan when any Event of Default has occurredand is continuing and the Administrative Agent or the Majority Facility Lendersin respect of such Facility have determined in its or their sole discretion notto permit such conversions and have given notice to the Borrower of suchdetermination.  Upon receipt of any suchnotice the Administrative Agent shall promptly notify each relevant Lenderthereof.

 

(b)   Any Eurodollar Loan may be continued as suchupon the expiration of the then current Interest Period with respect thereto bythe Borrower giving irrevocable notice to the Administrative Agent, inaccordance with the applicable provisions of the term “Interest Period” setforth in Section 1.1, of the length of the next Interest Period to beapplicable to such Loans, provided that no Eurodollar Loan under aparticular Facility may be continued as such when any Event of Default hasoccurred and is continuing and the Administrative Agent has or the MajorityFacility Lenders in respect of such Facility have determined in its or theirsole discretion not to permit such continuations and have given notice to theBorrower of such determination, and provided, further, that ifthe Borrower shall fail to give any required notice as described above in thisparagraph or if such continuation is not permitted pursuant to the precedingproviso such Loans shall be automatically converted to Base Rate Loans on thelast day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptlynotify each relevant Lender thereof.

 

4.4.          Limitations on Eurodollar Tranches.  Notwithstanding anything to the contrary inthis Agreement, all borrowings, conversions and continuations of EurodollarLoans hereunder and all selections of Interest Periods hereunder shall be insuch amounts and be made pursuant to such elections so that, (a) after givingeffect thereto, the aggregate principal amount of the Eurodollar Loanscomprising each Eurodollar Tranche shall be equal to $500,000 or a wholemultiple of $500,000 in excess thereof and (b) no more than ten EurodollarTranches shall be outstanding at any one time.

 

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4.5.          Interest Rates and Payment Dates.  (a) Each Eurodollar Loan shall bear interest for each day during eachInterest Period with respect thereto at a rate per annum equal to theEurodollar Rate determined for such day plus the Applicable Margin.

 

(b)   Each Base Rate Loan shall bear interest at arate per annum equal to the Base Rate plus the Applicable Margin.

 

(c)   (i) If all or a portion of the principalamount of any Loan or Reimbursement Obligation shall not be paid when due(whether at the stated maturity, by acceleration or otherwise), such overdueamount shall bear interest at a rate per annum equal to (x) in the case of the Loans,the rate that would otherwise be applicable thereto pursuant to the foregoingprovisions of this Section plus 2% or (y) in the case of ReimbursementObligations, the rate applicable to Base Rate Loans under the RevolvingFacility plus 2%, and (ii) if all or a portion of any interest payableon any Loan or Reimbursement Obligation or any fee payable hereunder shall notbe paid when due (whether at the stated maturity, by acceleration orotherwise), such overdue amount shall bear interest at a rate per annum equalto the rate then applicable to Base Rate Loans under the relevant Facility plus2%, in each case, with respect to clauses (i) and (ii) above, from the date ofsuch non-payment until such amount is paid in full (after as well as beforejudgment).

 

(d)   Interest shall be payable in arrears on eachInterest Payment Date, provided that interest accruing pursuant toparagraph (c) of this Section shall be payable from time to time on demand.

 

4.6.          Computation of Interest and Fees.  (a) Interest and fees payable pursuant hereto shall be calculated on thebasis of a 360-day year for the actual days elapsed, except that, with respectto Base Rate Loans the rate of interest on which is calculated on the basis ofthe Prime Rate, the interest thereon shall be calculated on the basis of a 365-(or 366-, as the case may be) day year for the actual days elapsed.  The Administrative Agent shall as soon aspracticable notify the Borrower and the relevant Lenders of each determinationof a Eurodollar Rate.  Any change in theinterest rate on a Loan resulting from a change in the Base Rate or theEurocurrency Reserve Requirements shall become effective as of the opening ofbusiness on the day on which such change becomes effective.  The Administrative Agent shall as soon aspracticable notify the Borrower and the relevant Lenders of the effective dateand the amount of each such change in interest rate.

 

(b)   Each determination of an interest rate by theAdministrative Agent pursuant to any provision of this Agreement shall beconclusive and binding on the Borrower and the Lenders in the absence ofmanifest error.  The Administrative Agentshall, at the request of the Borrower, deliver to the Borrower a statementshowing the quotations used by the Administrative Agent in determining anyinterest rate pursuant to Section 4.5(a).

 

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4.7.          Inability to Determine Interest Rate.  If prior to the first day of any InterestPeriod:

 

(a)   the Administrative Agent shall have reasonablydetermined (which determination shall be conclusive and binding upon theBorrower) that, by reason of circumstances affecting the relevant market,adequate and reasonable means do not exist for ascertaining the Eurodollar Ratefor such Interest Period, or

 

(b)   the Administrative Agent shall have receivednotice from the Majority Facility Lenders in respect of the relevant Facilitythat the Eurodollar Rate determined or to be determined for such InterestPeriod will not adequately and fairly reflect the cost to such Lenders (asconclusively certified by such Lenders in their reasonable discretion) ofmaking or maintaining their affected Loans during such Interest Period,

 

theAdministrative Agent shall give telecopy or telephonic notice thereof to theBorrower and the relevant Lenders as soon as practicable thereafter.  If such notice is given (x) any EurodollarLoans under the relevant Facility requested to be made on the first day of suchInterest Period shall be made as Base Rate Loans, (y) any Loans under therelevant Facility that were to have been converted on the first day of suchInterest Period to Eurodollar Loans shall be continued as Base Rate Loans and(z) any outstanding Eurodollar Loans under the relevant Facility shall beconverted, on the last day of the then-current Interest Period, to Base RateLoans.  Until such condition no longerexists, as determined by the Administrative Agent, no further Eurodollar Loansunder the relevant Facility shall be made or continued as such, nor shall theBorrower have the right to convert Loans under the relevant Facility toEurodollar Loans.

 

4.8.          Pro Rata Treatment and Payments.  (a) Each borrowing by the Borrower from the Lenders hereunder, each paymentby the Borrower on account of any commitment fee and any reduction of theCommitments of the Lenders shall be made pro rata according to the respectiveTerm Percentages or Revolving Percentages, as the case may be, of the relevantLenders.

 

(b)   Each payment (including each prepayment) bythe Borrower on account of principal of and interest on the Term Loans shall bemade pro rata according to the respective outstanding principalamounts of the Term Loans then held by the Term Lenders (except as otherwiseprovided in Section 4.2(f)).  The amountof each principal prepayment of the Term Loans shall be applied to reduce thethen remaining installments of the Term Loans pro rata based uponthe then remaining principal amount thereof. Amounts prepaid on account of the Term Loans may not be reborrowed.

 

(c)   Each payment (including each prepayment) bythe Borrower on account of principal of and interest on the Revolving Loansshall be made pro rata according to the respective outstandingprincipal amounts of the Revolving Loans then held by the Revolving Lenders.

 

(d)   All payments (including prepayments) to bemade by the Borrower hereunder, whether on account of principal, interest, feesor otherwise, shall be made without setoff or counterclaim and shall be madeprior to 2:00 P.M., New York City time, on the due date thereof to theAdministrative Agent, for the account of the Lenders, at the Funding Office, inDollars and in immediately available funds. The Administrative Agent shall distribute such payments to the

 

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Lenders promptly upon receiptin like funds as received.  If anypayment hereunder (other than payments on the Eurodollar Loans) becomes due andpayable on a day other than a Business Day, such payment shall be extended tothe next succeeding Business Day.  If anypayment on a Eurodollar Loan becomes due and payable on a day other than aBusiness Day, the maturity thereof shall be extended to the next succeedingBusiness Day unless the result of such extension would be to extend suchpayment into another calendar month, in which event such payment shall be madeon the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to thepreceding two sentences, interest thereon shall be payable at the then applicablerate during such extension.

 

(e)   Unless the Administrative Agent shall havebeen notified in writing by any Lender prior to a borrowing that such Lenderwill not make the amount that would constitute its share of such borrowingavailable to the Administrative Agent, the Administrative Agent may assume thatsuch Lender is making such amount available to the Administrative Agent, andthe Administrative Agent may, in reliance upon such assumption, make availableto the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by therequired time on the Borrowing Date therefor, such Lender shall pay to theAdministrative Agent, on demand, such amount with interest thereon at a rateequal to the greater of (i) the Federal Funds Effective Rate and (ii) a ratedetermined by the Administrative Agent in accordance with banking industryrules on interbank compensation for the period until such Lender makes suchamount immediately available to the Administrative Agent.  A certificate of the Administrative Agentsubmitted to any Lender with respect to any amounts owing under this paragraphshall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing isnot made available to the Administrative Agent by such Lender within threeBusiness Days of such Borrowing Date, the Administrative Agent shall also beentitled to recover such amount with interest thereon at the rate per annumapplicable to Base Rate Loans under the relevant Facility, on demand, from theBorrower.

 

(f)    Unless the Administrative Agent shall havebeen notified in writing by the Borrower prior to the date of any payment dueto be made by the Borrower hereunder that the Borrower will not make suchpayment to the Administrative Agent, the Administrative Agent may assume thatthe Borrower is making such payment, and the Administrative Agent may, butshall not be required to, in reliance upon such assumption, make available tothe Lenders their respective pro rata shares of a correspondingamount.  If such payment is not made tothe Administrative Agent by the Borrower within three Business Days after suchdue date, the Administrative Agent shall be entitled to recover, on demand,from each Lender to which any amount which was made available pursuant to thepreceding sentence, such amount with interest thereon at the rate per annumequal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit therights of the Administrative Agent or any Lender against the Borrower.

 

4.9.          Requirements of Law. (a)  If the adoption of or anychange in any Requirement of Law or in the interpretation or applicationthereof or compliance by any Lender with any request or directive (whether ornot having the force of law) from any central bank or other GovernmentalAuthority made subsequent to the date hereof:

 

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(i)            shallsubject any Lender to any tax of any kind whatsoever with respect to thisAgreement, any Letter of Credit, any Application or any Eurodollar Loan made byit, or change the basis of taxation of payments to such Lender in respectthereof (except for Non-Excluded Taxes covered by Section 4.10 and changes inthe rate of tax on the overall net income of such Lender);
 
(ii)           shallimpose, modify or hold applicable any reserve, special deposit, compulsory loanor similar requirement against assets held by, deposits or other liabilities inor for the account of, advances, loans or other extensions of credit by, or anyother acquisition of funds by, any office of such Lender that is not otherwiseincluded in the determination of the Eurodollar Rate hereunder; or
 
(iii)          shallimpose on such Lender any other condition;
 

and the resultof any of the foregoing is to increase the cost to such Lender, by an amountthat such Lender reasonably deems to be material, of making, converting into,continuing or maintaining Eurodollar Loans or issuing or participating inLetters of Credit, or to reduce any amount receivable hereunder in respectthereof, then, in any such case, the Borrower shall, within ten Business Daysafter receiving written notice from such Lender setting forth in reasonabledetail such cost, pay such Lender, upon its demand, any additional amountsnecessary to compensate such Lender for such increased cost or reduced amountreceivable.  If any Lender becomesentitled to claim any additional amounts pursuant to this paragraph, it shallpromptly notify the Borrower (with a copy to the Administrative Agent) of theevent by reason of which it has become so entitled.

 

(b)   If any Lender shall have determined that theadoption of or any change in any Requirement of Law regarding capital adequacyor in the interpretation or application thereof or compliance by such Lender orany Person controlling such Lender with any request or directive regardingcapital adequacy (whether or not having the force of law) from any GovernmentalAuthority made subsequent to the date hereof shall have the effect of reducingthe rate of return on such Lender’s or such Person’s capital as a consequenceof its obligations hereunder or under or in respect of any Letter of Credit toa level below that which such Lender or such Person could have achieved but forsuch adoption, change or compliance (taking into consideration such Lender’s orsuch Person’s policies with respect to capital adequacy) by an amountreasonably deemed by such Lender to be material, then from time to time, withinten Business Days after submission by such Lender to the Borrower (with a copyto the Administrative Agent) of a written request therefor setting forth suchamount in reasonable detail, the Borrower shall pay to such Lender suchadditional amount or amounts as will compensate such Lender or such corporationfor such reduction.

 

(c)   A certificate as to any additional amountspayable pursuant to this Section submitted by any Lender to the Borrower (witha copy to the Administrative Agent) shall be conclusive in the absence ofmanifest error.  Notwithstanding anythingto the contrary in this Section, the Borrower shall not be required tocompensate a Lender pursuant to this Section for any amounts incurred more thansix months prior to the date that such Lender notifies the Borrower of suchLender’s intention to claim compensation therefor; provided that, if the

 

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circumstances giving rise tosuch claim have a retroactive effect, then such six-month period shall beextended to include the period of such retroactive effect.  The obligations of the Borrower pursuant tothis Section shall survive the termination of this Agreement and the payment ofthe Loans and all other amounts payable hereunder.

 

4.10.        Taxes.  (a)  All payments made by or on behalf of theBorrower under this Agreement or any other Loan Document shall be made free andclear of, and without deduction or withholding for or on account of, anypresent or future income, stamp or other taxes, levies, imposts, duties,charges, fees, deductions or withholdings, now or hereafter imposed, levied,collected, withheld or assessed by any Governmental Authority, excluding netincome taxes, branch profit taxes imposed by the United States and franchisetaxes (imposed in lieu of net income taxes) imposed on any Agent or any Lenderas a result of a present or former connection between such Agent or such Lenderand the jurisdiction of the Governmental Authority imposing such tax or anypolitical subdivision or taxing authority thereof or therein (other than anysuch connection arising solely from such Agent or such Lender having executed,delivered or performed its obligations or received a payment under, orenforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,imposts, duties, charges, fees, deductions or withholdings (“Non-ExcludedTaxes”) or Other Taxes are required to be withheld from any amounts payableto any Agent or any Lender hereunder, the amounts so payable to such Agent orsuch Lender shall be increased to the extent necessary to yield to such Agentor such Lender (after payment of all Non-Excluded Taxes and Other Taxes)interest or any such other amounts payable hereunder at the rates or in theamounts specified in this Agreement, provided, however, that the Borrower shallnot be required to increase any such amounts payable to any Lender with respectto any Non-Excluded Taxes (i) that are attributable to such Lender’s failure tocomply with the requirements of paragraph (e) or (f) of this Section or (ii)that are United States withholding taxes imposed on amounts payable to suchLender at the time such Lender becomes a party to this Agreement, except to theextent that such Lender’s assignor (if any) was entitled, at the time ofassignment, to receive additional amounts from the Borrower with respect tosuch Non-Excluded Taxes pursuant to this paragraph.  The Borrower shall make (or cause to be made)any required deduction or withholding and pay (or cause to be paid) the fullamount deducted or withheld to the relevant Governmental Authority inaccordance with applicable law.

 

(b)   In addition, the Borrower shall pay any OtherTaxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)   Whenever any Non-Excluded Taxes or OtherTaxes are payable by the Borrower, as promptly as possible thereafter theBorrower shall send to the Administrative Agent for its own account or for theaccount of the relevant Agent or Lender, as the case may be, a certified copyof an original official receipt received by the Borrower showing paymentthereof.  If the Borrower fails to payany Non-Excluded Taxes or Other Taxes when due to the appropriate taxingauthority or fails to remit to the Administrative Agent the required receiptsor other required documentary evidence, the Borrower shall indemnify the Agentsand the Lenders for any incremental taxes, interest or penalties that maybecome payable by any Agent or any Lender as a result of any such failure.

 

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(d)   The Borrower shall indemnify theAdministrative Agent and any Lender for the full amount of Non-Excluded Taxes(to the extent the Borrower would be required to pay additional amounts withrespect to such Non-Excluded Taxes pursuant to Section 4.10(a)) or Other Taxesarising in connection with payments made under this Agreement (including,without limitation, any Non-Excluded Taxes or Other Taxes imposed by anyjurisdiction on amounts payable under this Section 4.10) or any other LoanDocument paid by such Agent or Lender or any of their respective Affiliates andany liability (including penalties, additions to tax, interest and expenses)arising therefrom or with respect thereto, whether or not such Non-ExcludedTaxes or Other Taxes were correctly or legally asserted.  Payment under this indemnification shall bemade within ten days from the date the Administrative Agent or any Lender orany of their respective Affiliates makes written demand therefor; provided,that the Borrower shall not be required to indemnify the Administrative Agentor any Lender pursuant to this Section 4.10(d) for any amounts incurred morethan six months prior to the date the Administrative Agent or such Lender makessuch written demand therefor; provided further that if thecircumstance giving rise to such claim have a retroactive effect, then such sixmonth period shall be extended to include such period of retroactive effect.

 

(e)   Each Lender (or Transferee) that is not a“U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S.Lender”) shall deliver to the Borrower and the Administrative Agent (or, inthe case of a Participant, to the Lender from which the related participationshall have been purchased) two copies of either U.S. Internal Revenue ServiceForm W-8BEN and/or Form W-8 IMY, as applicable (claiming benefits of anapplicable tax treaty) or Form W-8ECI, or, in the case of a Non-U.S. Lenderclaiming exemption from U.S. federal withholding tax under Section 871(h) or881(c) of the Code with respect to payments of “portfolio interest”, astatement substantially in the form of Exhibit G and a Form W-8BEN, or in eachcase any subsequent versions thereof or successors thereto, properly completedand duly executed by such Non-U.S. Lender claiming complete exemption from, ora reduced rate of, U.S. federal withholding tax on all payments by the Borrowerunder this Agreement and the other Loan Documents.  Such forms shall be delivered by each Non-U.S.Lender on or before the date it becomes a party to this Agreement (or, in thecase of any Participant, on or before the date such Participant purchases therelated participation).  In addition,each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence orinvalidity of any form previously delivered by such Non-U.S. Lender including,but not limited to, as a result of any change in applicable law, regulation ortreaty, or in any official application or interpretation thereof.  Each Non-U.S. Lender shall promptly notifythe Borrower at any time it determines that it is no longer in a position toprovide any previously delivered certificate to the Borrower (or any other formof certification adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of thisparagraph, a Non-U.S. Lender shall not be required to deliver any form pursuantto this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

(f)    A Lender that is entitled to an exemptionfrom or reduction of non-U.S. withholding tax under the law of the jurisdictionin which the Borrower is located, or any treaty to which such jurisdiction is aparty, with respect to payments under this Agreement shall deliver to theBorrower (with a copy to the Administrative Agent), at the time or timesprescribed by applicable law and as reasonably requested in writing by theBorrower, such properly completed

 

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and executed documentationprescribed by applicable law as will permit such payments to be made withoutwithholding or at a reduced rate, provided that such Lender is legallyentitled to complete, execute and deliver such documentation and in suchLender’s judgment such completion, execution or submission would not materiallyprejudice the legal position of such Lender.

 

(g)   If any AdministrativeAgent or any Lender determines, in its sole discretion, that it has received arefund of any Non-Excluded Taxes or Other Taxes as to which it has beenindemnified by the Borrower or with respect to which the Borrower has paidadditional amounts pursuant to this Section 4.10, it shall pay over such refundto the Borrower (but only to the extent of indemnity payments made, oradditional amounts paid, by the Borrower under this Section 4.10 with respectto the Non-Excluded Taxes or Other Taxes giving rise to such refund), net ofall out-of-pocket expenses of such Agent or such Lender and without interest(other than any interest paid by the relevant Governmental Authority withrespect to such refund); provided, that the Borrower, upon the requestof such Agent or such Lender, agrees to repay the amount paid over to theBorrower (plus any penalties, interest or other charges imposed by the relevantGovernmental Authority) to such Agent or such Lender in the event such Agent orsuch Lender is required to repay such refund to such GovernmentalAuthority.  This paragraph shall not beconstrued to require any Agent or any Lender to make available its tax returns(or any other information relating to its taxes which it deems confidential) tothe Borrower or any other Person.

 

(h)   For purposes of this Section 4.10, in thecase of any Lender that is treated as a partnership for U.S. federal income taxpurposes, any Non-Excluded Taxes or Other Taxes required to be deducted andwithheld by such Lender with respect to payments made by the Borrower under anyLoan Document shall be treated as Non-Excluded Taxes or Other Taxes required tobe deducted by the Borrower, but only to the extent such Non-Excluded Taxes orOther Taxes would have been required to be deducted and withheld by the Lenderif the Lender were treated as a corporation for U.S. federal income taxpurposes making such payments under the Loan Documents on behalf of theBorrower.

 

(i)    The agreements in this Section shall survivethe termination of this Agreement and the payment of the Loans and all otheramounts payable hereunder.

 

4.11.        Indemnity.  TheBorrower agrees to indemnify each Lender and to hold each Lender harmless fromany loss or expense that such Lender may sustain or incur as a consequence of(a) default by the Borrower in making a borrowing of, conversion into orcontinuation of Eurodollar Loans after the Borrower has given a noticerequesting the same in accordance with the provisions of this Agreement (unlessEurodollar Loans are made unavailable to the Borrower pursuant to Section 4.7or 4.15), (b) default by the Borrower in making any prepayment of or conversionfrom Eurodollar Loans after the Borrower has given a notice thereof inaccordance with the provisions of this Agreement or (c) the making of aprepayment of Eurodollar Loans on a day that is not the last day of an InterestPeriod with respect thereto.  Suchindemnification may include an amount equal to the excess, if any, of (i) the amountof interest that would have accrued on the amount so prepaid, or not soborrowed, converted or continued, for the period from the date of suchprepayment or of such failure to borrow, convert or continue

 

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to the last day of such Interest Period (or, in the case of a failureto borrow, convert or continue, the Interest Period that would have commencedon the date of such failure) in each case at the applicable rate of interestfor such Loans provided for herein (excluding, however, the Applicable Marginincluded therein, if any) minus (ii) the amount of interest (asreasonably determined by such Lender) that would have accrued to such Lender onsuch amount by placing such amount on deposit for a comparable period withleading banks in the interbank eurodollar market.  A certificate as to any amounts payablepursuant to this Section submitted to the Borrower by any Lender shall containcalculation of such amount in reasonable detail and shall be conclusive in theabsence of manifest error.  This covenantshall survive the termination of this Agreement and the payment of the Loansand all other amounts payable hereunder.

 

4.12.        Change of Lending Office.  Each Lender agrees that, upon the occurrenceof any event giving rise to the operation of Section 4.9, 4.10 or 4.15 withrespect to such Lender, it will, if requested by the Borrower, use reasonableefforts (subject to overall policy considerations of such Lender) to designateanother lending office for any Loans affected by such event with the object ofavoiding the consequences of such event; provided, that such designation ismade on terms that, in the reasonable judgment of such Lender, cause suchLender and its lending office(s) to suffer no economic, legal or regulatorydisadvantage, and provided, further, that nothing in this Section shall affector postpone any of the obligations of the Borrower or the rights of any Lenderpursuant to Section 4.9, 4.10 or 4.15.

 

4.13.        Replacement of Lenders. The Borrower shall be permitted to replace any Lender that (a) requestsreimbursement for amounts owing pursuant to Section 4.9 or 4.10, (b) defaultsin its obligation to make Loans hereunder, or (c) declines to deliver anyrequired consent to a proposed waiver or modification of any provision of theLoan Documents as contemplated by Section 11.1 that has been consented to bythe Borrower, Administrative Agent, Required Lenders and, if otherwiserequired, Majority Facility Lenders, with a replacement financial institution(which replacement institution in the case of clause (c) is willing to deliversuch consent); provided that (i) such replacement does not conflict with anyRequirement of Law, (ii) no Event of Default shall have occurred and becontinuing at the time of such replacement, (iii) prior to any suchreplacement, such Lender shall have taken no action under Section 4.12 so as toeliminate the continued need for payment of amounts owing pursuant to Section4.9 or 4.10, (iv) the replacement financial institution shall purchase, at par,all Loans and other amounts owing to such replaced Lender on or prior to thedate of replacement, (v) the Borrower shall be liable to such replaced Lenderunder Section 4.11 if any Eurodollar Loan owing to such replaced Lender shallbe purchased other than on the last day of the Interest Period relatingthereto, (vi) the replacement financial institution, if not already a Lender,shall be reasonably satisfactory to the Administrative Agent, (vii) thereplaced Lender shall be obligated to make such replacement in accordance withthe provisions of Section 11.6 (provided that the Borrower shall be obligatedto pay the registration and processing fee referred to therein), (viii) untilsuch time as such replacement shall be consummated, the Borrower shall pay alladditional amounts (if any) required pursuant to Section 4.9 or 4.10, as thecase may be, and (ix) any such replacement shall not be deemed to be awaiver of any rights that the Borrower, the Administrative Agent or any otherLender shall have against the replaced Lender.

 

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4.14.        Evidence of Debt. (a)  Each Lender shall maintain inaccordance with its usual practice an account or accounts evidencingIndebtedness of the Borrower to such Lender resulting from each Loan of suchLender from time to time, including the amounts of principal and interestpayable and paid to such Lender from time to time under this Agreement.

 

(b)   The Administrative Agent, on behalf of theBorrower, shall maintain the Register pursuant to Section 11.6(b), and asubaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder andany Note evidencing such Loan, the Type of such Loan and each Interest Periodapplicable thereto, (ii) the amount ofany principal or interest due and payable or to become due and payable from theBorrower to each Lender hereunder and (iii)both the amount of any sum received by the Administrative Agent hereunder fromthe Borrower and each Lender’s share thereof.

 

(c)   The entries made in the Register and theaccounts of each Lender maintained pursuant to Section 4.14(a) shall, to theextent permitted by applicable law, be prima facie evidence ofthe existence and amounts of the obligations of the Borrower therein recorded; provided,however, that the failure of any Lender or the Administrative Agent tomaintain the Register or any such account, or any error therein, shall not inany manner affect the obligation of the Borrower to repay (with applicableinterest) the Loans made to the Borrower by such Lender in accordance with theterms of this Agreement.

 

(d)   The Borrower agrees that, upon the request tothe Administrative Agent by any Lender, the Borrower will execute and deliverto such Lender a promissory note of the Borrower evidencing any Term Loans,Revolving Credit Loans or Swingline Loans, as the case may be, of such Lender,substantially in the forms of Exhibit H-1, H-2 or H-3, respectively, withappropriate insertions as to date and principal amount.

 

4.15.        Illegality. Notwithstanding any other provision herein, if the adoption of or anychange in any Requirement of Law or in the interpretation or applicationthereof shall make it unlawful for any Lender to make or maintain EurodollarLoans as contemplated by this Agreement, (a)the commitment of such Lender hereunder to make Eurodollar Loans, continueEurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shallforthwith be suspended until such time as such condition no longer exists, asdetermined by the Administrative Agent and (b)such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall beconverted automatically to Base Rate Loans on the respective last days of thethen current Interest Periods with respect to such Loans or within such earlierperiod as required by law.  If any suchconversion of a Eurodollar Loan occurs on a day which is not the last day ofthe then current Interest Period with respect thereto, the Borrower shall payto such Lender such amounts, if any, as may be required pursuant to Section4.11.

 

SECTION 5.  REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enterinto this Agreement and to make the Loans and issue or participate in theLetters of Credit, Holdings and the Borrower hereby jointly and severallyrepresent and warrant to each Agent and each Lender that:

 

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5.1.          Financial Condition. (a)  The unaudited pro formaconsolidated balance sheet of Holdings and its consolidated Subsidiaries as atDecember 31, 2005 (including the notes thereto) (the “Pro Forma BalanceSheet”), copies of which have heretofore been furnished to each Lender, hasbeen prepared giving effect (as if such events had occurred on such date) to(i) the Loans to be made on the Restatement Date and the use of proceeds thereofand (ii) the payment of fees and expenses in connection with theforegoing.  The Pro Forma Balance Sheetpresents fairly in all material respects on a pro forma basis the estimatedfinancial position of Holdings and its consolidated Subsidiaries as at December31, 2005, assuming that the events specified in the preceding sentence hadactually occurred at such date.

 

(b)   The audited consolidated balance sheets ofHoldings as at December 31, 2005, December 31, 2004 and December 31, 2003, andthe related consolidated statements of income and of cash flows for the fiscalyears ended on such dates (including any related schedules and notes thereto),reported on by and accompanied by a report from Deloitte & Touche LLP,present fairly in all material respects the consolidated financial condition ofHoldings as at such date, and the consolidated results of its operations andits consolidated cash flows for the respective fiscal years then ended.  All such financial statements, including anyrelated schedules and notes thereto, have been prepared in accordance with GAAPapplied consistently throughout the periods involved (except as disclosedtherein). As of the Restatement Date, no Group Member has any materialGuarantee Obligations, contingent liabilities and liabilities for taxes, or anylong-term leases or unusual forward or long-term commitments, including anyinterest rate or foreign currency swap or exchange transaction or otherobligation in respect of derivatives, that are not reflected in the most recentfinancial statements referred to in this paragraph.  During the period from December 31, 2005 toand including the date hereof there has been no Disposition by Holdings or anyof its Subsidiaries of any material part of its business or property.

 

5.2.          No Change.  Asof the Restatement Date, since December 31, 2004, there has been nodevelopment, event or circumstance that, individually or in the aggregate, hashad or could reasonably be expected to have a Material Adverse Effect.

 

5.3.          Corporate Existence; Compliance with Law.  Each Group Member (a) is duly organized,validly existing and in good standing under the laws of the jurisdiction of itsorganization, (b) has the power and authority, and the legal right, to own andoperate its property, to lease the property it operates as lessee and toconduct the business in which it is currently engaged, (c) is duly qualified asa foreign corporation and in good standing under the laws of each jurisdictionwhere its ownership, lease or operation of property or the conduct of itsbusiness requires such qualification except in jurisdictions where the failureto be so qualified or in good standing could not reasonably be expected to havea Material Adverse Effect. and (d) is in compliance with all Requirements of Lawexcept to the extent that the failure to comply therewith could not,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect.

 

5.4.          Power; Authorization; Enforceable Obligations.  Each Loan Party has the power and authority,and the legal right, to make, deliver and perform the Loan Documents to whichit is a party and, in the case of the Borrower, to obtain extensions of credithereunder.  Each Loan Party has taken allnecessary organizational action to authorize the execution,

 

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delivery and performance of the Loan Documents to which it is a partyand, in the case of the Borrower, to authorize the extensions of credit on theterms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act byor in respect of, any Governmental Authority or any other Person is required inconnection with the extensions of credit hereunder or with the execution,delivery, performance, validity or enforceability of this Agreement or any ofthe Loan Documents, except (i) consents, authorizations, filings and noticesdescribed in Schedule 5.4, which consents, authorizations, filings and noticeshave been obtained or made and are in full force and effect, (ii) the filingsreferred to in Section 5.19 and (iii) those consents, authorizations, filingsand notices the failure of which to make or obtain, individually or in theaggregate, could not reasonably be expected to result in a Material Adverse Effect.  Each Loan Document has been duly executed anddelivered on behalf of each Loan Party thereto. This Agreement constitutes, and each other Loan Document upon executionwill constitute, a legal, valid and binding obligation of each Loan Partythereto, enforceable against each such Loan Party in accordance with its terms,except as enforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally and by general equitable principles (whetherenforcement is sought by proceedings in equity or at law).

 

5.5.          No Legal Bar. The execution, delivery and performance of this Agreement and the otherLoan Documents, the issuance of Letters of Credit, the borrowings hereunder andthe use of the proceeds thereof will not violate any Requirement of Law or anymaterial Contractual Obligation of any Group Member and will not result in, orrequire, the creation or imposition of any Lien on any of their respectiveproperties or revenues pursuant to any Requirement of Law or any suchContractual Obligation (other than the Liens created by the SecurityDocuments).  No Requirement of Law orContractual Obligation (assuming no defaults thereunder) applicable to theBorrower or any of its Subsidiaries could, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

5.6.          Litigation.  Nolitigation, investigation or proceeding of or before any arbitrator orGovernmental Authority is pending or, to the knowledge of Holdings or theBorrower, threatened by or against any Group Member or against any of theirrespective properties or revenues (a) with respect to any of the Loan Documentsor any of the transactions contemplated hereby or thereby or (b) that, ifadversely determined or settled, could reasonably be expected to have aMaterial Adverse Effect.

 

5.7.          No Default.  NoGroup Member is in default under or with respect to any of its ContractualObligations in any respect that could, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

5.8.          Ownership of Property; Liens.  Each Group Member has good and marketabletitle in fee simple to, or a valid leasehold interest in, all its realproperty, including the Properties, and good title to, or a valid leaseholdinterest in, all its other material property, and none of such property issubject to any Lien except as permitted by Section 8.3.

 

5.9.          Intellectual Property. Except as could not, individually or in the aggregate, reasonably beexpected to have a Material Adverse Effect, each Group Member owns,

 

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or is licensed to use, all Intellectual Property necessary for theconduct of its business as currently conducted. No material claim has beenasserted and is pending by any Person challenging or questioning the use of anyIntellectual Property or the validity or effectiveness of any IntellectualProperty, nor does Holdings or the Borrower know of any valid basis for anysuch claim.  The use of IntellectualProperty by each Group Member does not infringe on the rights of any Person inany material respect.

 

5.10.        Taxes.  Each GroupMember has filed or caused to be filed all Federal and State income tax returnsand all other material tax returns that are required to be filed and has paidall taxes shown to be due and payable on said returns or on any assessmentsmade against it or any of its Property and all other taxes, fees or othercharges imposed on it or any of its property by any Governmental Authority(other than (a) any the amount or validity of which are currently beingcontested in good faith by appropriate proceedings and with respect to whichreserves in conformity with GAAP have been provided on the books of Holdings,the Borrower or its Subsidiaries, as the case may be or (b) if the failure topay would not, individually or in the aggregate, reasonably be expected to havea Material Adverse Effect).

 

5.11.        Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credithereunder, will be used for “buying” or “carrying” any “margin stock” withinthe respective meanings of each of the quoted terms under Regulation U as nowand from time to time hereafter in effect or for any purpose that violates theprovisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the Borrowerwill furnish to the Administrative Agent and each Lender a statement to theforegoing effect in conformity with the requirements of FR Form G-3 or FR FormU-1, as applicable, referred to in Regulation U.

 

5.12.        Labor Matters. Except as, individually or in the aggregate, could not reasonably beexpected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes against any GroupMember pending or, to the knowledge of Holdings or the Borrower, threatened;(b) hours worked by and payment made to employees of each Group Member have notbeen in violation of the Fair Labor Standards Act or any other applicableRequirement of Law dealing with such matters; and (c) all payments due from anyGroup Member on account of employee health and welfare insurance have been paidor accrued as a liability on the books of the relevant Group Member.

 

5.13.        ERISA.  Neither aReportable Event nor an “accumulated funding deficiency” (within the meaning ofSection 412 of the Code or Section 302 of ERISA) has occurred during thefive-year period prior to the date on which this representation is made ordeemed made with respect to any Single Employer Plan, and each Plan hascomplied in all material respects with the applicable provisions of ERISA andthe Code except where failure to do so would cause a liability which would notbe material.  No termination of a SingleEmployer Plan has occurred, and no Lien in favor of the PBGC or a Plan hasarisen, during such five-year period. The present value of all accrued benefits under each Single EmployerPlan (based on those assumptions used to fund such Plans) did not, as of thelast annual valuation date prior to the date on which this representation ismade or deemed made, exceed the value of the assets of such Plan allocable tosuch accrued benefits by a material amount. Neither the Borrower nor any

 

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Commonly Controlled Entity has had a complete or partial withdrawalfrom any Multiemployer Plan that has resulted or could reasonably be expectedto result in a material liability under ERISA, and neither the Borrower nor anyCommonly Controlled Entity would become subject to any material liability underERISA if the Borrower or any such Commonly Controlled Entity were to withdrawcompletely from all Multiemployer Plans as of the valuation date most closelypreceding the date on which this representation is made or deemed made.  To the knowledge of the Borrower after dueinquiry, no such Multiemployer Plan is in Reorganization or Insolvent.

 

5.14.        Investment Company Act; Other Regulations.  No Loan Party is an “investment company”, ora company “controlled” by an “investment company”, required to be registered assuch within the meaning of the Investment Company Act of 1940, as amended.  No Loan Party is subject to regulation underany Requirement of Law (other than Regulation X of the Board) that limits itsability to incur Indebtedness.

 

5.15.        Subsidiaries. Except as disclosed to the Administrative Agent by the Borrower inwriting from time to time after the Closing Date, (a) Schedule 5.15 sets forth the name and jurisdiction ofincorporation of each Subsidiary and, as to each such Subsidiary, thepercentage of each class of Capital Stock owned by any Loan Party and (b) there are no outstanding subscriptions,options, warrants, calls, rights or other agreements or commitments (other thanstock options and other equity awards granted to employees or directors anddirectors’ qualifying shares) of any nature relating to any Capital Stock ofthe Borrower or any Subsidiary, except as created by the Loan Documents.

 

5.16.        Use of Proceeds. The proceeds of the Term Loans shall be used to repay in full theRefinanced Indebtedness and to pay related fees and expenses.  In addition, a portion of the remainingproceeds may be used to pay dividends to equityholders of Holdings and to payspecial bonuses to members of management of the Borrower or Holdings inconnection with the payment of such dividends pursuant to Sections 8.6(d) and(e), in each case within thirty days of the Restatement Date.  The proceeds of the Revolving Loans shall beused, together with the proceeds of the Swingline Loans and the Letters ofCredit, for general corporate purposes.

 

5.17.        Environmental Matters. Except as, individually or in the aggregate, would not reasonably beexpected to have a Material Adverse Effect:

 

(a)   the facilities and properties owned, leasedor operated by any Group Member (the “Properties”) do not contain, andhave not previously contained, any Materials of Environmental Concern inamounts or concentrations or under circumstances that constitute or constituteda violation of, or could give rise to liability under, any Environmental Law;

 

(b)   no Group Member has received or is aware ofany actual or threatened notice of violation, alleged violation,non-compliance, liability or potential liability regarding environmentalmatters or compliance with Environmental Laws with regard to any of theProperties or the business operated by any Group Member (the “Business”),nor does Holdings or the Borrower have knowledge or reason to believe that anysuch notice will be received or is being threatened;

 

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(c)   no judicial proceeding or governmental oradministrative action is pending or, to the knowledge of Holdings and theBorrower, threatened, under any Environmental Law to which any Group Member isor will be named as a party with respect to the Properties or the Business, norare there any consent decrees or other decrees, consent orders, administrativeorders or other orders, or other administrative or judicial requirementsoutstanding under any Environmental Law with respect to the Properties or theBusiness;

 

(d)   the Properties and all operations at theProperties are in compliance, and have in the last five years been incompliance, with all applicable Environmental Laws, and there is nocontamination at, under or about the Properties or violation of anyEnvironmental Law with respect to the Properties or the Business; and

 

(e)   no Group Member has assumed any liability ofany other Person under Environmental Laws.

 

5.18.        Accuracy of Information, etc.  No statement or information contained in thisAgreement, any other Loan Document, the Confidential Information Memorandum,the Lender Presentation or any other document, certificate or statement(excluding any projections, proforma financial information or estimates)furnished by or on behalf of any Loan Party to the Administrative Agent or theLenders, or any of them, for use in connection with the transactionscontemplated by this Agreement or the other Loan Documents, taken as a whole,contained as of the date such statement, information, document or certificatewas so furnished (or, in the case of the Confidential Information Memorandum,as of the Closing Date, and in the case of the Lender Presentation, as of theRestatement Date), any untrue statement of a material fact or omitted to statea material fact necessary to make the statements contained herein or thereinnot misleading.  The projections and proforma financial information contained in the materials referenced above arebased upon good faith estimates and assumptions believed by management of theBorrower to be reasonable at the time made, it being recognized by the Lendersthat such financial information as it relates to future events is not to beviewed as fact and that actual results during the period or periods covered bysuch financial information may differ from the projected results set forththerein by a material amount.  As of theRestatement Date, there is no fact known to any Loan Party that could,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect that has not been expressly disclosed herein, in the other LoanDocuments, in the Confidential Information Memorandum, the Lender Presentationor in any other documents, certificates and statements furnished to theAdministrative Agent and the Lenders for use in connection with thetransactions contemplated hereby and by the other Loan Documents.

 

5.19.        Security Documents. (a)  The Guarantee and CollateralAgreement is effective to create in favor of the Administrative Agent, for thebenefit of the Secured Parties, a legal, valid and enforceable (except asenforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally and by general equitable principles (whetherenforcement is sought by proceedings in equity or at law)) security interest inthe Collateral described therein and proceeds and products thereof.  In the case of the Pledged Stock described inthe Guarantee and Collateral Agreement, when stock certificates representingsuch Pledged Stock are delivered to the

 

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Administrative Agent, and in the case of the other Collateral describedin the Guarantee and Collateral Agreement, when financing statements and otherfilings specified on Schedule 5.19(a) in appropriate form are filed in theoffices specified on Schedule 5.19(a), the Guarantee and CollateralAgreement shall constitute a fully perfected Lien on, and security interest in,all right, title and interest of the Loan Parties in such Collateral and theproceeds thereof, as security for the Obligations (as defined in the Guarantee andCollateral Agreement), in each case prior and superior in right to any otherPerson (except, in the case of Pledged Stock, Liens arising as a matter of lawthat do not detract from the value thereof in any material respect, and in thecase of Collateral other than Pledged Stock, Liens permitted by Section 8.3).

 

(b)   Each of the Mortgages is effective to createin favor of the Administrative Agent, for the benefit of the Secured Parties, alegal, valid and enforceable (except as enforceability may be limited byapplicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting the enforcement of creditors’ rights generally and by generalequitable principles (whether enforcement is sought by proceedings in equity orat law)) Lien on the Mortgaged Properties described therein and proceeds andproducts thereof, and when the Mortgages are filed in the offices specified onSchedule 5.19(b), each such Mortgage shall constitute a fully perfectedLien on, and security interest in, all right, title and interest of the LoanParties in the Mortgaged Properties and the proceeds thereof, as security forthe Obligations (as defined in the relevant Mortgage), in each case prior andsuperior in right to any other Person, subject to Liens permitted by Section8.3.

 

(c)   Each Intellectual Property Security Agreementis effective to create in favor of the Administrative Agent, for the benefit ofthe Secured Parties, a legal, valid and enforceable (except as enforceabilitymay be limited by applicable bankruptcy, insolvency, reorganization, moratoriumor similar laws affecting the enforcement of creditors’ rights generally and bygeneral equitable principles (whether enforcement is sought by proceedings inequity or at law)) security interest in the Intellectual Property Collateraldescribed therein and the proceeds and products thereof.  Upon the filing of (i) each IntellectualProperty Security Agreement in the appropriate indexes of the United StatesPatent and Trademark Office relative to patents and trademarks, and the UnitedStates Copyright Office relative to copyrights, together with provision forpayment of all requisite fees, and (ii) financing statements in appropriateform for filing in the offices specified on Schedule 5.19(a), each IntellectualProperty Security Agreement shall constitute a fully perfected Lien on, andsecurity interest in, all right, title and interest of the Loan Parties in theIntellectual Property Collateral and the proceeds and products thereof, assecurity for the Obligations (as defined in the Guarantee and CollateralAgreement), in each case prior and superior in right to any other Person(except Liens permitted by Section 8.3). Schedule 1.1(b) lists, as of the Restatement Date, each parcel offederally registered or recorded Intellectual Property, including IntellectualProperty for which an application or filing has been made or is pending in theUnited States, held by the Borrower and any of its Subsidiaries.

 

5.20.        Solvency.  TheLoan Parties are, on a consolidated basis, and after giving effect to theincurrence of all Indebtedness and obligations being incurred in connectionherewith will be and will continue to be, Solvent.

 

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5.21.        Designated Senior Debt. The Obligations of the Loan Parties hereunder and under the other LoanDocuments constitutes “Designated Senior Indebtedness” for purposes of theSenior Subordinated Notes, and following the consummation of the Refinancing,no other Indebtedness shall constitute “Designated Senior Indebtedness”thereunder.

 

5.22.        Regulation H.  NoMortgage encumbers improved real property that is located in an area that hasbeen identified by the Secretary of Housing and Urban Development as an areahaving special flood hazards and in which flood insurance has been madeavailable under the National Flood Insurance Act of 1968 (except anyMortgaged Properties as to which such flood insurance as required by RegulationH has been obtained and is in full force and effect as required by thisAgreement).

 

SECTION 6.  CONDITIONS PRECEDENT

 

6.1.          Conditions to Restatement Date.  The agreement of each Term Lender to make theinitial extension of credit requested to be made by it is subject to thesatisfaction or waiver, prior to or concurrently with the making of suchextension of credit on the Restatement Date, of the following conditionsprecedent:

 

(a)   Loan Documents.  All legal matters incident to this Agreementand the other Loan Documents shall be satisfactory to the Term Lenders, to theIssuing Bank and to the Administrative Agent, and the Administrative Agentshall have received (i) this Agreement, or, in the case of the TermLenders, an Addendum, executed and delivered by each Agent, Holdings, theBorrower and each Person that is a Lender on the Restatement Date and (ii) anexecuted counterpart of each other Loan Document required to be executed anddelivered on the Restatement Date.

 

In the event that any one or more Personshave not executed and delivered an Addendum on the date scheduled to be theRestatement Date (each such Person being referred to herein as a “Non-ExecutingPerson”), the condition referred to in clause (i) above shall neverthelessbe deemed satisfied if on such date the Borrower and the Administrative Agentshall have designated one or more Persons (the “Designated Lenders”) toassume, in the aggregate, all of the Commitments that would have been held bythe “Non-Executing Persons” (subject to each such Designated Lender’sconsent and its execution and delivery of an Addendum).

 

(b)   Concurrent Transactions.  The Borrower shall have delivered notice tothe Administrative Agent in accordance with the terms of Section 4.1 of theOriginal Credit Agreement stating (i) the Borrower’s intent to prepay in fullthe Existing Term Loans outstanding under the Original Credit Agreement, and(ii) that the Restatement Date shall be the effective date of such prepayment.

 

(c)   Pro Forma Balance Sheet; FinancialStatements.  The Lenders shall havereceived (i) the Pro Forma Balance Sheet, (ii) audited consolidatedfinancial statements of Holdings for the 2005, 2004 and 2003 fiscal years and(iii) unaudited interim consolidated financial statements of Holdings for eachquarterly period ended subsequent to the date of the latest applicablefinancial statements delivered pursuant to clause (ii) of this paragraph as to

 

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which such financial statementsare available, and such financial statements shall not reflect any materialadverse change in the consolidated financial condition of Holdings sinceDecember 31, 2005.

 

(d)   Approvals.  All governmental and material third partyapprovals necessary, or in the discretion of the Administrative Agent,advisable in connection with the Refinancing, the continuing operations of theGroup Members and the transactions contemplated hereby, and the consent of eachlandlord of the leased Mortgaged Properties listed on Schedule 1.1(c), shallhave been obtained and be in full force and effect, and all applicable waitingperiods shall have expired without any action being taken or threatened by anycompetent authority that would restrain, prevent or otherwise impose adverseconditions on the Refinancing or the financing contemplated hereby.

 

(e)   Lien Searches.  The Administrative Agent shall have receivedthe results of a recent lien search in each of the jurisdictions where theGroup Members are organized and where assets of the Loan Parties are located,and such search shall reveal no liens on any of the assets of the Loan Partiesexcept for Liens permitted by Section 8.3 or discharged on or prior to theRestatement Date pursuant to documentation reasonably satisfactory to theAdministrative Agent.

 

(f)    Fees. The Lenders and the Agents shall have received all fees required to bepaid, and all expenses for which invoices have been presented (including thereasonable fees and expenses of legal counsel), on or before the RestatementDate.  All such amounts will be paid withproceeds of Loans made on the Restatement Date and will be reflected in thefunding instructions given by the Borrower to the Administrative Agent on orbefore the Restatement Date.

 

(g)   Restatement Date Certificate.  The Administrative Agent shall have receiveda certificate of each Loan Party, dated the Restatement Date, substantially inthe form of Exhibit B, with appropriate insertions and attachments includingthe certificate of incorporation of each Loan Party that is a corporationcertified by the relevant authority of the jurisdiction of organization of suchLoan Party and a long form good standing certificate for each Loan Party fromits jurisdiction of organization; provided that in lieu of deliveringcertificates of incorporation for each Loan Party, Borrower may deliver acertificate of a duly authorized officer certifying that there have been nomaterial amendments to those certificates of incorporation previously deliveredto BSCL, as the Administrative Agent, in connection with Original CreditAgreement.

 

(h)   Legal Opinions.  The Lead Arranger shall have received thefollowing executed legal opinions:

 

(i)            thelegal opinion of Kirkland & Ellis LLP, counsel to the Borrower and itsSubsidiaries, substantially in the form of Exhibit E; and

 

(ii)           thelegal opinion of local counsel in each of Kansas, Florida and Maine.

 

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Each suchlegal opinion shall cover such other matters incident to the transactionscontemplated by this Agreement as the Administrative Agent may reasonablyrequire.

 

(i)    Pledged Stock; Stock Powers; PledgedNotes.  The Administrative Agentshall have received (i) the certificates representing the shares of CapitalStock pledged pursuant to the Guarantee and Collateral Agreement, together withan undated stock power for each such certificate executed in blank by a dulyauthorized officer of the pledgor thereof and (ii) each promissory note (ifany) pledged to the Administrative Agent pursuant to the Guarantee andCollateral Agreement endorsed (without recourse) in blank (or accompanied by anexecuted transfer form in blank) by the pledgor thereof.

 

(j)    Filings, Registrations and Recordings.  Each document (including any UniformCommercial Code financing statement) required by the Security Documents orunder law or reasonably requested by the Administrative Agent to be filed,registered or recorded in order to create in favor of the Administrative Agent,for the benefit of the Lenders, a perfected Lien on the Collateral describedtherein, prior and superior in right to any other Person (other than withrespect to Liens expressly permitted by Section 8.3), shall be in proper formfor filing, registration or recordation.

 

(k)   Mortgages, etc.

 

(i)              The Administrative Agent shall have receivedmodifications (the “Modifications”) to all Mortgages (as defined in theOriginal Credit Agreement) with respect to each Mortgaged Property, executedand delivered by a duly authorized officer of each party thereto in recordableform in the applicable state in which such Mortgaged Property is located.

 

(ii)           If requestedby the Administrative Agent, the Administrative Agent shall have received, andthe title insurance company issuing the policy referred to in clause (iii)below (the “Title Insurance Company”) shall have received, maps or platsof an as-built survey of the sites of the owned Mortgaged Properties (it beingunderstood that no surveys shall be required for any of the leased MortgagedProperties) certified to the Administrative Agent and the Title InsuranceCompany in a manner reasonably satisfactory to them, dated a date reasonablysatisfactory to the Administrative Agent and the Title Insurance Company by anindependent professional licensed land surveyor reasonably satisfactory to theAdministrative Agent and the Title Insurance Company, which maps or plats andthe surveys on which they are based shall be made in accordance with theMinimum Standard Detail Requirements for Land Title Surveys jointly establishedand adopted by the American Land Title Association and the American Congress onSurveying and Mapping in 1992, and, without limiting the generality of theforegoing, there shall be surveyed and shown on such maps, plats or surveys thefollowing: (A) the locations on such sites of all the buildings, structures andother improvements and the established building setback lines; (B) allexceptions set forth on Schedule B of the title insurance policies delivered inclause (iii) below; (C) the lines of streets abutting the sites and widththereof; (D) all access and other easements appurtenant to the sites; (E) allroadways, paths, driveways, easements, encroachments

 

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and overhanging projections and similar encumbrances affecting thesite, whether recorded, apparent from a physical inspection of the sites orotherwise known to the surveyor; (F) any encroachments on any adjoiningproperty by the building structures and improvements on the sites; (G) if thesite is described as being on a filed map, a legend relating the survey to saidmap; and (H) the flood zone designations, if any, in which the MortgagedProperties are located.

 

(iii)          TheAdministrative Agent shall have received in respect of each owned MortgagedProperty (it being understood that no endorsements to mortgagee title insurancepolicies shall be required for any of the leased Mortgaged Properties)endorsements to mortgagee title insurance policies or marked up unconditionalcommitment or proforma for such insurance delivered in connection with theOriginal Credit Agreement.  Each suchendorsement shall (A) be in an amount reasonably satisfactory to theAdministrative Agent; (B) be issued at ordinary rates; (C) insure that theMortgage insured thereby creates a valid first Lien on such Mortgaged Propertyfree and clear of all defects and encumbrances, except as disclosed therein andas reasonably acceptable to the Administrative Agent; (D) name theAdministrative Agent for the benefit of the Lenders as the insured thereunder;(E) be in the form of ALTA Loan Policy – 1970 (Amended 10/17/70 and 10/17/84)(or equivalent policies); (F) contain such endorsements and affirmativecoverage as the Administrative Agent may reasonably request and (G) be issuedby title companies reasonably satisfactory to the Administrative Agent (includingany such title companies acting as co-insurers or reinsurers, at the option ofthe Administrative Agent).  TheAdministrative Agent shall have received evidence reasonably satisfactory to itthat all premiums in respect of each such endorsement to any such policy, allcharges for Modification recording tax, and all related expenses, if any, havebeen paid.

 

(iv)          TheAdministrative Agent shall have received (A) a policy of flood insurance that(1) covers any parcel of improved owned real property located in a federallyrecognized flood zone that is encumbered by any Mortgage, (2) is written in anamount not less than the outstanding principal amount of the indebtednesssecured by such Mortgage that is reasonably allocable to such owned realproperty or the maximum limit of coverage made available with respect to theparticular type of property under the National Flood Insurance Actof 1968, whichever is less, and (3) has a term ending not later than thematurity of the Indebtedness secured by such Mortgage and (B) confirmation thatthe Borrower has received the notice required pursuant to Section 208(e)(3) ofRegulation H of the Board.

 

(v)           TheAdministrative Agent shall have received a copy of all recorded documentsreferred to, or listed as exceptions to title in, the title policy or policiesreferred to in clause (iii) above and a copy of all other material documentsaffecting the Mortgaged Properties.

 

(l)    Solvency Certificate.  The Lead Arranger shall have received andshall be reasonably satisfied with a solvency certificate of the chieffinancial officer of the Borrower

 

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substantially in the form ofExhibit K, which shall document the solvency of the Loan Parties after givingeffect to the Refinancing and other transactions contemplated hereby.

 

(m)  Insurance.  The Administrative Agent shall have receivedinsurance certificates satisfying the requirements of Section 5.3 of theGuarantee and Collateral Agreement.

 

(n)   Environmental.  The Administrative Agent and each Lendershall have received a Certificate and Release for Environmental Conditionsissued to the Borrower by the City of Wichita, Kansas with respect to theBorrower’s property located at 120 E. First Street, Wichita, Kansas.

 

(o)   Senior Debt.  An officer of the Borrower shall certify inwriting to the Administrative Agent that the incurrence of Indebtedness on theRestatement Date and at any time thereafter under this Agreement is permittedunder the indenture governing the Senior Subordinated Notes and that the debtso incurred will constitute Senior Debt and Designated Senior Debt under and asdefined in such indenture.

 

(p)   Non-Continuing Lenders.  The Administrative Agent shall have receivedwritten verification acceptable to it that the Lenders under the OriginalCredit Agreement that are not Continuing Lenders have been, or will be, paid infull all amounts required to be paid to them by Borrower pursuant to Section4.2(g).

 

(q)   Miscellaneous.  The Administrative Agent shall have receivedsuch other documents, agreements, certificates and information as it shallreasonably request.

 

6.2.          Conditions to Each Extension of Credit.  The agreement of each Lender to make anyextension of credit requested to be made by it on any date (including itsinitial extension of credit) is subject to the satisfaction of the followingconditions precedent:

 

(a)   No Default.  No Default or Event of Default shall haveoccurred and be continuing (both prior to, and after giving effect to suchextension of credit).

 

(b)   Representations and Warranties.  Each of the representations and warrantiesmade by any Loan Party in or pursuant to the Loan Documents shall be true andcorrect in all material respects on and as of such date as if made on and as ofsuch date, and after giving effect to the extensions of credit requested to bemade on such date, except for representations and warranties which specificallyrelate to an earlier specific date, in which case such representations andwarranties shall be true and correct in all material respects as of suchearlier date.

 

(c)  No Change.  Since December 31, 2004, there has been nodevelopment, event or circumstance that, individually or in the aggregate, hashad or could reasonably be expected to have a Material Adverse Effect.

 

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Each borrowingby and issuance of a Letter of Credit on behalf of the Borrower hereunder shallconstitute a representation and warranty by the Borrower as of the date of suchextension of credit that the conditions contained in this Section 6.2 have beensatisfied.

 

SECTION 7.  AFFIRMATIVE COVENANTS

 

Holdings and the Borrower hereby jointly andseverally agree that, so long as the Commitments remain in effect, any Letterof Credit remains outstanding (unless cash collateralized) or any Loan or otheramount (excluding contingent indemnification obligations for which no claimshave been made or obligations with respect to Hedge Agreements) is owing to anyLender or Agent hereunder, each of Holdings and the Borrower shall and shallcause each of its Subsidiaries to:

 

7.1.          Financial Statements. Furnish to the Administrative Agent:

 

(a)   as soon as available, but in any event within90 days after the end of each fiscal year of Holdings a copy of theaudited consolidated balance sheet of Holdings and its consolidatedSubsidiaries as at the end of such year and the related audited consolidatedstatements of income and of cash flows for such year, setting forth in eachcase in comparative form the figures for the previous year, reported on withouta “going concern” or like qualification or exception, or qualification arisingout of the scope of the audit, by Deloitte and Touche LLP or other independentcertified public accountants of nationally recognized standing;

 

(b)   as soon as available, but in any event notlater than 45 days after the end of each of the first three quarterly periodsof each fiscal year of Holdings, the unaudited consolidated balance sheet ofHoldings and its consolidated Subsidiaries as at the end of such quarter andthe related unaudited consolidated statements of income and of cash flows forsuch quarter and the portion of the fiscal year through the end of suchquarter, setting forth in each case in comparative form the figures for theprevious year, certified by a Responsible Officer as being fairly stated in allmaterial respects (subject to normal year-end audit adjustments and the absenceof footnotes); and

 

(c)   as soon as available, but in any event notlater than 30 days after the end of each month occurring during each fiscalyear of Holdings, calculations showing the consolidated financial status ofHoldings and its consolidated Subsidiaries, substantially in the form ofExhibit L, as at the end of such month and the portion of the fiscal yearthrough the end of such month.

 

All suchfinancial statements shall be complete and correct in all material respects andshall be prepared in reasonable detail and in accordance with GAAP appliedconsistently throughout the periods reflected therein and with prior periods(except as approved by such accountants or officer, as the case may be, anddisclosed therein, and except for such non-GAAP measurements as are required inExhibit L).

 

7.2.          Certificates; Other Information.  Furnish to the Administrative Agent and eachLender (or, in the case of clause (f), to the relevant Lender):

 

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(a)   concurrently with the delivery of thefinancial statements referred to in Section 7.1(a), a certificate of theindependent certified public accountants reporting on such financial statementsstating that in making the examination necessary therefor no knowledge wasobtained of any Default or Event of Default, except as specified in suchcertificate;

 

(b)   concurrently with the delivery of anyfinancial statements pursuant to Section 7.1(a) or (b), (i) a certificate of aResponsible Officer stating that such Responsible Officer has obtained noknowledge of any Default or Event of Default except as specified in suchcertificate and (ii) (x) a Compliance Certificate containing all informationand calculations necessary for determining compliance by each Group Member withthe provisions of Sections 8.1 and 8.7 of this Agreement referred to therein asof the last day of the fiscal quarter or fiscal year of the Borrower, as thecase may be, and, if applicable, for determining the Applicable Margins, and(y) to the extent not previously disclosed to the Administrative Agent, alisting of any federally registered or recorded Intellectual Property,including Intellectual Property for which an application or filing has beenmade or is pending in the United States, acquired by any Loan Party since thedate of the most recent list delivered pursuant to this clause (y) (or, in thecase of the first such list so delivered, since the Closing Date);

 

(c)   as soon as available, and in any event nolater than 45 days after the end of each fiscal year of the Borrower, adetailed consolidated budget for the following fiscal year (including aprojected consolidated balance sheet of Holdings and its Subsidiaries as of theend of the following fiscal year, the related consolidated statements ofprojected cash flow, projected income and a description of the underlyingassumptions applicable thereto, collectively, the “Projections”), whichProjections shall in each case be accompanied by a certificate of a ResponsibleOfficer stating that such Projections are based on reasonable estimates,information and assumptions believed by the Borrower to have been reasonablewhen made, it being recognized that such Projections are not to be viewed asfact and that actual results during the periods covered by such Projections maydiffer from the projected results set forth therein by a material amount;

 

(d)   if the Borrower or Holdings is not then areporting company under the Securities Exchange Act of 1934, as amended, within90 days after the end of each fiscal year of the Borrower and within 45 daysafter the end of each of the first three fiscal quarters of the Borrower, anarrative discussion and analysis of the financial condition and results ofoperations of the Borrower and its Subsidiaries for such fiscal quarter and forthe period from the beginning of the then current fiscal year to the end ofsuch fiscal quarter, as compared to the portion of the Projections coveringsuch periods and to the comparable periods of the previous year;

 

(e)   within five Business Days after the same aresent, copies of all financial statements and reports that Holdings or theBorrower sends to the holders of any class of its debt securities or publicequity securities generally and, within five Business Days after the same arefiled, copies of all financial statements and reports that Holdings or theBorrower may make to, or file with, the SEC; and

 

(f)    promptly, such additional financial andother information as any Lender may from time to time reasonably request.

 

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7.3.          Payment of Obligations.  Except as could not, individually or in theaggregate, reasonably be expected to cause a Material Adverse Effect, pay,discharge or otherwise satisfy at or before maturity or before they becomedelinquent, as the case may be, all its contractual obligations of whatever nature,except where the amount or validity thereof is currently being contested ingood faith by appropriate proceedings and reserves in conformity with GAAP withrespect thereto have been provided on the books of the relevant Group Member.

 

7.4.          Maintenance of Existence; Compliance.  (a) (i)  Preserve, renew and keep infull force and effect its organizational existence and (ii) take all reasonableaction to maintain all rights, privileges and franchises necessary or desirablein the normal conduct of its business, except, in each case, as otherwisepermitted by Section 8.4 and except, in the case of clause (ii) above, to theextent that failure to do so could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect; and (b) comply withall Contractual Obligations and Requirements of Law except to the extent thatfailure to comply therewith could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

7.5.          Maintenance of Property; Insurance                .  (a) Keep all property necessary in its business in good working order andcondition, ordinary wear and tear and casualty excepted and (b) maintainwith reputable insurance companies insurance on all its property in at leastsuch amounts and against at least such risks (but including in any event publicliability, product liability and business interruption) as are usually insuredagainst in the same general area by similarly situated companies engaged in thesame or a similar business with respect to similar property.

 

7.6.          Inspection of Property; Books and Records; Discussions.  (a) Keep proper books of records and account in which entries that are full,true and correct in all material respects in conformity with GAAP and allRequirements of Law shall be made of all dealings and transactions in relationto its business and activities and (b) at least once every fiscal year of theBorrower or at any time while an Event of Default shall have occurred and becontinuing, permit representatives of any Lender (coordinated through theAdministrative Agent) to visit and inspect any of its properties and examineand make abstracts from any of its books and records during regular businesshours and to discuss the business, operations, properties and financial andother condition of the Group Members with officers and employees of the GroupMembers and with their independent certified public accountants; providedthat relevant officers and employees of the Group Members shall have the rightto be present during such discussions. Nothing in this Section 7.6 shall be construed to cause the Borrower todivulge any materials covered by an attorney-client privilege that has not beenwaived.

 

7.7.          Notices. Promptly give notice to the Administrative Agent and each Lender of:

 

(a)   the occurrence of any Default or Event ofDefault hereunderor any default or event of default under the Senior Subordinated Notes;

 

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(b)   any (i) default or event of default under anyContractual Obligation of any Group Member or any lease encumbered by aMortgage or (ii) litigation, investigation or proceeding that may exist at anytime between any Group Member and any Governmental Authority, that in eithercase, if not cured or if adversely determined, as the case may be, could,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect;

 

(c)   any litigation or proceeding affecting anyGroup Member (i) in which the amount involved is $ 5,000,000 or more (excludingamounts covered by insurance), (ii) in which injunctive or similar relief issought with respect to material operations or (iii) which relates to any LoanDocument;

 

(d)   the following events, as soon as possible andin any event within 30 days after any Loan Party knows or has reason to knowthereof:  (i) the occurrence of anyReportable Event with respect to any Multiemployer Plan, a failure to make anyrequired contribution to a Multiemployer Plan, the creation of any Lien infavor of the PBGC or a Plan or any withdrawal from, or the termination,Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institutionof proceedings or the taking of any other action by the PBGC or the Borrower orany Commonly Controlled Entity or any Multiemployer Plan with respect to thewithdrawal from, or the termination, Reorganization or Insolvency of, anyMultiemployer Plan; and

 

(e)   any development or event that, individuallyor in the aggregate, has had or could reasonably be expected to have a MaterialAdverse Effect.

 

Each noticepursuant to this Section 7.7 shall be accompanied by a statement of aResponsible Officer setting forth details of the occurrence referred to thereinand stating what action Holdings, the Borrower or the relevant Subsidiaryproposes to take with respect thereto.

 

7.8.          Environmental Laws. Except as the failure to do socould not, individually or in the aggregate, reasonably be expected to have aMaterial Adverse Effect:

 

(a)  Comply in all material respects with, andensure compliance in all material respects by all tenants and subtenants, ifany, with, all applicable Environmental Laws, and obtain and comply in allmaterial respects with and maintain, and ensure that all tenants and subtenantsobtain and comply in all material respects with and maintain, any and alllicenses, approvals, notifications, registrations or permits required byapplicable Environmental Laws.

 

(b)  Conduct and complete all investigations,studies, sampling and testing, and all remedial, removal and other actionsrequired under Environmental Laws and promptly comply in all material respectswith all lawful orders and directives of all Governmental Authorities regardingEnvironmental Laws.

 

7.9.          Interest Rate Protection.  In the case of the Borrower, maintain, HedgeAgreements to the extent necessary to provide that at least $70,000,000 inaggregate principal amount of the Term Loans are subject to either a fixedinterest rate or interest rate protection for a period of not less than two yearsafter the Closing Date, which Hedge Agreements shall have terms and conditionsreasonably satisfactory to the Administrative Agent.

 

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7.10.        Additional Collateral, etc.  With respect to any property acquired afterthe Closing Date by any Group Member (other than (w) any property described inparagraph (b), (c) or (d) below, (x) any property subject to a Lien expresslypermitted by Section 8.3(f), (y) property acquired by any Foreign Subsidiaryand (z) any property of the type not required to be pledged pursuant to theSecurity Documents) as to which the Administrative Agent, for the benefit ofthe Secured Parties, does not have a perfected Lien, promptly (i) execute anddeliver to the Administrative Agent such amendments to the Guarantee andCollateral Agreement or such other documents as the Administrative Agentreasonably deems necessary or advisable to grant to the Administrative Agent,for the benefit of the Secured Parties, a security interest in such propertyand (ii) take all actions necessary or advisable to grant to the AdministrativeAgent, for the benefit of the Secured Parties, a perfected first prioritysecurity interest in such property (subject to Liens permitted under Section8.3), including the filing of Uniform Commercial Code financing statements insuch jurisdictions as may be required by the Guarantee and Collateral Agreementor by law or as may be requested by the Administrative Agent.

 

(b)   With respect to any fee interest in any realproperty having a value (together with improvements thereof) of at least$2,000,000 acquired after the Closing Date by any Group Member (other than (x)any such real property subject to a Lien expressly permitted by Section 8.3(f)and (y) real property acquired by any Foreign Subsidiary), promptly (i) executeand deliver a first priority Mortgage, in favor of the Administrative Agent,for the benefit of the Secured Parties, covering such real property, (ii) ifrequested by the Administrative Agent, provide the Secured Parties with (x)title and extended coverage insurance covering such real property in an amountat least equal to the purchase price of such real property (or such otheramount as shall be reasonably specified by the Administrative Agent) as well asa current ALTA survey thereof, together with a surveyor’s certificate, all inaccordance with the requirements set forth in Section 6.1(k) and (y) anyconsents or estoppels reasonably deemed necessary or advisable by theAdministrative Agent in connection with such Mortgage, each of the foregoing inform and substance reasonably satisfactory to the Administrative Agent and(iii) if requested by the Administrative Agent, deliver to the AdministrativeAgent legal opinions relating to the matters described above, which opinionsshall be in form and substance, and from counsel, reasonably satisfactory tothe Administrative Agent. Notwithstanding the foregoing, no Loan Party shall be deemed inviolation of this Section 7.10(b) for failure to deliver documentation requiredunder clause (2) above if the Borrower has used all commercially reasonableefforts to do so.

 

(c)   With respect to any new Subsidiary (otherthan a Foreign Subsidiary) created or acquired after the Closing Date by anyGroup Member, promptly (i) execute and deliver to the Administrative Agent suchamendments to the Guarantee and Collateral Agreement as the AdministrativeAgent reasonably deems necessary or advisable to grant to the AdministrativeAgent, for the benefit of the Secured Parties, a perfected first prioritysecurity interest in the Capital Stock of such new Subsidiary that is owned byany Group Member, (ii) deliver to the Administrative Agent the certificatesrepresenting such Capital Stock, together with undated stock (or other transfer)powers, in blank, executed and delivered by a duly authorized officer of therelevant Group Member and (iii) cause such new Subsidiary (A) to become aparty to the Guarantee and Collateral Agreement, (B) to take such actionsnecessary or advisable to grant to the Administrative Agent for the benefit ofthe Secured Parties a perfected first priority security

 

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interest, subject to, in thecase of Capital Stock, Liens arising as a matter of law that do not detractfrom the value thereof in any material respect, and (other than as to theCapital Stock of or held by such new Subsidiary) Liens permitted by Section8.3, in the Collateral described in the Guarantee and Collateral Agreement withrespect to such new Subsidiary, including the filing of Uniform Commercial Codefinancing statements in such jurisdictions as may be required by the Guaranteeand Collateral Agreement or by law or as may be requested by the AdministrativeAgent and (C) to deliver to the Administrative Agent a certificate of suchSubsidiary, substantially in the form of Exhibit B, with appropriate insertionsand attachments, and (iv) if reasonably requested by the Administrative Agent,deliver to the Administrative Agent legal opinions relating to the mattersdescribed above, which opinions shall be in form and substance, and fromcounsel, reasonably satisfactory to the Administrative Agent.

 

(d)   With respect to any new Foreign Subsidiarycreated or acquired after the Closing Date by any Group Member (other than byany Group Member that is a Foreign Subsidiary), promptly (i) execute anddeliver to the Administrative Agent such amendments to the Guarantee andCollateral Agreement as the Administrative Agent deems necessary or advisable togrant to the Administrative Agent, for the benefit of the Secured Parties, aperfected first priority security interest in the Capital Stock of such newSubsidiary that is owned by any such Group Member (provided that in no eventshall more than 65% of the total outstanding voting Capital Stock and 100% ofthe total outstanding non-voting Capital Stock of any such new Subsidiary berequired to be so pledged) and (ii) deliver to the Administrative Agent thecertificates representing such Capital Stock, together with undated stockpowers, in blank, executed and delivered by a duly authorized officer of therelevant Group Member, as the case may be, and take such other action as may benecessary or, in the opinion of the Administrative Agent, desirable to perfectthe Administrative Agent’s security interest therein, and (iii) if reasonablyrequested by the Administrative Agent, deliver to the Administrative Agentlegal opinions relating to the matters described above, which opinions shall bein form and substance, and from counsel, reasonably satisfactory to theAdministrative Agent.

 

(e)   With respect to the Borrower’s operationscurrently conducted at the leased premises located at 4221 W. John Carpenter,Irving, TX 75063, the Borrower shall (i) within sixty (60) days after theClosing Date, use commercially reasonable efforts to provide the AdministrativeAgent with the necessary landlord consent to the Borrower’s granting of aleasehold Mortgage encumbering such leased premises, in form and substancereasonably satisfactory to the Administrative Agent and (ii) if such landlordconsent is obtained, within twenty (20) days after receipt of such landlordconsent, (y) execute and deliver a first priority leasehold Mortgage, in favorof the Administrative Agent, for the benefit of the Secured Parties,encumbering such leased premises and (z) deliver to the Administrative Agent alegal opinion relating to the matters described above, including, withoutlimitation, the enforceability of such leasehold Mortgage, which opinion shallbe in form and substance, and from counsel, reasonably satisfactory to theAdministrative Agent..

 

7.11.        Further Assurances. From time to time execute and deliver, or cause to be executed anddelivered, such additional instruments, certificates or documents, and take allsuch actions, as the Administrative Agent may reasonably request for thepurposes of implementing or effectuating the provisions of this Agreement andthe other Loan Documents, or of more fully

 

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perfecting or renewing the rights of the Administrative Agent and theSecured Parties with respect to the Collateral (or with respect to anyadditions thereto or replacements or proceeds thereof or with respect to anyother property or assets hereafter acquired by the Borrower or any Subsidiarywhich may be deemed to be part of the Collateral) pursuant hereto orthereto.  Upon the exercise by theAdministrative Agent or any Secured Party of any power, right, privilege orremedy pursuant to this Agreement or the other Loan Documents which requiresany consent, approval, recording qualification or authorization of anyGovernmental Authority, the Borrower will execute and deliver, or will causethe execution and delivery of, all applications, certifications, instrumentsand other documents and papers that the Administrative Agent or such SecuredParties may be required to obtain from the Borrower or any of its Subsidiariesfor such governmental consent, approval, recording, qualification orauthorization.

 

SECTION 8.  NEGATIVE COVENANTS

 

Holdings and the Borrower hereby jointly andseverally agree that, so long as the Commitments remain in effect, any Letterof Credit remains outstanding (unless cash collateralized) or any Loan or otheramount is owing (excluding contingent indemnification obligations for which noclaim has been made or obligations with respect to Hedge Agreements) to anyLender or Agent hereunder, each of Holdings and the Borrower shall not, andshall not permit any of its Subsidiaries to, directly or indirectly:

 

8.1.          Financial Condition Covenants

 

(a)   Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as atthe last day of any period of four consecutive fiscal quarters of Holdingsending with any fiscal quarter set forth below to exceed the ratio set forthbelow opposite such fiscal quarter:

 

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Fiscal Quarter

 

Consolidated
Leverage Ratio

Q2 2006

 

5.75x

Q3 2006

 

5.75x

Q4 2006

 

5.75x

Q1 2007

 

5.75x

Q2 2007

 

5.75x

Q3 2007

 

5.75x

Q4 2007

 

5.75x

Q1 2008

 

5.75x

Q2 2008

 

5.75x

Q3 2008

 

5.75x

Q4 2008

 

5.75x

Q1 2009

 

5.50x

Q2 2009

 

5.50x

Q3 2009

 

5.50x

Q4 2009

 

5.50x

Q1 2010

 

5.25x

Q2 2010

 

5.25x

Q3 2010

 

5.25x

Q4 2010

 

5.25x

Q1 2011

 

5.00x

Q2 2011

 

5.00x

Q3 2011

 

5.00x

Q4 2011

 

5.00x

Q1 2012 and thereafter

 

4.75x

 

(b)   Consolidated Interest Coverage Ratio.  Permit the Consolidated Interest CoverageRatio for any period of four consecutive fiscal quarters of Holdings endingwith any fiscal quarter set forth below to be less than the ratio set forthbelow opposite such fiscal quarter:

 

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Fiscal Quarter

 

Consolidated Interest
Leverage Ratio

Q2 2006

 

2.00x

Q3 2006

 

2.00x

Q4 2006

 

2.00x

Q1 2007

 

2.00x

Q2 2007

 

2.00x

Q3 2007

 

2.00x

Q4 2007

 

2.00x

Q1 2008

 

2.00x

Q2 2008

 

2.00x

Q3 2008

 

2.00x

Q4 2008

 

2.00x

Q1 2009

 

2.00x

Q2 2009

 

2.00x

Q3 2009

 

2.00x

Q4 2009

 

2.00x

Q1 2010

 

2.05x

Q2 2010

 

2.05x

Q3 2010

 

2.05x

Q4 2010

 

2.05x

Q1 2011

 

2.15x

Q2 2011

 

2.15x

Q3 2011

 

2.15x

Q4 2011

 

2.15x

Q1 2012 and thereafter

 

2.25x

 

8.2.          Indebtedness. Create, issue, incur, assume, become liable in respect of or suffer toexist any Indebtedness, except:

 

(a)   Indebtedness of any Loan Party pursuant toany Loan Document;

 

(b)   Indebtedness (i) of the Borrower to anySubsidiary, (ii) of any Wholly Owned Subsidiary Guarantor to the Borrower orany other Subsidiary, (iii) of any Foreign Subsidiary to any Foreign Subsidiaryand (iv) subject to Section 8.8(p), of any Foreign Subsidiary to the Borroweror any Subsidiary Guarantor; provided that such Indebtedness shall beevidenced by a Subordinated Intercompany Note, which Subordinated IntercompanyNote shall (to the extent representing Obligations of a Loan Party) be pledgedto the Administrative Agent;

 

(c)   Guarantee Obligations incurred in theordinary course of business by the Borrower or any of its Subsidiaries ofobligations of the Borrower, any Subsidiary Guarantor and, subject to Section8.8(p), of any Foreign Subsidiary;

 

(d)   the Senior Subordinated Notes outstanding onthe Restatement Date and any Permitted Refinancing thereof;

 

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(e)   Indebtedness (including Capital LeaseObligations) secured by Liens permitted by Section 8.3(f) in an aggregateprincipal amount not to exceed $ 10,000,000 at any one time outstanding;

 

(f)    Hedge Agreements permitted under Section8.12;

 

(g)   to the extent the Loan Parties demonstratepro forma covenant compliance after giving effect to the incurrence thereof,Indebtedness of any Subsidiary of the Borrower that was not a Subsidiary on theClosing Date existing at the time such other Person became a Subsidiary of theBorrower; provided such Indebtedness was not incurred in connectionwith, or in contemplation of, such other Person becoming such a Subsidiary;

 

(h)   Indebtedness arising from agreementsproviding for indemnification, adjustment of purchase price or similarobligations, or from guarantees or letters of credit, securing the performanceof such Loan Party or any Subsidiary pursuant to such agreements, in connectionwith Permitted Acquisitions or Dispositions permitted hereunder of anybusiness, assets or Subsidiary of such Loan Party or any of its Subsidiaries;

 

(i)    Indebtedness incurred in the ordinary courseof business in connection with the financing of insurance premiums;

 

(j)    Indebtedness in respect of netting services,overdraft protections and otherwise in connection with deposit accounts;

 

(k)   Indebtedness of Foreign Subsidiaries not toexceed a principal amount of $5,000,000 at any one time outstanding;

 

(l)    Indebtedness in respect of taxes,assessments or governmental charges to the extent that payment thereof shallnot at the time be required to be made hereunder;

 

(m)  to the extent permitted by applicable law,Indebtedness consisting of deferred purchase price or notes issued to officers,directors, consultants and employees to purchase or redeem equity interests (oroption or warrants or similar instruments) of a Loan Party or its Subsidiaries;

 

(n)   to the extent constituting Indebtedness,obligations under incentive, non-compete, consulting, deferred compensation orother similar arrangements satisfactory to the Administrative Agent;

 

(o)   unsecured Indebtedness issued in connectionwith Permitted Acquisitions or to Sponsor and/or its Control InvestmentAffiliates, which Indebtedness (and any guarantees thereof) is subordinated tothe Loans (and the guarantees thereof pursuant to the Guarantee and CollateralAgreement) and on terms reasonably acceptable to the Administrative Agent,including but not limited to PIK treatment of any interest and the tenor ofsuch Indebtedness; and

 

(p)   other Indebtedness incurred in the ordinarycourse of business in an aggregate principal amount which shall not exceed$15,000,000 at any one time outstanding.

 

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8.3.          Liens.  Create,incur, assume or suffer to exist any Lien upon any of its property, whether nowowned or hereafter acquired, except for:

 

(a)   Liens for taxes not yet due and payable orthat are being contested diligently in good faith and by appropriateproceedings, provided that adequate reserves with respect thereto aremaintained on the books of the Borrower or its Subsidiaries, as the case maybe, in conformity with GAAP;

 

(b)   carriers’, warehousemen’s, mechanics’,materialmen’s, repairmen’s landlord’s or other like Liens arising in theordinary course of business that are not overdue for a period of more than 90days or that are being contested diligently in good faith and by appropriateproceedings;

 

(c)   pledges or deposits in connection with workers’compensation, unemployment insurance and other social security legislation;

 

(d)   deposits to secure the performance of bids,trade contracts (other than for borrowed money), leases, statutory obligations,surety and appeal bonds, performance bonds and other obligations of a likenature incurred in the ordinary course of business;

 

(e)   easements, rights-of-way, restrictions andother similar encumbrances incurred in the ordinary course of business that, inthe aggregate, are not substantial in amount and that do not in any casematerially detract from the value of the property subject thereto or materiallyinterfere with the ordinary conduct of the business of the Borrower or any ofits Subsidiaries;

 

(f)    Liens securing Indebtedness of the Borroweror any other Subsidiary incurred pursuant to Section 8.2(e) to finance theacquisition of fixed or capital assets, provided that (i) suchLiens shall be created within 90 days after the acquisition of such fixed orcapital assets, and (ii) such Liens do not at any time encumber any propertyother than the property financed by such Indebtedness;

 

(g)   Liens created pursuant to the SecurityDocuments;

 

(h)   judgment Liens securing judgments notconstituting an Event of Default under Section 9(h);

 

(i)    purported Liens evidenced by the filing ofprecautionary UCC financing statements relating solely to operating leases ofpersonal property entered into in the ordinary course of business;

 

(j)    Liens securing Indebtedness in an amount ofnot more than $5,000,000 in the aggregate at any time outstanding permitted bySection 8.2(g); provided such Liens were not granted in connection with,or in contemplation of, the obligor on such Indebtedness becoming such aSubsidiary and do not exceed the value of the assets acquired when such obligorbecame a Subsidiary;

 

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(k)   any interest or title of a lessor, licensoror sublicensor under any lease, license or sublicense entered into by theBorrower or any other Subsidiary in the ordinary course of its business andcovering only the assets so leased;

 

(l)    Liens in favor of customs and revenueauthorities arising as a matter of law to secure payment of customs duties inconnection with the importation of goods;

 

(m)  Liens deemed to exist in connection withpermitted repurchase obligations or set-off rights;

 

(n)   replacement, extension or renewal of anyLien permitted herein in the same property theretofore subject thereto; providedthe amount of Indebtedness secured thereby is not increased;

 

(o)   Liens securing reimbursement obligations inrespect of documentary letters of credit or bankers’ acceptances; provided thatsuch Liens attach only to the documents, the goods covered thereby and theproceeds thereof;

 

(p)   rights of setoff or bankers’ Liens upondeposits of cash in favor of banks or other depository institutions and Liensassociated with overdraft protection and netting services;

 

(q)   Liens in connection with the financing ofinsurance premiums, provided such Liens shall not exceed the amount of suchpremiums so financed;

 

(r)    Liens arising as a matter of law encumberingcustomary initial deposits and margin deposits, and similar Liens and margindeposits, and similar Liens attaching to commodity trading accounts or other brokerageaccounts incurred in the ordinary course of business;

 

(s)   Liens in favor of collecting banks arisingunder Section 4-210 of the UCC;

 

(t)    Liens on the assets of Foreign Subsidiaries,to the extent securing Indebtedness permitted hereunder;

 

(u)   other Liens not specifically listed abovesecuring Indebtedness not to exceed $5,000,000 outstanding at any one time inthe aggregate; and

 

(v)   Liens securing Permitted Refinancing debtincurred pursuant to Section 8.2(d), which Liens shall be subordinate in allrespects to the Liens in favor of the Lenders granted pursuant to the SecurityDocuments and in accordance with the Intercreditor Agreement.

 

8.4.          Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, windup or dissolve itself (or suffer any liquidation or dissolution), or Dispose ofall or substantially all of its property or business, except that:

 

(a)   any Subsidiary of the Borrower may be mergedor consolidated with or into the Borrower (provided that the Borrowershall be the continuing or surviving corporation) or

 

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with or into any SubsidiaryGuarantor (provided that the Subsidiary Guarantor shall be thecontinuing or surviving corporation) or, subject to Section 8.8(p), with orinto any Foreign Subsidiary;

 

(b)   any Subsidiary of the Borrower may Dispose ofany or all of its assets (upon voluntary liquidation or otherwise) to theBorrower or any Subsidiary Guarantor or, subject to Section 8.8(p), any ForeignSubsidiary; and

 

(c) POIAcquisition I, Inc. may be merged into Holdings; provided that Holdingsshall be the continuing or surviving corporation and shall take on noadditional liabilities or operations as a result of such merger.

 

8.5.          Disposition of Property.  Dispose of any of its property, whether nowowned or hereafter acquired, or, in the case of any Subsidiary, issue or sellany shares of such Subsidiary’s Capital Stock to any Person, except:

 

(a)   the Disposition of obsolete or worn outproperty in the ordinary course of business;

 

(b)   the sale of inventory in the ordinary courseof business;

 

(c)   Dispositions permitted by Section 8.4(b);

 

(d)   the sale or issuance of any Subsidiary’sCapital Stock to the Borrower or any Wholly Owned Subsidiary Guarantor;

 

(e)   Allotted Dispositions;

 

(f)    Dispositions of Property, in any transactionor series of related transactions, that do not yield gross proceeds to anyGroup Member (valued at the initial principal amount thereof in the case ofnon-cash proceeds consisting of notes or other debt securities and valued atfair market value in the case of other non-cash proceeds) in excess of$500,000;

 

(g)   The granting of discounts or forgiveness ofaccount receivables in the ordinary course of business or in connection withcollection or compromise thereof;

 

(h)   any Loan Party and its Subsidiaries may sellor otherwise dispose of cash and Cash Equivalents;

 

(i)    any Loan Party and its Subsidiaries maysell, for fair market value, non-core assets acquired in connection withpermitted Investments;

 

(j)    any Loan Party and its Subsidiaries mayincur Liens permitted under Section 8.3; and

 

(k)   any Loan Party may sell or otherwise disposeof Investments set forth on Schedule 8.8.

 

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8.6.          Restricted Payments. Declare or pay any dividend (other than dividends payable solely incommon stock of the Person making such dividend) on, or make any payment onaccount of, or set apart assets for a sinking or other analogous fund for, thepurchase, redemption, defeasance, retirement or other acquisition of, anyCapital Stock of any Group Member, whether now or hereafter outstanding, ormake any other distribution in respect thereof, either directly or indirectly,whether in cash or property or in obligations of Holdings, the Borrower or anySubsidiary (collectively, “Restricted Payments”), except that:

 

(a)   any Subsidiary may make Restricted Paymentsto the Borrower or any Subsidiary Guarantor;

 

(b)   so long as no Default or Event of Defaultshall have occurred and be continuing or would result therefrom, the Borrowermay pay dividends to Holdings to permit Holdings to (i) purchase Holdings’common stock or common stock options from present or former officers,directors, consultants or employees of any Group Member (or the respectiveestates, spouses or family members) upon the death, disability or terminationof employment of such officer or employee to repay Indebtedness previouslyissued to such Person, provided, that the aggregate amount of cashpayments under this clause (i) after the date hereof (net of any proceedsreceived by Holdings and contributed to the Borrower after the date hereof inconnection with (a) resales of any common stock or common stock options sopurchased or (b) equity issuances by Holdings (to the extent not required to beotherwise applied pursuant to Section 4.2(a)) shall not exceed $2,000,000 inany calendar year or $5,000,000 in the aggregate and (ii) pay fees expresslypermitted by Section 8.10(e);

 

(c)   the Borrower may pay dividends to Holdings topermit Holdings to (i) pay corporate overhead expenses incurred in the ordinarycourse of business, (ii) pay any taxes that are due and payable by Holdings asthe parent of a consolidated or combined group that includes the Borrower, inan amount not to exceed the lesser of (x) the relevant amount of any taxes(including any penalties and interest) that the Borrower would owe if theBorrower were filing a separate tax return (or a separate consolidated orcombined return with its Subsidiaries that are members of the consolidated orcombined group), taking into account any carryovers or carrybacks of taxattributes (such as operating losses) of the Borrower and such Subsidiariesfrom other taxable years and (y) the net amount of the relevant tax thatHoldings actually owes to the appropriate taxing authority; providedthat any such payment in respect of taxes received by Holdings shall be paidover to the appropriate taxing authority within 30 days of Holdings’ receipt ofsuch payments or shall be refunded to the Borrower, (iii) pay expensereimbursements pursuant to the Management Agreement substantially in the formmost recently delivered to the Administrative Agent prior to the Closing Date,and without further modification thereto as to amounts payable thereunder, and(iv) so long as no Default or Event of Default has occurred and is continuing,pay amounts due and owing on preferred equity of Holdings issued to refinancethe Senior Subordinated Notes provided that the coupon on such preferred equityshall be no higher than the rate of interest on the Senior Subordinated Notes;

 

(d)   the Borrower may pay cash dividends toHoldings, which may in turn make equivalent cash dividends to itsequityholders, within thirty days of the Restatement Date in an amount not toexceed $70,500,000 in the aggregate; and

 

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(e)   the Borrower may pay special bonuses tomembers of management not to exceed $4,500,000 in the aggregate with the proceedsof the Term Loans as contemplated by Section 5.16.

 

8.7.          Capital Expenditures; Net Cash Investment Costs.  (a) Make any Capital Expenditure, except (i)Capital Expenditures of the Borrower and its Subsidiaries not exceeding (A)$12,500,000 for the 2006 fiscal year and (B) $10,000,000 for each fiscal yearthereafter; provided, that (A) up to 50% of any such amount referred toabove (but in no event more than $2,500,000 in any fiscal year), if not soexpended in the fiscal year for which it is permitted, may be carried over forexpenditure in the next succeeding fiscal year and (B) Capital Expendituresmade pursuant to this clause (i) during any fiscal year shall be deemed made, first, in respect of amounts carried over from the priorfiscal year pursuant to subclause (A) above, and second,to amounts permitted for such fiscal year as provided above, (ii) CapitalExpenditures made with the proceeds of any Reinvestment Deferred Amount, (iii)Capital Expenditures made as a tenant in leasehold improvements to the extentreimbursable by landlord pursuant to evidence satisfactory to theAdministrative Agent, (iv) Capital Expenditures that are PermittedAcquisitions, and (v) Capital Expenditures made with the proceeds of (x) equityissuances of Holdings concurrently with the issuance thereof, to the extent theNet Cash Proceeds thereof are not required to be applied to mandatoryprepayments pursuant to Section 4.2(a) or (y) issuances of subordinatedIndebtedness permitted under Section 8.2(p).

 

(b)   Incur any Net Cash Investment Costs, except(i) Net Cash Investment Costs of the Borrower and its Subsidiaries in theordinary course of business not exceeding for any fiscal year the followingamount with respect to such fiscal year:

 

Fiscal Year

 

Net Cash Investment Costs

 

2006

 

$

65,000,000

 

2007

 

$

72,500,000

 

2008

 

$

77,500,000

 

2009 and each fiscal year thereafter

 

$

80,000,000

 

 

provided that (A) upto 50% of any such amount referred to above (but in no event more than$5,000,00 in any fiscal year), if not so expended in the fiscal year for whichit is permitted, may be carried over for expenditure in the next succeedingfiscal year, and (B) Net Cash Investment Costs incurred pursuant to this clause(i) during any fiscal year shall be deemed made, first,in respect of amounts carried over from the prior fiscal year pursuant tosubclause (A) above, and second, toamounts permitted for such fiscal year as provided above; (ii) Net CashInvestment Costs made with the proceeds of any Reinvestment Deferred Amount;and (iii) Net Cash Investment Costs in any fiscal year up to the amount ofcapital contributions from the Sponsor and its Control Investment Affiliates orany other Person within such fiscal year, other than proceeds received inrespect of underwritten public offerings of Holdings, the Borrower or any ofits Subsidiaries, and proceeds applied to either (x) fund PermittedAcquisitions or (y) prepay Term Loans and/or reduce Revolving Commitments inaccordance with Section 4.2.

 

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8.8.          Investments. Make any advance, loan, extension of credit (by way of guaranty orotherwise) or capital contribution to, or purchase any Capital Stock, bonds,notes, debentures or other debt securities of, or any assets constituting abusiness unit of, or make any other investment in, any Person (all of theforegoing, “Investments”), except:

 

(a)   extensions of trade credit in the ordinarycourse of business;

 

(b)   Investments in Cash Equivalents;

 

(c)   Guarantee Obligations permitted by Section8.2;

 

(d)   loans and advances to employees of any GroupMember in the ordinary course of business (including for travel, entertainmentand relocation expenses) in an aggregate amount for all Group Members not toexceed $1,000,000 at any one time outstanding;

 

(e)   Investments in assets useful in the businessof the Borrower and its Subsidiaries made by the Borrower or any of itsSubsidiaries with the proceeds of any Reinvestment Deferred Amount (providedthat any such Investments constituting Investments in Foreign Subsidiariesshall be included in the maximum amount permitted under Section 8.8(p),notwithstanding the exclusion in such clause regarding proceeds of ReinvestmentDeferred Amounts);

 

(f)    intercompany Investments by any Group Memberin the Borrower or any Person that, prior to such Investment, is a SubsidiaryGuarantor; provided that any such Investment in the form of loans or advancesshall be evidenced by a Subordinated Intercompany Note which shall (to theextent representing obligations owed to a Loan Party) be pledged to theAdministrative Agent;

 

(g)   Permitted Acquisitions and CapitalExpenditures permitted under this Agreement;

 

(h)   Hedge Agreements entered into fornon-speculative purposes and otherwise permitted under this Agreement;

 

(i)    earnest money deposits required inconnection with Permitted Acquisitions;

 

(j)    any Loan Party may capitalize or forgive anyIndebtedness owed to it by any other Loan Party;

 

(k)   Investments acquired in connection withPermitted Acquisitions;

 

(l)    Investments acquired in connection with thesettlement of accounts, bankruptcy or reorganization of suppliers or customers;

 

(m)  Investments received as the non-cash portionof consideration received in connection with Dispositions permitted under thisAgreement;

 

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(n)   to the extent permitted by applicable law,any Loan Party and its Subsidiaries may accept notes from officers, directorsand employees in exchange for equity interests purchased by such officers,directors or employees pursuant to a stock ownership or purchase plan orcompensation plan of such Loan Party or Subsidiary;

 

(o)   the Borrower or any of its Subsidiaries maymake a loan to, or an Investment in, Holdings that could otherwise be made as aRestricted Payment;

 

(p)   in addition to Investments otherwiseexpressly permitted by this Section, Investments by the Borrower or any of itsSubsidiaries in an aggregate amount (valued at cost) not to exceed $10,000,000during the term of this Agreement (excluding any Investment made with theproceeds of (x) any Reinvestment Deferred Amount or (y) equity issuances ofHoldings not otherwise required to be applied pursuant to Section 4.2(a)); and

 

(q) Investmentsexisting on the Closing Date set forth on Schedule 8.8.

 

Theamount of any Investment shall be the initial amount of such Investment lessall repayments, returns, dividends and distributions received in respect ofsuch Investment and less all liabilities expressly assumed by another person inconnection with the sale of such Investment.

 

8.9.          Optional Payments and Modifications of Certain DebtInstruments.  (a)  Make any optional or voluntary payment,prepayment, repurchase or redemption of or otherwise optionally or voluntarilydefease or segregate funds with respect to any Indebtedness the payment ofprincipal and interest of which and other obligations of the Borrower or any ofits Subsidiaries in respect of which are subordinated to the prior payment infull of the obligations hereunder (other than the Senior Subordinated Notes,which may be refinanced with the proceeds of a Permitted Refinancing or anequity issuance of Holdings pursuant to the terms hereof), (b) amend, modify,waive or otherwise change, or consent or agree to any amendment, modification,waiver or other change to, any of the terms of any Indebtedness described inclause (a) (including the Senior Subordinated Notes) (other than any suchamendment, modification, waiver or other change that (i) would extend the maturityor reduce the amount of any payment of principal thereof or reduce the rate orextend any date for payment of interest thereon or (ii) could not reasonably beexpected to increase the obligations of the obligor or confer additional rightson the holder of such subordinated Indebtedness, in each case, in a mannerreasonably expected to be materially adverse to the interests of the Lenders;or (c) designate any Indebtedness (other than obligations of the Loan Partiespursuant to the Loan Documents) as “Designated Senior Indebtedness” (or anyother defined term having a similar purpose) for the purposes of the indenturegoverning the Senior Subordinated Notes or any Permitted Refinancing thereof.

 

8.10.        Transactions with Affiliates.  Enter into any transaction, including anypurchase, sale, lease or exchange of property, the rendering of any service orthe payment of any management, advisory or similar fees, with any Affiliate(other than Holdings, the Borrower or any Wholly Owned Subsidiary Guarantor)unless such transaction is (a) otherwise permitted under this Agreement or(b) upon fair and reasonable terms no less favorable to the relevant GroupMember than it would obtain in a comparable arm’s length transaction with aPerson that

 

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is not an Affiliate. Notwithstanding the foregoing, (i) Holdings may enter into the mergerwith POI Acquisition I, Inc. as permitted by Section 8.4(c) (which merger maybe accomplished by an exchange of the existing shares of Holdings held by suchentity for identical shares of Holdings which are concurrently distributed tothe equityholders of POI Acquisition I, Inc. in accordance with their intereststherein and immediately followed by the dissolution of POI Acquisition I, Inc.),and (ii) the Borrower and its Subsidiaries may:

 

(a)   pay compensation, expense reimbursement andindemnities to officers and directors of the Loan Parties and theirSubsidiaries in the ordinary course of business;

 

(b)   enter into employment contracts with officersand management of the Loan Parties and their Subsidiaries;

 

(c)   engage in transactions solely among ForeignSubsidiaries;

 

(d)   pay expense reimbursements pursuant to theManagement Agreement substantially in the form most recently delivered to theAdministrative Agent prior to the Closing Date, and without furthermodification thereto as to amounts payable thereunder; and

 

(e)   so long as no Default or Event of Defaultshall have occurred and be continuing, pay to the Sponsor and its Control InvestmentAffiliates monitoring and transactions fees pursuant to the ManagementAgreement substantially in the form most recently delivered to theAdministrative Agent prior to the Closing Date, and without furthermodification thereto as to amounts payable thereunder; provided that theaggregate amount of monitoring fees paid in cash shall not to exceed $1,500,000in any fiscal year of Holdings; provided further, that such feesnot paid shall accrue and be paid when the applicable Default or Event of Defaulthas been cured or waived and no additional Default or Event of Default hasoccurred and is continuing or would arise as a result of such payment.

 

8.11.        Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing byany Group Member of real or personal property that has been or is to be sold ortransferred by such Group Member to such Person or to any other Person to whomfunds have been or are to be advanced by such Person on the security of suchproperty or rental obligations of such Group Member.

 

8.12.        Hedge Agreements. Enter into any Hedge Agreement, except Hedge Agreements entered into inorder to effectively cap, collar or exchange interest rates (from fixed tofloating rates, from one floating rate to another floating rate or otherwise)with respect to any interest-bearing liability or investment of the Borrower orany Subsidiary.

 

8.13.        Changes in Fiscal Periods.  Permit the fiscal year of the Borrower to endon a day other than December 31 or change Holdings’ method of determiningfiscal quarters.

 

8.14.        Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement thatprohibits or limits the ability of any Group Member to create, incur, assume orsuffer to exist any Lien upon any of its property or revenues, whether nowowned or hereafter

 

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acquired, other than (a) this Agreement and the other Loan Documents,(b) any agreements governing any purchase money Liens or Capital LeaseObligations otherwise permitted hereby (in which case, any prohibition orlimitation shall only be effective against the assets financed thereby), (c)the documentation evidencing the Senior Subordinated Notes and any PermittedRefinancing thereof, (d) contained in agreements relating to the sale of aSubsidiary permitted hereunder pending such sale and only with respect to thespecific property subject to sale, (e) contained in agreements evidencingIndebtedness permitted under Section 8.2(k), solely with respect to property ofForeign Subsidiaries and (f) contained in licenses or leases entered into inthe ordinary course of business.

 

8.15.        Clauses Restricting Subsidiary Distributions.  Enter into or suffer to exist or becomeeffective any consensual encumbrance or restriction on the ability of anySubsidiary of the Borrower to (a) make Restricted Payments in respect of anyCapital Stock of such Subsidiary held by, or pay any Indebtedness owed to, theBorrower or any other Subsidiary of the Borrower, (b) make loans or advancesto, or other Investments in, the Borrower or any other Subsidiary of theBorrower or (c) transfer any of its assets to the Borrower or any otherSubsidiary of the Borrower, except for such encumbrances or restrictionsexisting under or by reason of (i) any restrictions existing under the LoanDocuments, (ii) any restrictions with respect to a Subsidiary imposed pursuantto an agreement that has been entered into in connection with the Dispositionof all or substantially all of the Capital Stock or assets of such Subsidiary,(iii) contained in the documentation evidencing the Senior Subordinated Notesand any Permitted Refinancing thereof, (iv) contained in licenses or leasesentered into in the ordinary course of business, (v) contained in agreementsrelating to the sale of assets permitted hereunder pending such sale and onlywith respect to the specific property subject to sale, and (vi) contained inagreements evidencing Indebtedness permitted under Section 8.2(k), solely withrespect to property of Foreign Subsidiaries.

 

8.16.        Lines of Business. Enter into any business, either directly or through any Subsidiary,except for those businesses in which the Borrower and its Subsidiaries areengaged on the date of this Agreement or that are reasonably related thereto.

 

8.17.        Limitations on the Activities of Holdings.    In the case of Holdings, notwithstandinganything to the contrary in this Agreement or any other Loan Document, (a)conduct, transact or otherwise engage in, or commit to conduct, transact orotherwise engage in, any material business or operations other than thoseincidental to its ownership of the Capital Stock of the Borrower and activitiesincidental to the maintenance of its corporate existence, (b) incur, create,assume or suffer to exist any material Indebtedness or other liabilities orfinancial obligations, except (i) nonconsensual obligations imposed byoperation of law, (ii) pursuant to the Loan Documents to which it is a partyand (iii) obligations with respect to its Capital Stock, or (c) own, lease,manage or otherwise operate any material properties or assets (including cash(other than cash received in connection with dividends made by the Borrower inaccordance with Section 8.6 pending application in the manner contemplated bysaid Section or cash to be contributed to the Borrower) and cash equivalents)other than the ownership of shares of Capital Stock of the Borrower.

 

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SECTION 9.  EVENTS OF DEFAULT

 

If any of the following events shall occurand be continuing:

 

(a)   the Borrower shall fail to pay any principalof any Loan or Reimbursement Obligation when due in accordance with the termshereof; or the Borrower shall fail to pay any interest on any Loan orReimbursement Obligation, or any other amount payable hereunder or under anyother Loan Document, within five Business Days after any such interest or otheramount becomes due in accordance with the terms hereof; or

 

(b)   any representation or warranty made or deemedmade by any Loan Party herein or in any other Loan Document or that iscontained in any certificate, document or financial or other statementfurnished by it at any time under or in connection with this Agreement or anysuch other Loan Document shall prove to have been inaccurate in any materialrespect on or as of the date made or deemed made except for representations andwarranties which specifically relate to an earlier specific date, in which casesuch representations and warranties shall have been inaccurate in any materialrespect as of such earlier date; or

 

(c)   (i) any Loan Party shall default in the observance or performance of anyagreement contained in clause (i) or (ii) of Section 7.4(a) (with respect toHoldings and the Borrower only), Section 7.7(a) or Section 8 of this Agreementor Sections 5.5 and 5.7(b) of the Guarantee and Collateral Agreement or (ii) an“Event of Default” under and as defined in any Mortgage shall have occurred andbe continuing; or

 

(d)   any Loan Party shall default in theobservance or performance of any other agreement contained in this Agreement orany other Loan Document (other than as provided in paragraphs (a) through (c)of this Section), and such default shall continue for a period of 30 days afterthe earlier of (i) an officer of such Loan Party becoming aware of such defaultor (ii) receipt by the Borrower of notice from the Administrative Agent or anyLender of such default; or

 

(e)   any Group Member shall (i) default in makingany payment of any principal of any Indebtedness (including any GuaranteeObligation, but excluding the Loans) on the scheduled or original due date withrespect thereto; or (ii) default in making any payment of any interest on anysuch Indebtedness beyond the period of grace, if any, provided in theinstrument or agreement under which such Indebtedness was created; or (iii)default in the observance or performance of any other agreement or conditionrelating to any such Indebtedness or contained in any instrument or agreement evidencing,securing or relating thereto, or any other event shall occur or conditionexist, the effect of which default or other event or condition is to cause, orto permit the holder or beneficiary of such Indebtedness (or a trustee or agenton behalf of such holder or beneficiary) to cause, with the giving of notice ifrequired, such Indebtedness to become due prior to its stated maturity or tobecome subject to a mandatory offer to purchase by the obligor thereunder or(in the case of any such Indebtedness constituting a Guarantee Obligation) tobecome payable; provided, that a default, event or condition describedin clause (i), (ii) or (iii) of this paragraph (e) shall not at any timeconstitute an Event of Default unless, at such time, one or more defaults,events or conditions of the type described in clauses (i), (ii) and

 

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(iii) of this paragraph (e)shall have occurred and be continuing with respect to Indebtedness theoutstanding principal amount of which exceeds in the aggregate $15,000,000; or

 

(f)    (i) any Group Member shall commence anycase, proceeding or other action (A) under any existing or future law of anyjurisdiction, domestic or foreign, relating to bankruptcy, insolvency,reorganization, administration or relief of debtors, seeking to have an orderfor relief entered with respect to it, or seeking to adjudicate it a bankruptor insolvent, or seeking reorganization, arrangement, adjustment, winding-up,liquidation, dissolution, composition, receivership or other relief withrespect to it or its debts, or (B) seeking appointment of a receiver, trustee,custodian, conservator or other similar official for it or for all or anysubstantial part of its assets, or any Group Member shall make a generalassignment for the benefit of its creditors; or (ii) there shall be commencedagainst any Group Member any case, proceeding or other action of a naturereferred to in clause (i) above that (A) results in the entry of an order forrelief or any such adjudication or appointment or (B) remains undismissed,undischarged or unbonded for a period of 60 days; or (iii) there shall becommenced against any Group Member any case, proceeding or other action seekingissuance of a warrant of attachment, execution, distraint or similar processagainst all or any substantial part of its assets that results in the entry ofan order for any such relief that shall not have been vacated, discharged, orstayed or bonded pending appeal within 60 days from the entry thereof; or (iv)any Group Member shall take any action in furtherance of, or indicating itsconsent to, approval of, or acquiescence in, any of the acts set forth inclause (i), (ii), or (iii) above; or (v) any Group Member shall generally not,or shall be unable to, or shall admit in writing its inability to generally,pay its debts as they become due; or

 

(g)   (i) any Person shall engage in any“prohibited transaction” (as defined in Section 406 of ERISA orSection 4975 of the Code) involving any Plan, (ii) any “accumulatedfunding deficiency” (as defined in Section 302 of ERISA), whether or notwaived, shall exist with respect to any Plan or any Lien in favor of the PBGCor a Plan shall arise on the assets of any Group Member or any CommonlyControlled Entity, (iii) a Reportable Event shall occur with respect to, orproceedings shall commence to have a trustee appointed, or a trustee shall beappointed, to administer or to terminate, any Single Employer Plan, whichReportable Event or commencement of proceedings or appointment of a trustee is,in the reasonable opinion of the Required Lenders, likely to result in thetermination of such Plan for purposes of Title IV of ERISA, (iv) any SingleEmployer Plan shall terminate for purposes of Title IV of ERISA, (v) any GroupMember or any Commonly Controlled Entity shall, or in the reasonable opinion ofthe Required Lenders is likely to, incur any liability in connection with awithdrawal from, or the Insolvency or Reorganization of, a Multiemployer Planor (vi) any other event or condition shall occur or exist with respect to aPlan; and in each case in clauses (i), (iii), (iv), (v) and (vi) above, suchevent or condition, together with all other such events or conditions, if any,could, in the sole judgment of the Required Lenders, reasonably be expected tohave a Material Adverse Effect; or

 

(h)   one or more judgments or decrees shall beentered against any Group Member involving in the aggregate a liability(excluding amounts covered by insurance as to which the relevant insurancecompany has not denied coverage, after reaching a final decision regarding

 

81



 

such coverage) of $15,000,000or more, and all such judgments or decrees shall not have been vacated,discharged, stayed or bonded pending appeal within 45 days from the entrythereof; or

 

(i)    any of the Security Documents (except thosethat relate solely to an immaterial portion of the Collateral) shall cease, forany reason, to be in full force and effect, or any Loan Party or any Affiliateof any Loan Party shall so assert, or any Lien created by any of the SecurityDocuments (other than any such Lien on an immaterial portion of the Collateral)shall cease to be enforceable and of the same effect and priority purported tobe created thereby; or

 

(j)    the guarantee contained in Section 2 of theGuarantee and Collateral Agreement shall cease, for any reason other than inaccordance with its terms, to be in full force and effect or any Loan Party orany Affiliate of any Loan Party shall so assert; or

 

(k)   (i) at any time prior to a Qualified PO, thePermitted Investors shall fail to own directly or indirectly, beneficially andof record, Capital Stock representing at least 51% of the aggregate ordinaryvoting power and aggregate equity value represented by the issued andoutstanding Capital Stock of Holdings; (ii) after a Qualified PO, any “person”or “group” (within the meaning of Rule 13d-5 of the Securities Exchange Act of1934 as in effect on the date hereof) other than the Permitted Investors shallown directly or indirectly, beneficially or of record, Capital Stockrepresenting either (A) more than 35% of either the aggregate ordinary votingpower or the aggregate equity value represented by the issued and outstandingCapital Stock of Holdings or (B) a greater percentage of either the aggregateordinary voting power or the aggregate equity value represented by the issuedand outstanding Capital Stock of Holdings then held, directly or indirectly,beneficially and of record, by the Permitted Investors; (iii) a majority of theseats (other than vacant seats) on the board of directors of Holdings shall atany time be occupied by persons who are not Continuing Directors; (iv) Holdingsshall at any time fail to own directly or indirectly, beneficially and ofrecord, 100% of each class of issued and outstanding Capital Stock of theBorrower free and clear of all Liens (other than Liens created by the Guaranteeand Collateral Agreement and Liens arising as a matter of law that do notdetract from the value thereof in any material respect); or (v) a SpecifiedChange of Control shall occur; or

 

(l)      theSenior Subordinated Notes, any Permitted Refinancing thereof (to the extent theapplicable Indebtedness is subordinated to the Obligations) or the guaranteesthereof shall cease, for any reason, to be validly subordinated to theObligations or the obligations of the Subsidiary Guarantors under the Guaranteeand Collateral Agreement, as the case may be, as provided in the documentationgoverning such Senior Subordinated Notes or Permitted Refinancing thereof, asthe case may be, or any Loan Party, any Affiliate of any Loan Party, thetrustee in respect of the Senior Subordinated Notes (or such PermittedRefinancing thereof) or the holders of at least 25% in aggregate principalamount of the Senior Subordinated Notes (or Indebtedness comprising suchPermitted Refinancing thereof) shall so assert;

 

then, and inany such event, (A) if such event is an Event of Default specified in clause(i) or (ii) of paragraph (f) above with respect to the Borrower, automaticallythe Commitments shall immediately terminate and the Loans hereunder (withaccrued interest thereon) and all other

 

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amounts owingunder this Agreement and the other Loan Documents (including all amounts of L/CObligations, whether or not the beneficiaries of the then outstanding Lettersof Credit shall have presented the documents required thereunder) shallimmediately become due and payable, and (B) if such event is any other Event ofDefault, either or both of the following actions may be taken:  (i) with the consent of the Required Lenders,the Administrative Agent may, or upon the request of the Required Lenders, theAdministrative Agent shall, by notice to the Borrower declare the RevolvingCommitments to be terminated forthwith, whereupon the Revolving Commitmentsshall immediately terminate; and (ii) with the consent of the Required Lenders,the Administrative Agent may, or upon the request of the Required Lenders, theAdministrative Agent shall, by notice to the Borrower, declare the Loanshereunder (with accrued interest thereon) and all other amounts owing underthis Agreement and the other Loan Documents (including all amounts of L/CObligations, whether or not the beneficiaries of the then outstanding Lettersof Credit shall have presented the documents required thereunder) to be due andpayable forthwith, whereupon the same shall immediately become due and payable.  With respect to all Letters of Credit withrespect to which presentment for honor shall not have occurred at the time ofan acceleration pursuant to this paragraph, the Borrower shall at such timedeposit in a cash collateral account opened by the Administrative Agent anamount equal to the aggregate then undrawn and unexpired amount of such Lettersof Credit.  Amounts held in such cashcollateral account shall be applied by the Administrative Agent to the paymentof drafts drawn under such Letters of Credit, and the unused portion thereofafter all such Letters of Credit shall have expired or been fully drawn upon,if any, shall be applied to repay other obligations of the Borrower hereunderand under the other Loan Documents. After all such Letters of Credit shall have expired or been fully drawnupon, all Reimbursement Obligations shall have been satisfied and all otherobligations of the Borrower hereunder and under the other Loan Documents shallhave been paid in full, the balance, if any, in such cash collateral accountshall be returned to the Borrower (or such other Person as may be lawfullyentitled thereto).  Except as expresslyprovided above in this Section, presentment, demand, protest and all othernotices of any kind are hereby expressly waived by the Borrower.

 

SECTION 10.  THE AGENTS

 

10.1.        Appointment.  EachLender hereby irrevocably designates and appoints each Agent as the agent ofsuch Lender under this Agreement and the other Loan Documents, and each suchLender irrevocably authorizes such Agent, in such capacity, to take such actionon its behalf under the provisions of this Agreement and the other LoanDocuments and to exercise such powers and perform such duties as are expresslydelegated to such Agent by the terms of this Agreement and the other LoanDocuments, together with such other powers as are reasonably incidentalthereto.   Notwithstanding any provisionto the contrary elsewhere in this Agreement, no Agent shall have any duties orresponsibilities, except those expressly set forth herein, or any fiduciaryrelationship with any Lender, and no implied covenants, functions,responsibilities, duties, obligations or liabilities shall be read into thisAgreement or any other Loan Document or otherwise exist against any Agent.

 

10.2.        Delegation of Duties. Each Agent may execute any of its duties under this Agreement and theother Loan Documents by or through agents or attorneys-in-fact and shall beentitled to advice of counsel concerning all matters pertaining to suchduties.  No Agent shall be

 

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responsible for the negligence or misconduct of any agents or attorneysin-fact selected by it with reasonable care.

 

10.3.        Exculpatory Provisions. Neither any Agent nor any of their respective officers, directors,employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for anyaction lawfully taken or omitted to be taken by it or such Person under or inconnection with this Agreement or any other Loan Document (except to the extentthat any of the foregoing are found by a final and nonappealable decision of acourt of competent jurisdiction to have resulted from its or such Person’s owngross negligence or willful misconduct) or (ii) responsible in any manner toany of the Lenders for any recitals, statements, representations or warrantiesmade by any Loan Party or any officer thereof contained in this Agreement orany other Loan Document or in any certificate, report, statement or otherdocument referred to or provided for in, or received by the Agents under or inconnection with, this Agreement or any other Loan Document or for the value,validity, effectiveness, genuineness, enforceability or sufficiency of thisAgreement or any other Loan Document or for any failure of any Loan Party aparty thereto to perform its obligations hereunder or thereunder.  The Agents shall not be under any obligationto any Lender to ascertain or to inquire as to the observance or performance ofany of the agreements contained in, or conditions of, this Agreement or anyother Loan Document, or to inspect the properties, books or records of any LoanParty.

 

10.4.        Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected inrelying, upon any instrument, writing, resolution, notice, consent,certificate, affidavit, letter, telecopy, telex or teletype message, statement,order or other document or conversation believed by it to be genuine andcorrect and to have been signed, sent or made by the proper Person or Persons andupon advice and statements of legal counsel (including counsel to Holdings orthe Borrower), independent accountants and other experts selected by suchAgent.  The Administrative Agent may deemand treat the payee of any Note as the owner thereof for all purposes unless awritten notice of assignment, negotiation or transfer thereof shall have beenfiled with the Administrative Agent. Each Agent shall be fully justified in failing or refusing to take anyaction under this Agreement or any other Loan Document unless it shall firstreceive such advice or concurrence of the Required Lenders (or, if so specifiedby this Agreement, all Lenders) as it deems appropriate or it shall first beindemnified to its satisfaction by the Lenders against any and all liabilityand expense that may be incurred by it by reason of taking or continuing totake any such action.  The Agents shallin all cases be fully protected in acting, or in refraining from acting, underthis Agreement and the other Loan Documents in accordance with a request of theRequired Lenders (or, if so specified by this Agreement, all Lenders), and suchrequest and any action taken or failure to act pursuant thereto shall bebinding upon all the Lenders and all future holders of the Loans.

 

10.5.        Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrenceof any Default or Event of Default hereunder unless such Agent has receivednotice from a Lender, Holdings or the Borrower referring to this Agreement,describing such Default or Event of Default and stating that such notice is a“notice of default”.  In the event thatthe Administrative Agent receives such a notice, the Administrative Agent shallgive notice thereof to the Lenders.  TheAdministrative Agent shall take such action with respect to such Default orEvent of Default as shall be reasonably directed by the Required Lenders (or,if so

 

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specified by this Agreement, all Lenders or any other instructing groupof Lenders specified by this Agreement); provided that unless and until theAdministrative Agent shall have received such directions, the AdministrativeAgent may (but shall not be obligated to) take such action, or refrain fromtaking such action, with respect to such Default or Event of Default as itshall deem advisable in the best interests of the Lenders.

 

10.6.        Non-Reliance on Agents and Other Lenders.  Each Lender expressly acknowledges thatneither the Agents nor any of their respective officers, directors, employees,agents, attorneys-in-fact or Affiliates have made any representations orwarranties to it and that no act by any Agent hereafter taken, including anyreview of the affairs of a Loan Party or any Affiliate of a Loan Party, shallbe deemed to constitute any representation or warranty by any Agent to anyLender.  Each Lender represents to theAgents that it has, independently and without reliance upon any Agent or anyother Lender, and based on such documents and information as it has deemed appropriate,made its own appraisal of and investigation into the business, operations,property, financial and other condition and creditworthiness of the LoanParties and their Affiliates and made its own decision to make its Loanshereunder and enter into this Agreement. Each Lender also represents that it will, independently and withoutreliance upon any Agent or any other Lender, and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit analysis, appraisals and decisions in taking or not taking action underthis Agreement and the other Loan Documents, and to make such investigation asit deems necessary to inform itself as to the business, operations, property,financial and other condition and creditworthiness of the Loan Parties andtheir Affiliates.  Except for notices,reports and other documents expressly required to be furnished to the Lendersby the Administrative Agent hereunder, the Administrative Agent shall not haveany duty or responsibility to provide any Lender with any credit or otherinformation concerning the business, operations, property, condition (financialor otherwise), prospects or creditworthiness of any Loan Party or any Affiliateof a Loan Party that may come into the possession of the Administrative Agentor any of its officers, directors, employees, agents, attorneys-in-fact orAffiliates.

 

10.7.        Indemnification. The Lenders agree to indemnify each Agent in its capacity as such (tothe extent not reimbursed by Holdings or the Borrower and without limiting theobligation of Holdings or the Borrower to do so), ratably according to theirrespective Aggregate Exposure Percentages in effect on the date on whichindemnification is sought under this Section (or, if indemnification is soughtafter the date upon which the Commitments shall have terminated and the Loansshall have been paid in full, ratably in accordance with such AggregateExposure Percentages immediately prior to such date), from and against any andall liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind whatsoever that may at anytime (whether before or after the payment of the Loans) be imposed on, incurredby or asserted against such Agent in any way relating to or arising out of, theCommitments, this Agreement, any of the other Loan Documents or any documentscontemplated by or referred to herein or therein or the transactionscontemplated hereby or thereby or any action taken or omitted by such Agentunder or in connection with any of the foregoing; provided that no Lender shallbe liable for the payment of any portion of such liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses or

 

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disbursements that are found by a final and nonappealable decision of acourt of competent jurisdiction to have resulted from such Agent’s grossnegligence or willful misconduct.  Theagreements in this Section shall survive the payment of the Loans and all otheramounts payable hereunder.

 

10.8.        Agent in Its Individual Capacity.  Each Agent and its Affiliates may make loansto, accept deposits from and generally engage in any kind of business with anyLoan Party as though such Agent were not an Agent.  With respect to its Loans made or renewed byit and with respect to any Letter of Credit issued or participated in by it,each Agent shall have the same rights and powers under this Agreement and theother Loan Documents as any Lender and may exercise the same as though it werenot an Agent, and the terms “Lender” and “Lenders” shall include each Agent inits individual capacity.

 

10.9.        Successor Administrative Agent.  The Administrative Agent may resign as AdministrativeAgent upon 10 Business Days’ notice to the Lenders and the Borrower.  If the Administrative Agent shall resign asAdministrative Agent under this Agreement and the other Loan Documents, thenthe Required Lenders shall appoint from among the Lenders a successor agent forthe Lenders, which successor agent shall (unless an Event of Default underSection 9(a) or Section 9(f) with respect to the Borrower shall have occurredand be continuing) be subject to approval by the Borrower (which approval shallnot be unreasonably withheld or delayed), whereupon such successor agent shallsucceed to the rights, powers and duties of the Administrative Agent, and theterm “Administrative Agent” shall mean such successor agent effective upon suchappointment and approval, and the former Administrative Agent’s rights, powersand duties as Administrative Agent shall be terminated, without any other orfurther act or deed on the part of such former Administrative Agent or any ofthe parties to this Agreement or any holders of the Loans.  If no successor agent has acceptedappointment as Administrative Agent by the date that is 10 Business Daysfollowing a retiring Administrative Agent’s notice of resignation, the retiringAdministrative Agent’s resignation shall nevertheless thereupon becomeeffective and the Lenders shall assume and perform all of the duties of theAdministrative Agent hereunder until such time, if any, as the Required Lendersappoint a successor agent as provided for above.  The Syndication Agent and/or the InitialSyndication Agent may, at any time, by notice to the Lenders and theAdministrative Agent, resign as Syndication Agent or Initial Syndication Agenthereunder, as the case may be, whereupon the duties, rights, obligations andresponsibilities of such Syndication Agent or Initial Syndication Agenthereunder, as the case may be, shall automatically be assumed by, and inure tothe benefit of, the Administrative Agent, without any further act by theSyndication Agent, the Initial Syndication Agent, the Administrative Agent orany Lender.  After any retiringAdministrative Agent’s resignation as Administrative Agent, the provisions ofthis Section 10 shall inure to its benefit as to any actions taken or omittedto be taken by it while it was Administrative Agent under this Agreement andthe other Loan Documents.

 

10.10.      Agents Generally. Except as expressly set forth herein, no Agent shall have any duties orresponsibilities hereunder in its capacity as such.

 

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10.11.      The Lead Arrangers. The Lead Arranger and each Initial Lead Arranger, in its capacity assuch, shall have no duties or responsibilities, and shall incur no liability,under this Agreement and other Loan Documents.

 

10.12.      Withholding Tax.  Tothe extent required by any applicable law, the Administrative Agent maywithhold from any interest payment to any Lender an amount equivalent to anyapplicable withholding tax.  If anyGovernmental Authority asserts a claim that the Administrative Agent did notproperly withhold tax from amounts paid to or for the account of any Lenderbecause the appropriate form was not delivered or was not properly executed orbecause such Lender failed to notify the Administrative Agent of a change in circumstancewhich rendered the exemption from, or reduction of, withholding tax ineffectiveor for any other reason, such Lender shall indemnify the Administrative Agentfully for all amounts paid, directly or indirectly, by the Administrative Agentas tax or otherwise, including any penalties or interest and together with allexpenses (including legal expenses, allocated internal costs and out-of-pocketexpenses) incurred.

 

10.13.      Intercreditor Agreement. Each Lender hereby consents to and approves each and all of theprovisions of the Intercreditor Agreement substantially in the form of ExhibitN, and irrevocably authorizes and directs the Administrative Agent to executeand deliver the Intercreditor Agreement and to exercise and enforce its rightsand remedies and perform its obligations thereunder.

 

SECTION 11.  MISCELLANEOUS

 

11.1.        Amendments and Waivers. Neither this Agreement, any other Loan Document, nor any terms hereof orthereof may be amended, supplemented or modified except in accordance with theprovisions of this Section 11.1.  TheRequired Lenders and each Loan Party party to the relevant Loan Document may,or, with the written consent of the Required Lenders, the Administrative Agentand each Loan Party party to the relevant Loan Document may, from time to time,(a) enter into written amendments, supplements or modifications hereto and tothe other Loan Documents for the purpose of adding any provisions to thisAgreement or the other Loan Documents or changing in any manner the rights of theLenders or of the Loan Parties hereunder or thereunder or (b) waive, on suchterms and conditions as the Required Lenders or the Administrative Agent, asthe case may be, may specify in such instrument, any of the requirements ofthis Agreement or the other Loan Documents or any Default or Event of Defaultand its consequences; provided, however, that no such waiver andno such amendment, supplement or modification shall (i) forgive any principalamount or extend the final scheduled date of maturity of any Loan, extend thescheduled date of any amortization payment in respect of any Term Loan, reducethe stated rate of any interest or fee payable hereunder (except (x) inconnection with the waiver of applicability of any post-default increase ininterest rates, which waiver shall be effective with the consent of theRequired Lenders) and (y) that any amendment or modification of defined termsused in the financial covenants in this Agreement shall not constitute areduction in the rate of interest or fees for purposes of this clause (i)) orextend the scheduled date of any payment thereof, or increase the amount orextend the expiration date of any Lender’s Revolving Commitment, in each casewithout the written consent of each Lender directly affected thereby;  (ii) eliminate or reduce the voting rights ofany Lender under this

 

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Section 11.1 without the written consent of such Lender; (iii) reduceany percentage specified in the definition of Required Lenders, consent to theassignment or transfer by the Borrower of any of its rights and obligationsunder this Agreement and the other Loan Documents, release all or substantiallyall of the Collateral or release any Subsidiary Guarantor from its obligations underthe Guarantee and Collateral Agreement (except as otherwise expressly permittedhereunder or under the other Loan Documents), in each case without the writtenconsent of all Lenders; (iv) amend, modify or waive any condition precedent toany extension of credit under the Revolving Facility set forth in Section 6.2(including in connection with any waiver of an existing Default or Event ofDefault) without the written consent of the Majority Facility Lenders withrespect to the Revolving Facility; (v) amend, modify or waive anyprovision of Section 4.8 without the written consent of the Majority FacilityLenders in respect of the Facility adversely affected thereby; (vi) reduce thepercentage specified in the definition of Majority Facility Lenders with respectto any Facility without the written consent of all Lenders under such Facility;(vii) reduce the amounts required to be applied to prepay the Loans pursuant tosection 4.2, or amend any of the defined terms herein in such a manner as tocreate a similar result without the written consent of the Majority FacilityLenders of each adversely affected facility; (viii) amend, modify or waive anyprovision of Section 10 without the written consent of each Agent adverselyaffected thereby; (ix) amend, modify or waive any provision of Section 3.3 or3.4 without the written consent of the Swingline Lender; or (x) amend, modifyor waive any provision of Sections 3.7 to 3.14 without the written consent ofthe Issuing Lender.  Any such waiver andany such amendment, supplement or modification shall apply equally to each ofthe Lenders and shall be binding upon the Loan Parties, the Lenders, the Agentsand all future holders of the Loans.  Inthe case of any waiver, the Loan Parties, the Lenders and the Agents shall berestored to their former position and rights hereunder and under the other LoanDocuments, and any Default or Event of Default waived shall be deemed to becured and not continuing; but no such waiver shall extend to any subsequent orother Default or Event of Default, or impair any right consequent thereon.

 

Notwithstandingthe foregoing, this Agreement may be amended (or amended and restated) with thewritten consent of the Required Lenders, the Administrative Agent and theBorrower (a) to add one or more additional credit facilities to this Agreementand to permit the extensions of credit from time to time outstanding thereunderand the accrued interest and fees in respect thereof (collectively, the “AdditionalExtensions of Credit”) to share ratably in the benefits of this Agreementand the other Loan Documents with the Term Loans and Revolving Extensions ofCredit and the accrued interest and fees in respect thereof and (b) to includeappropriately the Lenders holding such credit facilities in any determinationof the Required Lenders and Majority Facility Lenders; provided, that nosuch amendment shall permit the Additional Extensions of Credit to shareratably with or with preference to the Term Loans in the application ofmandatory prepayments without the consent of the Majority Facility Lendersunder the Term Loan Facility or otherwise to share ratably with or withpreference to the Revolving Extensions of Credit without the consent of theMajority Facility Lenders under the Revolving Facility.

 

In addition,notwithstanding the foregoing, this Agreement may be amended with the writtenconsent of the Administrative Agent, the Borrower and the Lenders providing the

 

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relevantReplacement Term Loans (as defined below) to permit the refinancing of alloutstanding Term Loans (“Refinanced Term Loans”) with a replacement termloan tranche hereunder (“Replacement Term Loans”), provided that(a) the aggregate principal amount of such Replacement Term Loans shall notexceed the aggregate principal amount of such Refinanced Term Loans, (b) theApplicable Margin for such Replacement Term Loans shall not be higher than theApplicable Margin for such Refinanced Term Loans, (c) the weighted average lifeto maturity of such Replacement Term Loans shall not be shorter than theweighted average life to maturity of such Refinanced Term Loans at the time ofsuch refinancing and (d) all other terms applicable to such Replacement TermLoans shall be substantially identical to, or less favorable to the Lendersproviding such Replacement Term Loans than, those applicable to such RefinancedTerm Loans, except to the extent necessary to provide for covenants and otherterms applicable to any period after the latest final maturity of the TermLoans in effect immediately prior to such refinancing.

 

11.2.        Notices.  Allnotices, requests and demands to or upon the respective parties hereto to beeffective shall be in writing (including by telecopy), and, unless otherwiseexpressly provided herein, shall be deemed to have been duly given or made whendelivered, or three Business Days after being deposited in the mail, postageprepaid, or, in the case of telecopy notice, when received, addressed asfollows in the case of Holdings, the Borrower and the Agents, and as set forthin an administrative questionnaire delivered to the Administrative Agent in thecase of the Lenders, or to such other address as may be hereafter notified bythe respective parties hereto:

 

Holdings:

 

Protection One, Inc.

 

 

1035 N. 3rd Street, Suite 101

 

 

Lawrence, KS 66044

 

 

Attention: Darius Nevin

 

 

Telecopy: (877) 299-0111

 

 

Telephone: (305) 594-0231

 

 

 

The Borrower:

 

Protection One Alarm Monitoring, Inc.

 

 

1035 N. 3rd Street, Suite 101

 

 

Lawrence, KS 66044

 

 

Attention: Darius Nevin

 

 

Telecopy: (877) 299-0111

 

 

Telephone: (305) 594-0231

 

 

 

 

 

with a copy to:

 

 

 

 

 

Kirkland & Ellis LLP

 

 

Attention: Louis R. Hernandez

 

 

200 East Randolph Drive

 

 

Chicago, Illinois 60601-6636

 

 

Telecopy: (312)861-2200

 

 

Telephone: (312)-861-2029

 

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The Administrative Agent:

 

Bear Stearns Corporate Lending Inc.

 

 

383 Madison Avenue

 

 

New York, NY 10179

 

 

Attention: Stephen O’Keefe

 

 

Telecopy: (212) 272-9743

 

 

Telephone: (212) 272-9430

 

 

 

 

 

with a copy to:

 

 

 

 

 

Latham & Watkins LLP

 

 

Attention: Michele O. Penzer

 

 

885 Third Avenue, Suite 1000

 

 

New York, New York 10022

 

 

Telecopy: (212) 751-4864

 

 

Telephone: (212)-906-1200

 

providedthat any notice, request or demand to or upon any Agent, the Issuing Lender orthe Lenders shall not be effective until received.

 

Notices and othercommunications to the Lenders hereunder may be delivered or furnished byelectronic communications pursuant to procedures approved by the AdministrativeAgent; provided that the foregoing shall not apply to notices pursuantto Section 2 unless otherwise agreed by the Administrative Agent and theapplicable Lender.  The AdministrativeAgent or the Borrower may, in its discretion, agree to accept notices and othercommunications to it hereunder by electronic communications pursuant toprocedures approved by it; provided that approval of such procedures maybe limited to particular notices or communications.

 

11.3.        No Waiver; Cumulative Remedies.  No failure to exercise and no delay inexercising, on the part of any Agent or any Lender, any right, remedy, power orprivilege hereunder or under the other Loan Documents shall operate as a waiverthereof; nor shall any single or partial exercise of any right, remedy, poweror privilege hereunder preclude any other or further exercise thereof or theexercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges hereinprovided are cumulative and not exclusive of any rights, remedies, powers andprivileges provided by law.

 

11.4.        Survival of Representations and Warranties.  All representations and warranties madehereunder, in the other Loan Documents and in any document, certificate orstatement delivered pursuant hereto or in connection herewith shall survive theexecution and delivery of this Agreement and the making of the Loans and otherextensions of credit hereunder.

 

11.5.        Payment of Expenses and Taxes.  The Borrower agrees (a) to pay or reimburseeach Agent for all its reasonable out-of-pocket costs and expenses incurred inconnection with the development, preparation and execution of, and anyamendment, supplement or modification to, this Agreement and the other LoanDocuments and any other documents

 

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prepared in connection herewith or therewith, and the consummation andadministration of the transactions contemplated hereby and thereby, includingthe reasonable fees and disbursements of one counsel to such Agents (togetherwith such other special or local counsel as such Agents may deem appropriate)and filing and recording fees and expenses, with statements with respect to theforegoing to be submitted to the Borrower prior to the Restatement Date (in thecase of amounts to be paid on the Restatement Date) and from time to timethereafter on a monthly basis or such other periodic basis as such Agent shalldeem appropriate, provided, however, that the Borrower shall havereceived an invoice or similar writing setting forth such charges in reasonabledetail prior to the date such amounts are due, (b) to pay or reimburse eachLender and Agent for all its out-of-pocket costs and expenses incurred inconnection with the enforcement or preservation of any rights under thisAgreement, the other Loan Documents and any such other documents, including thefees and disbursements of counsel to each Lender and of counsel to such Agent,(c) to pay, indemnify, and hold each Lender and Agent harmless from, any andall recording and filing fees and any and all liabilities with respect to, orresulting from any delay in paying, stamp, excise and other taxes, if any, thatmay be payable or determined to be payable in connection with the execution anddelivery of, or consummation or administration of any of the transactionscontemplated by, or any amendment, supplement or modification of, or any waiveror consent under or in respect of, this Agreement, the other Loan Documents andany such other documents, and (d) to pay, indemnify, and hold each Lender andAgent and their respective officers, directors, employees, Affiliates, agentsand controlling persons (each, an “Indemnitee”) harmless from andagainst any and all other liabilities, obligations, losses, damages, penalties,actions, judgments, suits, costs, expenses or disbursements of any kind ornature whatsoever with respect to the execution, delivery, enforcement,performance and administration of this Agreement, the other Loan Documents andany such other documents, including any of the foregoing relating to the use ofproceeds of the Loans or the violation of, noncompliance with or liabilityunder, any Environmental Law applicable to the operations of any Group Memberor any of the Properties or the unauthorized use by Persons of information orother materials sent through electronic, telecommunications or otherinformation transmission systems that are intercepted by such Persons and thereasonable fees and expenses of one legal counsel (in addition to such localand special counsel as the Indemnitees shall deem appropriate) in connectionwith claims, actions or proceedings by any Indemnitee against any Loan Partyunder any Loan Document (all the foregoing in this clause (d), collectively,the “Indemnified Liabilities”); provided, that the Borrower shallhave no obligation hereunder to any Indemnitee with respect to (i) IndemnifiedLiabilities to the extent such Indemnified Liabilities are found by a final andnonappealable decision of a court of competent jurisdiction to have resultedfrom the gross negligence or willful misconduct of such Indemnitee (or any ofits officers, directors, or employees acting within the scope of their duties),(ii) claims brought solely by one Indemnitee against another, or (iii) special,exemplary, consequential or punitive damages arising out of the transactionscontemplated hereunder; provided further, that it is understoodthe provisions of clause (d) as to each Lender are not intended to grantadditional rights to Lenders similar to those granted to the Agents underclause (a) above, the reimbursement of which is intended to be controlledsolely by such clause.  Without limitingthe foregoing, and to the extent permitted by applicable law, the Borroweragrees not to assert and to cause its Subsidiaries not to assert, and herebywaives and agrees to cause its Subsidiaries to waive, all rights forcontribution or any other rights of recovery with respect to all claims,demands, penalties, fines, liabilities,

 

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settlements, damages, costs and expenses of whatever kind or nature,under or related to Environmental Laws, that any of them might have by statuteor otherwise against any Indemnitee.  Allamounts due under this Section 11.5 shall be payable not later than 10 daysafter written demand therefor. Statements payable by the Borrower pursuant to this Section 11.5 shallbe submitted to Darius Nevin (Telephone No. (305) 599-0231) (Telecopy No.(877) 299-0111), at the address of the Borrower set forth in Section 11.2, orto such other Person or address as may be hereafter designated by the Borrowerin a written notice to the Administrative Agent.  The agreements in this Section 11.5 shallsurvive repayment of the Loans and all other amounts payable hereunder.

 

11.6.        Successors and Assigns; Participations and Assignments.  (a) The provisions of this Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assignspermitted hereby (including any Affiliate of the Issuing Lender that issues anyLetter of Credit), except that (i) the Borrower may not assign or otherwisetransfer any of its rights or obligations hereunder without the prior writtenconsent of each Lender (and any attempted assignment or transfer by theBorrower without such consent shall be null and void) and (ii) no Lender mayassign or otherwise transfer its rights or obligations hereunder except inaccordance with this Section.

 

(b)   (i)  Subject to the conditions set forth inparagraph (b)(ii) below, any Lender may assign to one or more EligibleAssignees (each, an “Assignee”) all or a portion of its rights andobligations under this Agreement (including all or a portion of its Commitmentsand the Loans at the time owing to it) with the prior written consent (suchconsent not to be unreasonably withheld) of:

 

(A)the Borrower, provided that no consent of the Borrower shall be requiredfor an assignment (i) to a Lender, an Affiliate of a Lender, an ApprovedFund or, if an Event of Default has occurred and is continuing, any otherPerson or (ii) of Term Loans; and

 

(B)the Administrative Agent, provided that no consent of the AdministrativeAgent shall be required for an assignment to an Assignee that is a Lenderimmediately prior to giving effect to such assignment, except in the case of anassignment of a Revolving Commitment to an Assignee that does not already havea Revolving Commitment.

 

(ii) Assignments shall be subject to the following additionalconditions:
 

(A) exceptin the case of an assignment to a Lender, an Affiliate of a Lender or anApproved Fund or an assignment of the entire remaining amount of the assigningLender’s Commitments or Loans under any Facility, the amount of the Commitmentsor Loans of the assigning Lender subject to each such assignment (determined asof the date the Assignment and Assumption with respect to such assignment isdelivered to the Administrative Agent) shall not be less than $1,000,000 unlesseach of the Borrower and the Administrative Agent otherwise consent, providedthat (1) no such consent of the Borrower shall be required if an Event ofDefault has

 

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occurred and is continuing and (2) such amounts shallbe aggregated in respect of each Lender and its Affiliates or Approved Funds,if any;

 

(B)the Assignee, if it shall not be a Lender, shall deliver to the AdministrativeAgent an administrative questionnaire and all appropriate tax forms requiredunder Section 4.10; and

 

(C) in the case of an assignment to a CLO, theassigning Lender shall retain the sole right to approve any amendment,modification or waiver of any provision of this Agreement and the other LoanDocuments, provided that the Assignment and Assumption between suchLender and such CLO may provide that such Lender will not, without the consentof such CLO, agree to any amendment, modification or waiver that (1) requiresthe consent of each Lender directly affected thereby pursuant to the proviso tothe second sentence of Section 10.1 and (2) directly affects such CLO.

 

(iii) Subject to acceptance and recording thereof pursuant toparagraph (b)(iv) below, from and after the effective date specified ineach Assignment and Assumption the Assignee thereunder shall be a party heretoand, to the extent of the interest assigned by such Assignment and Assumption,have the rights and obligations of a Lender under this Agreement, and theassigning Lender thereunder shall, to the extent of the interest assigned bysuch Assignment and Assumption, be released from its obligations under thisAgreement (and, in the case of an Assignment and Assumption covering all of theassigning Lender’s rights and obligations under this Agreement, such Lendershall cease to be a party hereto but shall continue to be entitled to thebenefits of Sections 4.9, 4.10, 4.11 and 11.5).  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with thisSection 10.6 shall be treated for purposes of this Agreement as a sale by suchLender of a participation in such rights and obligations in accordance withparagraph (c) of this Section.
 

(iv)  TheAdministrative Agent, acting for this purpose as an agent of the Borrower,shall maintain at one of its offices a register for the recordation of thenames and addresses of the Lenders, and the Commitments of, and principalamount of the Loans and L/C Obligations owing to, each Lender pursuant to theterms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, and the Borrower, the Administrative Agent, the Issuing Lender andthe Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement, notwithstanding notice to the contrary.  The Register shall be available forinspection by the Borrower, the Issuing Lender and any Lender, at anyreasonable time and from time to time upon reasonable prior notice.

 

(v)  Upon itsreceipt of a duly completed Assignment and Assumption executed by an assigningLender and an Assignee, the Assignee’s completed administrative questionnaire(unless the Assignee shall already be a Lender hereunder), and any writtenconsent to such assignment required by paragraph (b) of this Section, theAdministrative Agent shall accept such Assignment and Assumption and record theinformation

 

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contained therein in the Register.  No assignment shall be effective for purposesof this Agreement unless it has been recorded in the Register as provided inthis paragraph.

 

(c)   (i)  Any Lender may, without the consent of theBorrower or the Administrative Agent, sell participations to one or more banksor other entities (a “Participant”) in all or a portion of such Lender’srights and obligations under this Agreement (including all or a portion of itsCommitments and the Loans owing to it); provided that (A) suchLender’s obligations under this Agreement shall remain unchanged, (B) suchLender shall remain solely responsible to the other parties hereto for theperformance of such obligations and (C) the Borrower, the AdministrativeAgent, the Issuing Lender and the other Lenders shall continue to deal solelyand directly with such Lender in connection with such Lender’s rights andobligations under this Agreement.  Anyagreement pursuant to which a Lender sells such a participation shall providethat such Lender shall retain the sole right to enforce this Agreement and toapprove any amendment, modification or waiver of any provision of thisAgreement; provided that such agreement may provide that such Lenderwill not, without the consent of the Participant, agree to any amendment,modification or waiver that (1) requires the consent of each Lender directlyaffected thereby pursuant to the proviso to the second sentence of Section 11.1and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees thateach Participant shall be entitled to the benefits of Sections 4.9, 4.10 or4.11 to the same extent as if it were a Lender and had acquired its interest byassignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, eachParticipant also shall be entitled to the benefits of Section 11.7(b) asthough it were a Lender, provided such Participant shall be subject to Section11.7(a) as though it were a Lender.

 

(ii)  AParticipant shall not be entitled to receive any greater payment under Section4.9 or 4.10 than the applicable Lender would have been entitled to receive withrespect to the participation sold to such Participant, unless the sale of theparticipation to such Participant is made with the Borrower’s prior writtenconsent.  Any Participant that is aNon-U.S. Lender shall not be entitled to the benefits of Section 4.10unless such Participant complies with Section 4.10(e).

 

(d) Any Lender may at any time pledge or assign a security interest in allor any portion of its rights under this Agreement to secure obligations of suchLender, including any pledge or assignment to secure obligations to a FederalReserve Bank, and this Section shall not apply to any such pledge or assignmentof a security interest; provided that no such pledge or assignment of asecurity interest shall release a Lender from any of its obligations hereunderor substitute any such pledgee or assignee for such Lender as a party hereto.

 

(e) The Borrower, upon receipt of written notice from the relevant Lender,agrees to issue Notes to any Lender requiring Notes to facilitate transactionsof the type described in paragraph (d) above.

 

(f) Notwithstanding the foregoing, any Conduit Lender may assign any or allof the Loans it may have funded hereunder to its designating Lender without theconsent of the

 

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Borrower orthe Administrative Agent and without regard to the limitations set forth inSection 11.6(b).  Each of Holdings, theBorrower, each Lender and the Administrative Agent hereby confirms that it willnot institute against a Conduit Lender or join any other Person in institutingagainst a Conduit Lender any bankruptcy, reorganization, arrangement,insolvency or liquidation proceeding under any state bankruptcy or similar law,for one year and one day after the payment in full of the latest maturingcommercial paper note issued by such Conduit Lender; provided, however,that each Lender designating any Conduit Lender hereby agrees to indemnify,save and hold harmless each other party hereto for any loss, cost, damage orexpense arising out of its inability to institute such a proceeding againstsuch Conduit Lender during such period of forbearance.

 

11.7.        Adjustments; Set-off. (a)  Except to the extent thatthis Agreement expressly provides for payments to be allocated to a particularLender or to the Lenders under a particular Facility, if any Lender (a “BenefitedLender”) shall receive any payment of all or part of the Obligations owingto it, or receive any collateral in respect thereof (whether voluntarily orinvoluntarily, by set-off, pursuant to events or proceedings of the naturereferred to in Section 9(f), or otherwise), in a greater proportion than anysuch payment to or collateral received by any other Lender, if any, in respectof the Obligations owing to such other Lender, such Benefited Lender shallpurchase for cash from the other Lenders a participating interest in suchportion of the Obligations owing to each such other Lender, or shall providesuch other Lenders with the benefits of any such collateral, as shall benecessary to cause such Benefited Lender to share the excess payment orbenefits of such collateral ratably with each of the Lenders; provided,however, that if all or any portion of such excess payment or benefits is thereafterrecovered from such Benefited Lender, such purchase shall be rescinded, and thepurchase price and benefits returned, to the extent of such recovery, butwithout interest.

 

(b)   Upon the occurrence and during thecontinuance of any Event of Default, in addition to any rights and remedies ofthe Lenders provided by law, each Lender shall have the right, without priornotice to Holdings or the Borrower, any such notice being expressly waived byHoldings and the Borrower to the extent permitted by applicable law, upon anyamount becoming due and payable by Holdings or the Borrower hereunder (whetherat the stated maturity, by acceleration or otherwise), to set off andappropriate and apply against such amount any and all deposits (general orspecial, time or demand, provisional or final, other than payroll accounts, taxwithholding accounts and trust accounts), in any currency, and any othercredits, indebtedness or claims, in any currency, in each case whether director indirect, absolute or contingent, matured or unmatured, at any time held orowing by such Lender or any branch or agency thereof to or for the credit orthe account of Holdings or the Borrower, as the case may be.  Each Lender agrees promptly to notify theBorrower and the Administrative Agent after any such setoff and applicationmade by such Lender, provided that the failure to give such notice shallnot affect the validity of such setoff and application.

 

11.8.        Counterparts. This Agreement may be executed by one or more of the parties to thisAgreement on any number of separate counterparts, and all of said counterpartstaken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page ofthis Agreement by facsimile transmission shall be effective as

 

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delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signedby all the parties shall be lodged with the Borrower and the AdministrativeAgent.

 

11.9.        Severability.  Anyprovision of this Agreement that is prohibited or unenforceable in anyjurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition or unenforceability without invalidating the remainingprovisions hereof, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction.

 

11.10.      Integration.  ThisAgreement and the other Loan Documents represent the entire agreement of Holdings,the Borrower, the Agents and the Lenders with respect to the subject matterhereof and thereof, and there are no promises, undertakings, representations orwarranties by any Agent or any Lender relative to subject matter hereof notexpressly set forth or referred to herein or in the other Loan Documents.

 

11.11.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONSOF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

11.12.      Submission To Jurisdiction; Waivers.  Each of Holdings and the Borrower herebyirrevocably and unconditionally:

 

(a)   submits for itself and its property in anylegal action or proceeding relating to this Agreement and the other LoanDocuments to which it is a party, or for recognition and enforcement of anyjudgment in respect thereof, to the non-exclusive general jurisdiction of thecourts of the State of New York, the courts of the United States for theSouthern District of New York, and appellate courts from any thereof;

 

(b)   consents that any such action or proceedingmay be brought in such courts and waives any objection that it may now orhereafter have to the venue of any such action or proceeding in any such courtor that such action or proceeding was brought in an inconvenient court andagrees not to plead or claim the same;

 

(c)   agrees that service of process in any suchaction or proceeding may be effected by mailing a copy thereof by registered orcertified mail (or any substantially similar form of mail), postage prepaid, toHoldings or the Borrower, as the case may be at its address set forth inSection 11.2 or at such other address of which the Administrative Agent shallhave been notified pursuant thereto;

 

(d)   agrees that nothing herein shall affect theright to effect service of process in any other manner permitted by law orshall limit the right to sue in any other jurisdiction; and

 

(e)   waives, to the maximum extent not prohibitedby law, any right it may have to claim or recover in any legal action orproceeding referred to in this Section any special, exemplary, punitive orconsequential damages.

 

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11.13.      Acknowledgments. Each of Holdings and the Borrower hereby acknowledges that:

 

(a)   it has been advised by counsel in thenegotiation, execution and delivery of this Agreement and the other LoanDocuments;

 

(b)   no Agent or Lender has any fiduciaryrelationship with or duty to Holdings or the Borrower arising out of or inconnection with this Agreement or any of the other Loan Documents, and therelationship between the Agents and Lenders, on the one hand, and Holdings andthe Borrower, on the other hand, in connection herewith or therewith is solelythat of debtor and creditor; and

 

(c)   no joint venture is created hereby or by theother Loan Documents or otherwise exists by virtue of the transactionscontemplated hereby among the Lenders or among Holdings, the Borrower and theLenders.

 

11.14.      Releases of Guarantees and Liens.  (a) Notwithstanding anything to the contrary contained herein or in anyother Loan Document, the Administrative Agent is hereby irrevocably authorizedby each Lender (without requirement of notice to or consent of any Lenderexcept as expressly required by Section 11.1) to take any action requested bythe Borrower having the effect of releasing any Collateral or guaranteeobligations (i) to the extent necessary to permit consummation of anytransaction not prohibited by any Loan Document or that has been consented toin accordance with Section 11.1 or (ii) under the circumstances described inparagraph (b) below.

 

(b)   At such time as the Loans, the ReimbursementObligations and the other obligations under the Loan Documents (other than obligationsunder or in respect of Hedge Agreements) shall have been paid in full, theCommitments have been terminated and no Letters of Credit shall be outstanding,the Collateral shall be released from the Liens created by the SecurityDocuments, and the Security Documents and all obligations (other than thoseexpressly stated to survive such termination) of the Administrative Agent andeach Loan Party under the Security Documents shall terminate, all withoutdelivery of any instrument or performance of any act by any Person.

 

11.15.      Confidentiality. Each Agent and each Lender agrees to keep confidential all non-publicinformation provided to it by any Loan Party or the Sponsor pursuant to thisAgreement that is designated by such Loan Party as confidential; providedthat nothing herein shall prevent any Agent or any Lender from disclosing anysuch information (a) to any Agent, any other Lender or any Affiliate of any ofthem, (b) subject to an agreement to comply with the provisions of thisSection, to any actual or prospective Transferee or any direct or indirectcounterparty to any Hedge Agreement (or any professional advisor to suchcounterparty), (c) to its employees, directors, agents, attorneys, accountantsand other professional advisors or those of any of its Affiliates, (d) upon therequest or demand of any Governmental Authority, (e) in response to any orderof any court or other Governmental Authority or as may otherwise be requiredpursuant to any Requirement of Law, (f) if requested or required to do so inconnection with any litigation or similar proceeding, (g) that has beenpublicly disclosed (except pursuant to

 

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a breach of the confidentiality obligations of this Section 11.15), (h)to the National Association of Insurance Commissioners or any similarorganization or any nationally recognized rating agency that requires access toinformation about a Lender’s investment portfolio in connection with ratingsissued with respect to such Lender, or (i) in connection with the exercise ofany remedy hereunder or under any other Loan Document;  provided, unless specificallyprohibited by applicable law or court order, each Lender shall make reasonableefforts to notify the Borrower of any request by any Governmental Authority orrepresentative thereof (other than any such request in connection with anyexamination of the financial condition or other routine examination of suchLender by such Governmental Authority) for disclosure of any such non-publicinformation prior to disclosure of such information.

 

11.16.      WAIVERS OF JURY TRIAL.  HOLDINGS, THE BORROWER, THE AGENTS AND THELENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGALACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT ANDFOR ANY COUNTERCLAIM THEREIN.

 

11.17.      Delivery of Addenda. Each initial Lender shall become a party to this Agreement by deliveringto the Administrative Agent an Addendum duly executed by such Lender.

 

11.18.      Subordination of Intercompany Indebtedness Each of theBorrower and Holdings agrees that it will not become obligated or otherwiseliable for any intercompany Indebtedness that is owed to any Subsidiary, unlesssuch Subsidiary agrees that (a) such Indebtedness is completely subordinated tothe Obligations and subject in rights of payment to the prior payment in fullof the Obligations (other than contingent indemnity obligations for which noclaim has been made), (b) if an Event of Default has occurred and is continuing,no payment on any such Indebtedness shall be made until the payment in full ofthe Obligations, and (c) such Indebtedness shall be evidenced by a SubordinatedIntercompany Note, which note, if evidencing obligations owed to a Loan Party,shall be pledged as Collateral to the Administrative Agent.

 

11.19.      USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to therequirements of the USA PATRIOT Act (Title III of Publ. L. 107-56 (signed intolaw October 26, 2001)), (the “Patriot Act”), and the Lenders’ policiesand practices, it is required to obtain, verify and record information thatidentifies the Borrower, which information includes the name and address of theBorrower and other information that will allow such Lender to identify theBorrower in accordance with the Patriot Act.

 

11.20.      Amendment and Restatement. It is the intention of each of the parties hereto that the OriginalCredit Agreement be amended and restated in its entirety pursuant to thisAgreement so as to preserve the perfection and priority of all securityinterests securing indebtedness and obligations under the Original CreditAgreement and that all Indebtedness and Obligations of the Borrower and theGuarantors hereunder shall be secured by the liens evidenced under the LoanDocuments and that this Agreement does not constitute a novation or

 

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termination of the obligations and liabilities existing under theOriginal Credit Agreement (or serve to terminate Sections 4.11, 10.7 and 11.5of the Original Credit Agreement or any of Borrower’s obligations thereunderwith respect to the Existing Lenders or the Continuing Lenders).  This Agreement restates and replaces, in itsentirety, the Original Credit Agreement; any reference in any of the other LoanDocuments to the Original Credit Agreement shall mean this Agreement.

 

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IN WITNESSWHEREOF, the parties hereto have caused this Agreement to be duly executed anddelivered by their proper and duly authorized officers as of the day and yearfirst above written.

 

 

PROTECTION ONE, INC.,

 

 

 

By:

/s/ J. Eric Griffin

 

 

Name:  J. Eric Griffin

 

 

Title:    General Counsel

 

 

 

 

 

 

 

PROTECTION ONE ALARM MONITORING,
INC.,

 

 

 

By:

/s/ Eric Griffin

 

 

Name:  Eric Griffin

 

 

Title:    General Counsel

 

 

 

 

 

 

 

BEAR, STEARNS & CO. INC., as Lead Arranger

 

and Initial Lead Arranger

 

 

 

 

 

By:

/s/ Richard Bram Smith

 

 

Name: Richard Bram Smith

 

 

Title: Senior MD

 

 

 

 

 

 

 

LEHMAN BROTHERS INC., as Initial Lead
Arranger

 

 

 

 

 

By:

/s/ Ritam Bhalla

 

 

Name: Ritam Bhalla

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

BEAR STEARNS CORPORATE LENDING INC.,
as Administrative Agent and as a Lender

 

 

 

 

 

By:

/s/ Victor Bulzacchelli

 

 

Name: Victor Bulzacchelli

 

 

Title: VP

 



 

 

LEHMAN COMMERCIAL PAPER INC., as Initial
Syndication Agent and as a Lender

 

 

 

 

 

By:

/s/ Ritam Bhalla

 

 

Name: Ritam Bhalla

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

LASALLE BANK NATIONAL ASSOCIATION,
as Syndication Agent, Co-Documentation Agent
and as a Lender

 

 

 

 

 

By:

/s/ Mark Melendes

 

 

Name: Mark Melendes

 

 

Title: First VP

 

 

 

 

 

 

 

HARRIS NESBITT FINANCING, INC.,
as Co-Documentation Agent and as a Lender

 

 

 

 

 

By:

/s/ Michael Silverman

 

 

Name: Michael Silverman

 

 

Title: MD

 

 

 

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent and as a Lender

 

 

 

 

 

By:

/s/ Mark Weite Kamp

 

 

Name: Mark Weite Kamp

 

 

Title: VP

 



 

Annex A

 

PRICING GRID FOR REVOLVING LOANS AND SWINGLINE LOANS

 

Pricing
Level

 

Applicable Margin
for Eurodollar Loans

 

Applicable Margin for Base
Rate Loans

 

I

 

 

3.25

%

2.25

%

II

 

 

3.00

%

2.00

%

III

 

 

2.75

%

1.75

%

IV

 

 

2.50

%

1.50

%

V

 

 

2.25

%

1.25

%

 

The ApplicableMargin for Revolving Loans and Swingline Loans shall be adjusted, on and afterthe first Adjustment Date (as defined below) occurring after the completion oftwo full fiscal quarters of the Borrower after the Closing Date, based onchanges in the Consolidated Leverage Ratio, with such adjustments to becomeeffective on the date (the “Adjustment Date”) that is three BusinessDays after the date on which the relevant financial statements are delivered tothe Lenders pursuant to Section 7.1 and to remain in effect until the nextadjustment to be effected pursuant to this paragraph.  If any financial statements referred to aboveare not delivered within the time periods specified in Section 7.1, then, untilthe date that is three Business Days after the date on which such financialstatements are delivered, the highest rate set forth in each column of thePricing Grid shall apply.  On eachAdjustment Date, the Applicable Margin for Revolving Loans and Swingline Loansshall be adjusted to be equal to the Applicable Margins opposite the PricingLevel determined to exist on such Adjustment Date from the financial statementsrelating to such Adjustment Date.

 

As used herein, the following rules shallgovern the determination of Pricing Levels on each Adjustment Date:

 

“Pricing Level I”  shall exist on an Adjustment Date if theConsolidated Leverage Ratio for the relevant period is greater than or equal to3.50 to 1.00.

 

“Pricing Level II”  shall exist on an Adjustment Date if theConsolidated Leverage Ratio for the relevant period is less than 3.50 to 1.00but greater than or equal to 3.00 to 1.00.

 

“Pricing Level III”  shall exist on an Adjustment Date if theConsolidated Leverage Ratio for the relevant period is less than 3.00 to 1.00but greater than or equal to 2.50 to 1.00.

 

“Pricing Level IV”  shall exist on an Adjustment Date if theConsolidated Leverage Ratio for the relevant period is less than 2.50 to 1.00but greater than or equal to 2.00 to 1.00.

 



 

“Pricing Level V”  shall exist on an Adjustment Date if theConsolidated Leverage Ratio for the relevant period is less than 2.00 to 1.00.