credit agreement
Contents
Clause Page
TOC \o "1-2" \u 1. Definitions PAGEREF _Toc245807492 \h 5
1.1 Certain Defined Terms PAGEREF _Toc245807493 \h 5
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement PAGEREF _Toc245807494 \h 25
1.3 Other Definitional Provisions and Rules of Construction PAGEREF _Toc245807495 \h 25
2. Amounts and Terms of Commitments and Loans PAGEREF _Toc245807496 \h 26
2.1 Commitments; Making of Loans; the Register; Optional Notes PAGEREF _Toc245807497 \h 26
2.2 Interest on the Loans PAGEREF _Toc245807498 \h 29
2.3 Fees PAGEREF _Toc245807499 \h 32
2.4 Repayments, Prepayments and Reductions of Revolving Loan Commitment Amount; General Provisions Regarding Payments; Application of Proceeds of Collateral and Payments Under Guaranties PAGEREF _Toc245807500 \h 33
2.5 Use of Proceeds PAGEREF _Toc245807501 \h 39
2.6 Special Provisions Governing Eurodollar Rate Loans PAGEREF _Toc245807502 \h 40
2.7 Increased Costs; Taxes; Capital Adequacy PAGEREF _Toc245807503 \h 42
2.8 Statement of Lenders; Obligation of Lenders to Mitigate PAGEREF _Toc245807504 \h 46
3. replacement of a lender PAGEREF _Toc245807505 \h 46
4. Conditions to Loans PAGEREF _Toc245807506 \h 47
4.1 Conditions to Term Loans and Initial Revolving Loans PAGEREF _Toc245807507 \h 47
4.2 Conditions to All Loans PAGEREF _Toc245807508 \h 54
5. Company's Representations and Warranties PAGEREF _Toc245807509 \h 55
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries PAGEREF _Toc245807510 \h 55
5.2 Authorization of Borrowing, etc PAGEREF _Toc245807511 \h 56
5.3 Financial Condition PAGEREF _Toc245807512 \h 56
5.4 No Material Adverse Change; No Restricted Junior Payments PAGEREF _Toc245807513 \h 57
5.5 Title to Properties; Liens; Real Property; Intellectual Property PAGEREF _Toc245807514 \h 57
5.6 Litigation; Adverse Facts PAGEREF _Toc245807515 \h 58
5.7 Payment of Taxes PAGEREF _Toc245807516 \h 58
5.8 Performance of Agreements PAGEREF _Toc245807517 \h 58
5.9 Governmental Regulation PAGEREF _Toc245807518 \h 58
5.10 Securities Activities PAGEREF _Toc245807519 \h 59
5.11 Employee Benefit Plans PAGEREF _Toc245807520 \h 59
5.12 Certain Fees PAGEREF _Toc245807521 \h 59
5.13 Environmental Protection PAGEREF _Toc245807522 \h 60
5.14 Employee Matters PAGEREF _Toc245807523 \h 60
5.15 Solvency PAGEREF _Toc245807524 \h 60
5.16 Matters Relating to Collateral PAGEREF _Toc245807525 \h 60
5.17 Disclosure PAGEREF _Toc245807526 \h 61
5.18 Foreign Assets Control Regulations, etc. PAGEREF _Toc245807527 \h 61
6. Company's Affirmative Covenants PAGEREF _Toc245807528 \h 62
6.1 Financial Statements and Other Reports. PAGEREF _Toc245807529 \h 62
6.2 Existence, etc. PAGEREF _Toc245807530 \h 65
6.3 Payment of Taxes and Claims; Tax PAGEREF _Toc245807531 \h 66
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation Proceeds PAGEREF _Toc245807532 \h 66
6.5 Inspection Rights; Lender Meeting PAGEREF _Toc245807533 \h 68
6.6 Compliance with Laws, etc. PAGEREF _Toc245807534 \h 68
6.7 Environmental Matters PAGEREF _Toc245807535 \h 69
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents After the Closing Date PAGEREF _Toc245807536 \h 70
6.9 Matters Relating to Additional Real Property Collateral PAGEREF _Toc245807537 \h 71
6.10 Interest Rate Protection PAGEREF _Toc245807538 \h 72
6.11 Deposit Accounts, Securities Accounts and Cash Management Systems PAGEREF _Toc245807539 \h 72
7. Company's Negative Covenants PAGEREF _Toc245807540 \h 72
7.1 Indebtedness PAGEREF _Toc245807541 \h 72
7.2 Liens and Related Matters PAGEREF _Toc245807542 \h 73
7.3 Investments; Acquisitions PAGEREF _Toc245807543 \h 74
7.4 Contingent Obligations PAGEREF _Toc245807544 \h 75
7.5 Restricted Junior Payments PAGEREF _Toc245807545 \h 76
7.6 Financial Covenants PAGEREF _Toc245807546 \h 76
7.7 Restriction on Fundamental Changes; Asset Sales PAGEREF _Toc245807547 \h 78
7.8 Consolidated Capital Expenditures PAGEREF _Toc245807548 \h 79
7.9 Transactions with Shareholders and Affiliates PAGEREF _Toc245807549 \h 79
7.10 Sales and Lease-Backs PAGEREF _Toc245807550 \h 79
7.11 Conduct of Business PAGEREF _Toc245807551 \h 80
7.12 Amendments of Documents Relating to Subordinated Indebtedness PAGEREF _Toc245807552 \h 80
7.13 Fiscal Year PAGEREF _Toc245807553 \h 80
8. Events of Default PAGEREF _Toc245807554 \h 80
8.1 Failure to Make Payments When Due PAGEREF _Toc245807555 \h 80
8.2 Default in Other Agreements PAGEREF _Toc245807556 \h 80
8.3 Breach of Certain Covenants PAGEREF _Toc245807557 \h 81
8.4 Breach of Warranty PAGEREF _Toc245807558 \h 81
8.5 Other Defaults Under Loan Documents PAGEREF _Toc245807559 \h 81
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. PAGEREF _Toc245807560 \h 81
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. PAGEREF _Toc245807561 \h 82
8.8 Judgments and Attachments PAGEREF _Toc245807562 \h 82
8.9 Dissolution PAGEREF _Toc245807563 \h 82
8.10 Employee Benefit Plans PAGEREF _Toc245807564 \h 82
8.11 Material Adverse Effect PAGEREF _Toc245807565 \h 82
8.12 Change in Control PAGEREF _Toc245807566 \h 83
8.13 Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations PAGEREF _Toc245807567 \h 83
9. Administrative Agent PAGEREF _Toc245807568 \h 83
9.1 Appointment PAGEREF _Toc245807569 \h 83
9.2 Powers and Duties; General Immunity PAGEREF _Toc245807570 \h 85
9.3 Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness PAGEREF _Toc245807571 \h 86
9.4 Right to Indemnity. PAGEREF _Toc245807572 \h 86
9.5 Resignation of Agents; Successor Administrative Agent PAGEREF _Toc245807573 \h 87
9.6 Collateral Documents and Guaranties PAGEREF _Toc245807574 \h 87
9.7 Duties of Other Agents PAGEREF _Toc245807575 \h 88
9.8 Administrative Agent May File Proofs of Claim PAGEREF _Toc245807576 \h 88
10. Miscellaneous PAGEREF _Toc245807577 \h 89
10.1 Successors and Assigns; Assignments and Participations in Loans PAGEREF _Toc245807578 \h 89
10.2 Expenses PAGEREF _Toc245807579 \h 92
10.3 Indemnity PAGEREF _Toc245807580 \h 92
10.4 Set-Off PAGEREF _Toc245807581 \h 93
10.5 Ratable Sharing PAGEREF _Toc245807582 \h 93
10.6 Amendments and Waivers PAGEREF _Toc245807583 \h 94
10.7 Independence of Covenants PAGEREF _Toc245807584 \h 95
10.8 Notices; Effectiveness of Signatures PAGEREF _Toc245807585 \h 95
10.9 Survival of Representations, Warranties and Agreements PAGEREF _Toc245807586 \h 96
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative PAGEREF _Toc245807587 \h 96
10.11 Marshalling; Payments Set Aside PAGEREF _Toc245807588 \h 96
10.12 Severability PAGEREF _Toc245807589 \h 97
10.13 Obligations Several; Independent Nature of Lenders' Rights; Damage Waiver PAGEREF _Toc245807590 \h 97
10.14 Release of Security Interest or Guaranty PAGEREF _Toc245807591 \h 97
10.15 Applicable Law PAGEREF _Toc245807592 \h 98
10.16 Construction of Agreement; Nature of Relationship PAGEREF _Toc245807593 \h 98
10.17 Consent to Jurisdiction and Service of Process PAGEREF _Toc245807594 \h 98
10.18 Waiver of Jury Trial PAGEREF _Toc245807595 \h 99
10.19 Confidentiality PAGEREF _Toc245807596 \h 99
10.20 Counterparts; Effectiveness PAGEREF _Toc245807597 \h 100
10.21 USA Patriot Act PAGEREF _Toc245807598 \h 100
EXHIBITS
1 FORM OF NOTICE OF BORROWING
2 FORM OF NOTICE OF CONVERSION/CONTINUATION
3 FORM OF SECURITY AGREEMENT
4 FORM OF TERM NOTE
5 FORM OF MORTGAGE
6 FORM OF REVOLVING NOTE
7 FORM OF PLEDGE AGREEMENT
8 FORM OF COMPLIANCE CERTIFICATE
9 FORM OF OPINION OF COMPANY COUNSEL
10 FORM OF SUBSIDIARY GUARANTY
11 FORM OF ASSIGNMENT AGREEMENT
12 FORM OF SOLVENCY CERTIFICATE
SCHEDULES
1 LENDERS' COMMITMENTS AND PRO RATA SHARES
2 CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
3 FINANCIAL STATEMENTS; PRO FORMA FINANCIAL STATEMENTS
4 CLOSING DATE ENVIRONMENTAL REPORTS
5 CLOSING DATE MORTGAGED PROPERTIES
6 JURISDICTIONS OF ORGANIZATION; OWNERSHIP
7 REAL PROPERTY
8 INTELLECTUAL PROPERTY
9 LITIGATION
10 CERTAIN EXISTING CONTINGENT OBLIGATIONS
11 CERTAIN EMPLOYEE BENEFIT PLANS
12 ENVIRONMENTAL MATTERS
13 CERTAIN EXISTING INDEBTEDNESS
14 CERTAIN EXISTING LIENS
{NAME OF COMPANY}
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of {Credit Agreement Date} and entered into
by and AMONG:
(1){NAME OF COMPANY}, a {Company's State of Organization} corporation (Company);
(2)THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a Lender and collectively as Lenders), ______, as syndication agent for Lenders (in such capacity, Syndication Agent), ______, as documentation agent for Lenders (in such capacity, Documentation Agent); and
(3){NAME OF ADMINISTRATIVE AGENT} ({Short Title for Administrative Agent}), as administrative agent for Lenders (in such capacity, Administrative Agent).
WHEREAS:
(A)Lenders, at the request of Company, have agreed to extend certain credit facilities to Company, the proceeds of which will be used (i) to fund ______, and (ii) to provide financing for working capital and other general corporate purposes of Company and its Subsidiaries;
(B)Company desires to secure all of the Obligations hereunder and under the other Loan Documents by granting to Administrative Agent, on behalf of Lenders, a first priority Lien on substantially all of its personal property and certain of its real property, including a pledge of all of the capital stock of its Domestic Subsidiaries and such amount of the capital stock of its Foreign Subsidiaries as will not result in materially adverse Tax consequences to Company********; and
(C)Subsidiary Guarantors have agreed to guarantee the Obligations and to secure their guaranties by granting to Administrative Agent, on behalf of Lenders, a first priority Lien on substantially all of their personal property and certain of their real property, including a pledge of all of the capital stock of their Domestic Subsidiaries and such amount of the capital stock of their Foreign Subsidiaries as will not result in materially adverse Tax consequences to Company.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Company, Lenders, Syndication Agent, Documentation Agent and Administrative Agent agree as follows:
1.Definitions
1.1Certain Defined Terms
The following terms used in this Agreement shall have the following meanings:
Additional Mortgaged Property has the meaning assigned to that term in subsection 6.9.
Additional Mortgages has the meaning assigned to that term in subsection 6.9.
Administrative Agent has the meaning assigned to that term in the introduction to this Agreement and also means and includes any successor Administrative Agent appointed pursuant to subsection9.5(a).
Affected Lender has the meaning assigned to that term in subsection 2.6(c).
Affected Loans has the meaning assigned to that term in subsection 2.6(c).
Affiliate, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.
Affiliated Funds means Funds that are administered or managed by (i) a single entity or (ii) a group of Affiliated entities.
Agents means Administrative Agent, Documentation Agent and Syndication Agent.
Aggregate Amounts Due has the meaning assigned to that term in subsection 10.5.
Agreement means this Credit Agreement dated as of ______.
“Applicable Laws” shall mean all applicable laws, ordinances, judgments, decrees, injunctions, writs, rules, regulations, conventions, orders, interpretations, licenses, permits and orders of any court, arbitrator or Government Authority in any relevant jurisdiction.
Approved Fund means a Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.
Asset Sale means the sale by Company or any of its Subsidiaries to any Person other than Company or any of its wholly-owned Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii) substantially all of the assets of any division or line of business of Company or any of its Subsidiaries, or (iii) any other assets (whether tangible or intangible) of Company or any of its Subsidiaries (other than (a) inventory sold in the ordinary course of business, (b) Cash Equivalents, (c) sales, assignments, transfers or dispositions of accounts in the ordinary course of business for purposes of collection and (d) any such other assets to the extent that the aggregate value of such assets sold in any single transaction or related series of transactions is equal to $______or less).
Assignment Agreement means an Assignment and Assumption in substantially the form of Exhibit 11 annexed hereto.
Bankruptcy Code means Title 11 of the United States Code entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
Base Rate means, at any time, the higher of (i) the Prime Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change.
Base Rate Loans means Loans bearing interest at rates determined by reference to the Base Rate as provided in subsection 2.2(a).
Base Rate Margin means the margin over the Base Rate used in determining the rate of interest of Base Rate Loans pursuant to subsection 2.2(a).
Business Day means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of ______or is a day on which banking institutions located in such state are authorized or required by Applicable Law to close.
Capital Lease, as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.
Capital Stock means the capital stock of or other equity interests in a Person.
Cash means money, currency or a credit balance in a Deposit Account.
Cash Equivalents means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, the highest rating obtainable from either Standard & Poor's (S&P) or Moody's Investors Service, Inc. (Moody's); (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or bankers' acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least "adequately capitalized" (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (v) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000, and (c) has the highest rating obtainable from either S&P or Moody's.
Change in Control means ______shall cease to beneficially own and control at least ____% of the issued and outstanding shares of capital stock of Company entitled (without regard to the occurrence of any contingency) to vote for the election of members of the Governing Body of Company. As used herein, the term "beneficially own" or "beneficial ownership" shall have the meaning assigned to that term in the Exchange Act and the rules and regulations promulgated thereunder.
Change in Law means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any Applicable Law or (ii) any change in any Applicable Law or in the administration, interpretation or application thereof by any Government Authority.
Class, as applied to Lenders, means each of the following classes of Lenders: (i) Lenders having Revolving Loan Exposure and (ii) Lenders having Term Loan Exposure.
Closing Date means the date on which the initial Loans are made.
Closing Date Mortgage Policies has the meaning assigned to that term in subsection 4.1(l).
Closing Date Mortgaged Property has the meaning assigned to that term in subsection 4.1(l).
Closing Date Mortgages has the meaning assigned to that term in subsection 4.1(l).
Collateral means, collectively, all of the real, personal and mixed property in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.
Collateral Account has the meaning assigned to that term in the Security Agreement.
Collateral Documents means the Security Agreement, the Pledge Agreement, the Mortgages, the Control Agreements and all other instruments or documents delivered by any Loan Party pursuant to this Agreement or any of the other Loan Documents in order to grant to Administrative Agent, on behalf of Lenders, a Lien on any real, personal or mixed property of that Loan Party as security for the Obligations.
Commercial Letter of Credit means any letter of credit or similar instrument issued for the purpose of providing the primary payment mechanism in connection with the purchase of any materials, goods or services by Company or any of its Subsidiaries in the ordinary course of business of Company or such Subsidiary.
Commitments means the commitments of Lenders to make Loans as set forth in subsections 2.1(a) and 3.3.
Company has the meaning assigned to that term in the introduction to this Agreement.
Compliance Certificate means a certificate substantially in the form of Exhibit 8 annexed hereto.
Confidential Information Memorandum means the Confidential Information Memorandum dated______, ____ prepared by ______relating to the credit facilities evidenced by this Agreement.
Consolidated Capital Expenditures means, for any period, the sum of the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability and including that portion of Capital Leases which is capitalized on the consolidated balance sheet of Company and its Subsidiaries) by Company and its Subsidiaries during that period that, in conformity with GAAP, are included in "additions to property, plant or equipment" or comparable items reflected in the consolidated statement of cash flows of Company and its Subsidiaries. For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Consolidated Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may be.
Consolidated Cash Interest Expense means, for any period, Consolidated Interest Expense for such period excluding, however, any interest expense not payable in Cash (including amortization of discount and amortization of debt issuance costs).
Consolidated Current Assets means, as at any date of determination, the total assets of Company and its Subsidiaries on a consolidated basis which may properly be classified as current assets in conformity with GAAP.
Consolidated Current Liabilities means, as at any date of determination, the total liabilities of Company and its Subsidiaries on a consolidated basis which may properly be classified as current liabilities in conformity with GAAP.
Consolidated EBITDA means, for any period, the sum, without duplication, of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv) total depreciation expense, and (iv) total amortization expense, and (vi) other non-cash items, but only, in the case of clauses (ii) to (iv), to the extent deducted in the calculation of Consolidated Net Income, all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries in conformity with GAAP.
Consolidated Excess Cash Flow means, for any period, an amount (if positive) equal to (i) the Consolidated EBITDA for such period minus (ii) the sum, without duplication, of the amounts for such period of (a) voluntary and scheduled repayments of Consolidated Total Debt (excluding repayments of Revolving Loans except to the extent the Revolving Loan Commitment Amount is permanently reduced in connection with such repayments), (b) Consolidated Capital Expenditures (net of any proceeds of any related financings with respect to such expenditures), (c) Consolidated Cash Interest Expense, and (d) current taxes based on income of Company and its Subsidiaries and paid in cash with respect to such period.
Consolidated Fixed Charges means, for any period, the sum (without duplication) of the amounts for such period of (i) Consolidated Cash Interest Expense, (ii) scheduled principal payments in respect of Consolidated Total Debt, (iii) provisions for taxes based on income, (iv) Restricted Junior Payments and (v) the aggregate amount of all rents paid or payable during that period under all Capital Leases and Operating Leases to which Company or any of its Subsidiaries is a party as lessee, all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries in conformity with GAAP.