EXHIBIT 10.1
Published on November 16, 2000
Exhibit 10.1
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[EXECUTION COPY]
$70,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
TTM TECHNOLOGIES, INC.,
as Borrower,
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTIES HERETO,
as Guarantors,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
and
FLEET NATIONAL BANK,
as Syndication Agent
and
SUNTRUST BANK,
as Documentation Agent
and
FIRST UNION CAPITAL MARKETS CORP.,
as Lead Arranger
Dated as of September 29, 2000
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TABLE OF CONTENTS
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SCHEDULES
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THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 29,
2000, among TTM TECHNOLOGIES, INC. (formerly known as Pacific Circuits, Inc.), a
Washington corporation (the "BORROWER"), those Domestic Subsidiaries of the
Borrower identified as a "Guarantor" on the signature pages hereto and such
other Domestic Subsidiaries of the Borrower as may from time to time become a
party hereto (the "GUARANTORS"), the several banks and other financial
institutions as may from time to time become parties to this Agreement
(collectively, the "LENDERS"; and individually, a "LENDER"), and FIRST UNION
NATIONAL BANK, a national banking association, as administrative agent for the
Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower (formerly known as Pacific Circuits, Inc.) is
party to that certain Credit Agreement, dated as of July 13, 1999, as amended
from time to time thereafter (as amended, the "EXISTING CREDIT AGREEMENT"),
among the Borrower, Circuit Holdings, LLC, a Delaware limited liability company
and the Domestic Subsidiaries of the Borrower, as guarantors, the several banks
and other financial institutions party thereto (the "EXISTING LENDERS") and
First Union National Bank, as agent for the lenders thereunder; pursuant to
which the Existing Lenders have agreed to make loans and other financial
accommodations to the Borrower in the amount of up to $127,500,000 pursuant to
the terms and conditions contained therein.
WHEREAS, the Borrower intends to offer for sale certain of its capital
stock in connection with the Initial Public Offering (as defined herein) and
repay certain existing indebtedness of the Borrower;
WHEREAS, in connection with the Initial Public Offering and the
repayment of certain existing indebtedness by the Borrower, the Borrower has
requested that the parties to the Existing Credit Agreement increase the
Revolving Commitment from $15,000,000 to $25,000,000 and restructure and reduce
the Tranche A Term Loans in the initial aggregate principal amount of
$37,000,000 and the Tranche B Term Loans in the initial aggregate principal
amount of $75,000,000 to a single Term Loan in the initial aggregate principal
amount of $45,000,000 as more particularly described herein;
WHEREAS, the Lenders have agreed to amend and restate the Existing
Credit Agreement and restructure the Existing Credit Agreement to provide for,
among other things, $70,000,000 in loans and other financial accommodations to
the Borrower on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"ACCOUNT DESIGNATION LETTER" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as SCHEDULE
1.1(A).
"ADDITIONAL CREDIT PARTY" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"AFFILIATE" shall mean as to any Person, any other Person (excluding
any Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" a Person if such
Person possesses, directly or indirectly, power either (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT" shall mean this Amended and Restated Credit Agreement, as
amended, modified or supplemented from time to time in accordance with its
terms.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"PRIME RATE" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "FEDERAL
FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds
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Effective Rate, for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"ALTERNATE BASE RATE LOANS" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"APPLICABLE PERCENTAGE" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans and Term Loans which are
Alternate Base Rate Loans shall be the percentage set forth under the column
"Alternate Base Rate Margin for Revolving Loans and Term Loans", (ii) Revolving
Loans and Term Loans which are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Revolving Loans, Term Loans and
Letter of Credit Fee", (iii) the Letter of Credit Fee shall be the percentage
set forth under the column "LIBOR Rate Margin for Revolving Loans, Term Loans
and Letter of Credit Fee", and (iv) the Commitment Fee shall be the percentage
set forth under the column "Commitment Fee":
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The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on which
the Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an "INTEREST DETERMINATION DATE"). Such Applicable Percentage shall
be effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Percentages shall be based on a
minimum of Level III until the first Interest Determination Date occurring after
September 30, 2000. After the Closing Date, if the Borrower shall fail to
provide the quarterly financial information and certifications in accordance
with the provisions of Sections 5.1(b) and 5.2(b), the Applicable Percentage
from such Interest Determination Date shall, on the date five (5) Business Days
after the date by which the Borrower was so required to provide such financial
information and certifications to the Administrative Agent and the Lenders, be
based on Level I until such time as such information and certifications are
provided, whereupon the Level shall be determined by the then current Leverage
Ratio.
"ASSET DISPOSITION" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) Specified Sales, (ii) the sale, lease or transfer of
assets permitted by Section 6.5(a)(iii) or (iv) hereof, or (iii) any Equity
Issuance.
"BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"BORROWER" shall have the meaning set forth in the first paragraph of
this Agreement.
"BORROWING DATE" shall mean, in respect of any Loan, the date such Loan
is made.
"BUSINESS" shall have the meaning set forth in Section 3.10.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; PROVIDED, HOWEVER, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"CAPITAL LEASE" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
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"CAPITAL STOCK" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("GOVERNMENT OBLIGATIONS"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"APPROVED BANK"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within one year of the date of acquisition, (iv)
repurchase agreements with a bank or trust company (including a Lender) or a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, and (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) the failure of the Sponsors or one or more of their Affiliates to
maintain beneficial ownership, directly or indirectly, of Voting Stock of the
Borrower representing at least 20% of the combined voting power of all Voting
Stock of the Borrower, (b) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership, directly or indirectly, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of
control over, Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 33% or more of the combined voting power of all
Voting Stock of the Borrower or (c) the occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Borrower by Persons
who were neither (i) nominated by the board of directors of the Borrower nor
(ii) appointed by directors so nominated. As used herein, "beneficial ownership"
shall have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934.
"CLOSING DATE" shall mean the date of this Agreement.
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"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.
"COMMITMENT" shall mean the Revolving Commitment, the LOC Commitment,
the Swingline Commitment, and the Term Loan Commitment, individually or
collectively, as appropriate.
"COMMITMENT FEE" shall have the meaning set forth in Section 2.6(a).
"COMMITMENT PERCENTAGE" shall mean the Revolving Commitment Percentage,
the LOC Commitment Percentage, and/or the Term Loan Commitment Percentage, as
appropriate.
"COMMITMENT PERIOD" shall mean the period from and including the
Funding Date to but not including the Revolving Commitment Termination Date.
"COMMITMENT TRANSFER SUPPLEMENT" shall mean a Commitment Transfer
Supplement, substantially in the form of SCHEDULE 9.6(c).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all capital
expenditures of the Borrower and its Subsidiaries on a consolidated basis for
such period, as determined in accordance with GAAP. The term "Consolidated
Capital Expenditures" shall not include (i) capital expenditures in respect of
the reinvestment of proceeds derived from (A) Recovery Events or (B) a sale of
assets pursuant to Section 6.5(a)(ii) received by the Borrower and its
Subsidiaries to the extent that such reinvestment is permitted under the Credit
Documents or (ii) up to $3,300,000 of capital expenditures in respect of the
purchase or conversion of the operating leases set forth on SCHEDULE 6.17 as
permitted by Section 6.1(c).
"CONSOLIDATED EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes, (C) losses (or MINUS gains) on the sale
or disposition of assets outside the ordinary course of business, (D)
depreciation, amortization expense and other non-cash charges, all as determined
in accordance with GAAP, (E) amounts paid in respect of management fees to the
extent permitted hereunder, (F) other non-recurring add-backs as set forth on
SCHEDULE 1.1(d); provided that, notwithstanding the foregoing, in the event such
period includes the first fiscal quarter of 2000 and/or the second fiscal
quarter of 2000, Consolidated EBITDA for such fiscal quarters shall be the
amounts set forth on SCHEDULE
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1.1(d), and (G) adjustments to EBITDA for such period approved by the Agent in
its sole discretion.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, all cash
interest expense of the Borrower and its Subsidiaries (including, without
limitation, the interest component under Capital Leases), as determined in
accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED NET WORTH" means, as of any date with respect to the
Borrower and its Subsidiaries on a consolidated basis, Consolidated Total Assets
MINUS Consolidated Total Liabilities, as determined in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, as of any date with respect to the
Borrower and its Subsidiaries on a consolidated basis, total assets, as
determined in accordance with GAAP.
"CONSOLIDATED TOTAL LIABILITIES" means, as of any date with respect to
the Borrower and its Subsidiaries on a consolidated basis, total liabilities, as
determined in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" shall mean, at any time, the excess of
(i) current assets (excluding cash) of the Borrower and its Subsidiaries on a
consolidated basis at such time less (ii) current liabilities (including the
Credit Party Obligations, but excluding the sum of (a) the current portion of
long term Indebtedness, PLUS (b) accrued and unpaid interest on Indebtedness) of
the Borrower and its Subsidiaries on a consolidated basis at such time, all as
determined in accordance with GAAP.
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CREDIT DOCUMENTS" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, LOC Documents and the Security
Documents.
"CREDIT PARTY" shall mean any of the Borrower or the Guarantors.
"CREDIT PARTY OBLIGATIONS" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this Agreement,
the Notes or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a filing of a petition of
bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and obligations, whenever arising, owing from the
Borrower or any of its Subsidiaries to any Lender, or any Affiliate of a Lender,
arising under any Hedging Agreement.
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"DEBT ISSUANCE" shall mean the issuance of any Indebtedness for
borrowed money by any Credit Party or any of its Subsidiaries (excluding, for
purposes hereof, any Equity Issuance or any Indebtedness of the Borrower and its
Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).
"DEFAULT" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.
"DEFAULTING LENDER" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on SCHEDULE
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"ENVIRONMENTAL LAWS" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"EQUITY ISSUANCE" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term "Equity Issuance" shall
not include (i) any Asset Disposition, (ii) any Debt Issuance or (iii) the
Initial Public Offering.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EURODOLLAR RESERVE PERCENTAGE" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the
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maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) in respect of Eurocurrency liabilities, as
defined in Regulation D of such Board as in effect from time to time, or any
similar category of liabilities for a member bank of the Federal Reserve System
in New York City.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
7.1; PROVIDED, HOWEVER, that any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.
"EXTENSION OF CREDIT" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"FEE LETTER" shall mean the letter agreement dated August 29, 2000
addressed to the Borrower from the Administrative Agent, as amended, modified or
otherwise supplemented.
"FIRST UNION" shall mean First Union National Bank, a national banking
association.
"FIXED CHARGE COVERAGE RATIO" means, as of the end of each fiscal
quarter of the Borrower, for the Borrower and its Subsidiaries on a consolidated
basis for the four consecutive quarters ending on such date, the ratio of (i)
Consolidated EBITDA for the applicable period to (ii) the sum of Consolidated
Interest Expense for the applicable period PLUS Scheduled Funded Debt Payments
for the applicable period PLUS cash taxes paid during the applicable period PLUS
Consolidated Capital Expenditures for the applicable period. For purposes
hereof, the Consolidated Interest Expense and the Scheduled Funded Debt Payment
components of the Fixed Charge Coverage Ratio for the first three complete
fiscal quarters to occur after the Closing Date shall be determined by
annualizing the Consolidated Interest Expense and the Scheduled Funded Debt
Payment components such that for the first complete fiscal quarter to occur
after the Closing Date such components would be multiplied by four (4), the
first two complete fiscal quarters would be multiplied by two (2) and the first
three fiscal quarters would be multiplied by one and one-third (1 ).
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"FUNDED DEBT" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis, without duplication, (a) all Indebtedness
of such Person other than Indebtedness of the types referred to in clause (e),
(f), (i) and (l) of the definition of "Indebtedness" set forth in this Section
1.1, (b) all Funded Debt of others of the type referred to in clause (a) above
secured by (or for which the holder of such Funded Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Funded Debt of the type referred to
in clause (a) above of another Person, and (d) Funded Debt of the type referred
to in clause (a) above of any
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partnership or unincorporated joint venture in which such Person is legally
obligated or has a reasonable expectation of being liable with respect thereto.
"FUNDING DATE" shall mean the date upon which the conditions in Section
4.2 shall have been satisfied and the initial Extensions of Credit shall have
been made by the Lenders.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, SUBJECT, HOWEVER, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"GOVERNMENT ACTS" shall have the meaning set forth in Section 2.20.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTY OBLIGATIONS" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
"GUARANTOR" shall mean the Domestic Subsidiaries identified as a
"Guarantor" on the signature pages hereto and the Additional Credit Parties
which execute a Joinder Agreement, together with their successors and permitted
assigns.
"GUARANTY" shall mean the guaranty of the Guarantors set forth in
Article X.
"HEDGING AGREEMENTS" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
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"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements, (j) the maximum amount of all standby letters
of credit issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer.
"INITIAL PUBLIC OFFERING" shall mean the initial public offering of
common Capital Stock of the Borrower.
"INSOLVENCY" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"INSOLVENT" shall mean being in a condition of Insolvency.
"INTEREST DETERMINATION DATE" shall have the meaning assigned thereto
in the definition of "Applicable Percentage".
"INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last day of each March, June, September and December
and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Rate Loan having an Interest Period longer than three
months, each day which is three months after the first day of such Interest
Period and the last day of such Interest Period.
11
"INTEREST PERIOD" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected by
the Borrower in the notice of borrowing or notice of conversion given
with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
PROVIDED that the foregoing provisions are subject to
the following:
(A) if any Interest Period pertaining to a
LIBOR Rate Loan would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(B) any Interest Period pertaining to a
LIBOR Rate Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
relevant calendar month;
(C) if the Borrower shall fail to give
notice as provided above, the Borrower shall be deemed to have
selected an Alternate Base Rate Loan to replace the affected
LIBOR Rate Loan;
(D) any Interest Period in respect of any
Loan that would otherwise extend beyond the applicable
Maturity Date and, further with regard to the Term Loans, no
Interest Period shall extend beyond any principal amortization
payment date unless the portion of such Term Loan consisting
of Alternate Base Rate Loans together with the portion of such
Term Loan consisting of LIBOR Rate Loans with Interest Periods
expiring prior to or concurrently with the date such principal
amortization payment date is due, is at least equal to the
amount of such principal amortization payment due on such
date; and
(E) no more than six (6) LIBOR Rate Loans
may be in effect at any time. For purposes hereof, LIBOR Rate
Loans with different Interest Periods shall be considered as
separate LIBOR Rate Loans, even if they shall begin on the
same date and have the same duration, although borrowings,
extensions and conversions may, in accordance with the
provisions hereof, be combined at the
12
end of existing Interest Periods to constitute a new LIBOR
Rate Loan with a single Interest Period.
"ISSUING LENDER" shall mean First Union.
"ISSUING LENDER FEES" shall have the meaning set forth in
Section 2.6(c).
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of SCHEDULE 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"LENDER" shall have the meaning set forth in the first paragraph of
this Agreement.
"LETTERS OF CREDIT" shall mean any letter of credit issued by the
Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be
amended, modified, extended, renewed or replaced from time to time.
"LETTER OF CREDIT FEE" shall have the meaning set forth in
Section 2.6(b).
"LEVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter, the ratio of (a) Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis on the last day of such period to
(b) Consolidated EBITDA for such twelve month period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and
13
the Borrower as the office of such Lender at which the LIBOR Rate Loans of such
Lender are to be made.
"LIBOR RATE" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR RATE LOAN" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"LOAN" shall mean a Revolving Loan, a Swingline Loan, and/or the Term
Loan as appropriate.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in SCHEDULE 2.1(a), as such amount
may be reduced from time to time in accordance with the provisions hereof.
"LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on SCHEDULE 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and participate in Letters
of Credit as referenced in Section 2.4 and, individually, the amount of each
Lender's LOC Commitment as specified in SCHEDULE 2.1(a).
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC OBLIGATIONS" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters
14
of Credit PLUS (ii) the aggregate amount of all drawings under Letters of Credit
honored by the Issuing Lender but not theretofore reimbursed.
"MANDATORY BORROWING" shall have the meaning set forth in
Section 2.4(e) or Section 2.5(b)(ii), as the context may require.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the business, operations, property, condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower or any Guarantor to perform its obligations, when such obligations are
required to be performed, under this Agreement, any of the Notes or any other
Credit Document to which it is a party or (c) the validity or enforceability of
this Agreement, any of the Notes or any of the other Credit Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIAL CONTRACT" shall mean any contract or other arrangement,
whether written or oral, to which the Borrower or any of its Subsidiaries is a
party as to which the breach, nonperformance, cancellation or failure to renew
by any party thereto could reasonably be expected to have a Material Adverse
Effect.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, friable
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" shall mean (i) with respect to the Term Loan, the last
scheduled quarterly payment date for the Term Loan set forth in Section 2.2(b)
and (ii) with respect to the Revolving Loans, the Revolving Commitment
Termination Date.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"MORTGAGE INSTRUMENTS" shall have the meaning set forth in
Section 4.2(c)(i).
"MORTGAGE POLICIES" shall have the meaning set forth in
Section 4.2(c)(iii).
"MORTGAGED PROPERTIES" shall have the meaning set forth in
Section 4.2(c)(i).
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean the aggregate cash proceeds received by
any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs (including, without
limitation, reasonable and customary legal, accounting, brokerage commissions,
finder's fees and investment banking fees, and sales commissions and other
similar fees and commissions), (b) taxes paid or payable as a result thereof and
(c) the amount of any Indebtedness secured by a Lien in such asset that is
required to be repaid upon such disposition; it being understood that "Net Cash
Proceeds" shall include, without limitation,
15
any cash received upon the sale or other disposition of any non-cash
consideration received by the Borrower or any Subsidiary in any Asset
Disposition, Equity Issuance or Debt Issuance.
"NOTE" or "NOTES" shall mean the Revolving Notes, the Swingline Note,
and/or the Term Notes, collectively, separately or individually, as appropriate.
"NOTICE OF BORROWING" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.5(b)(i), as appropriate.
"NOTICE OF CONVERSION" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.11.
"OBLIGATIONS" shall mean, collectively, Loans and LOC Obligations.
"PARTICIPANT" shall have the meaning set forth in Section 9.6(b).
"PARTICIPATION INTEREST" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.4.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED INVESTMENTS" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its
Subsidiaries or any receivables and advances to suppliers, in each case
if created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees
and Affiliates in an aggregate amount not to exceed $1,000,000 at any
time outstanding;
(v) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(vi) investments, acquisitions or transactions permitted
under Section 6.5(b);
(vii) additional loan advances and/or investments of a
nature not contemplated by the foregoing clauses hereof, PROVIDED that
such loans, advances and/or investments made pursuant to this clause
(vii) shall not exceed an aggregate amount of $100,000;
16
(viii) investments existing on the date hereof and set forth
on SCHEDULE 1.1(c);
(ix) investments by the Borrower in Hedge Agreements
permitted under Section 6.1(e); and
(x) investments consisting of intercompany debt permitted
under Section 6.1(d).
As used herein, "INVESTMENT" means all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
"PERMITTED LIENS" shall mean:
(i) Liens created by or otherwise existing, under or in
connection with this Agreement or the other Credit Documents in favor
of the Lenders;
(ii) Liens in favor of a Lender hereunder in connection
with Hedging Agreements, but only (A) to the extent such Liens secure
obligations under Hedging Agreements with any Lender, or any Affiliate
of a Lender, (B) to the extent such Liens are on the same collateral as
to which the Administrative Agent on behalf of the Lenders also has a
Lien and (C) if such provider and the Lenders shall share PARI PASSU in
the collateral subject to such Liens;
(iii) purchase money Liens securing purchase money
indebtedness (and refinancings thereof) to the extent permitted under
Section 6.1(c);
(iv) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of grace (not
to exceed 60 days), if any, related thereto has not expired or which
are being contested in good faith by appropriate proceedings, PROVIDED
that adequate reserves with respect thereto are maintained on the books
of the Borrower or its Subsidiaries, as the case may be, in conformity
with GAAP (or, in the case of Subsidiaries with significant operations
outside of the United States of America, generally accepted accounting
principles in effect from time to time in their respective
jurisdictions of incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(vi) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
17
(vii) 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 like nature incurred in the ordinary course of
business;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements) , in whole or in part, of any
Lien referred to in the foregoing clauses; PROVIDED that such
extension, renewal or replacement Lien shall be limited to all or a
part of the property which secured the Lien so extended, renewed or
replaced (plus improvements on such property);
(ix) Liens existing on the Closing Date and set forth on
SCHEDULE 1.1(b); provided that (a) no such Lien shall at any time be
extended to cover property or assets other than the property or assets
subject thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced;
(x) Liens arising in connection with Capitalized Leases
to the extent permitted under SECTION 6.1(c);
(xi) Liens on property of a Person existing at the time
such Person is acquired, merged into or consolidated with the Borrower
or any Subsidiary of the Borrower so long as such Liens were not
created in contemplation of such acquisition, merger or consolidation;
(xii) Liens set forth in Exhibit B to the real property
title reports set forth on SCHEDULE 1.1(b);
(xiii) any attachment or judgment Lien the existence of
which, individually or in the aggregate, does not result in an Event of
Default under Section 7.1(f); and
(xiv) other Liens securing debt outstanding in an aggregate
principal amount not to exceed $500,000.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENT" shall mean the Amended and Restated Pledge Agreement
dated as of the Closing Date to be executed in favor of the Administrative Agent
by the Borrower and each of the other Credit Parties, as amended, modified,
restated or supplemented from time to time.
18
"PRIME RATE" shall have the meaning set forth in the definition of
Alternate Base Rate.
"PROPERTIES" shall have the meaning set forth in Section 3.10(a).
"PURCHASING LENDERS" shall have the meaning set forth in
Section 9.6(c).
"RECOVERY EVENT" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"REGISTER" shall have the meaning set forth in Section 9.6(d).
"REORGANIZATION" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.
"REQUIRED LENDERS" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Administrative
Agent) and holding in the aggregate at least 51% of the Revolving Commitments
(and Participation Interests therein) and the outstanding Term Loans (and
Participation Interests therein) or if the Commitments have been terminated, the
outstanding Revolving Loans and Term Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any Letters of
Credit and of the Swingline Lender in any Swingline Loans).
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER" shall mean, as to (a) the Borrower, the President
and the Chief Executive Officer or the Chief Financial Officer or (b) any other
Credit Party, any duly authorized officer thereof.
"RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or
19
hereafter outstanding, or (d) any payment or prepayment of principal of,
premium, if any, or interest on, redemption, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, any Subordinated Debt.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount as
specified in SCHEDULE 2.1(a), as such amount may be reduced from time to time in
accordance with the provisions hereof.
"REVOLVING COMMITMENT PERCENTAGE" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"REVOLVING COMMITMENT TERMINATION DATE" shall mean September 29, 2005.
"REVOLVING COMMITTED AMOUNT" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as such
amount may be reduced from time to time in accordance with the provisions
hereof, and, individually, the amount of each Lender's Revolving Commitment as
specified on SCHEDULE 2.1(a).
"REVOLVING LOANS" shall have the meaning set forth in Section 2.1.
"REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes
of the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"SCHEDULED FUNDED DEBT PAYMENTS" shall mean, as of any date of
determination for the Borrower and its Subsidiaries, the sum of all scheduled
payments of principal on Funded Debt for the applied period ending on the date
of determination (including the principal component of payments due on Capital
Leases during the applicable period ending on the date of determination).
"SECURITY AGREEMENT" shall mean the Amended and Restated Security
Agreement dated as of the Closing Date given by the Borrower and the other
Credit Parties to the Administrative Agent, as amended, modified or supplemented
from time to time in accordance with its terms.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and
delivered in connection with the attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is not a
Multiemployer Plan.
20
"SPECIFIED SALES" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business and
(b) the sale, transfer or other disposition of Permitted Investments described
in clause (i) of the definition thereof.
"SPONSORS" shall mean a collective reference to each of Brockway Moran
& Partners Fund L.P. and Thayer Equity Investors IV, L.P.
"SUBORDINATED DEBT" shall mean any Indebtedness incurred by any Credit
Party which by its terms is specifically subordinated in right of payment to the
prior payment of the Credit Party Obligations.
"SUBORDINATED NOTES" shall mean collectively, (a) that certain
subordinated note dated December 15, 1998 in the amount of $51,043.65 from the
Borrower to The Colleen Beckdolt Trust No. 2, (b) that certain Subordinated Note
dated December 15, 1998 in the amount of $51,043.65 from the Borrower to The Ian
Lewis Coley Trust No. 2, (c) that certain subordinated note dated December 15,
1998 in the amount of $3,547,912.70 from the Borrower to Lewis O. Coley, III,
(d) that certain subordinated note dated December 15, 1998 in the amount of
$350,000.00 from the Borrower to Simon Dadoun and (e) those certain senior
subordinated notes dated as of July 13, 1999 in the aggregate amount of
$12,500,000, from the Borrower to TCW/Crescent Mezzanine Partners II, L.P. and
its Affiliates.
"SUBSIDIARY" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.5(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"SWINGLINE COMMITTED AMOUNT" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.5(a).
"SWINGLINE LENDER" shall mean First Union, in its capacity as such.
"SWINGLINE LOAN" or "SWINGLINE LOANS" shall have the meaning set forth
in Section 2.5(a).
21
"SWINGLINE NOTE" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.5(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"TAXES" shall have the meaning set forth in Section 2.19.
"TERM LOAN" shall have the meaning set forth in Section 2.2(a).
"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan in a principal
amount equal to such Lender's Term Loan Commitment Percentage of the Term Loan
Committed Amount (and for purposes of making determinations of Required Lenders
hereunder after the Closing Date, the principal amount outstanding on the Term
Loan).
"TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on SCHEDULE 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6.
"TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth in
Section 2.2(a).
"TERM NOTE" or "TERM NOTES" shall mean the promissory notes of the
Borrower in favor of each of the Lenders evidencing the portion of the Term Loan
provided pursuant to Section 2.2(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"TRANCHE" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"TRANSFER EFFECTIVE DATE" shall have the meaning set forth in each
Commitment Transfer Supplement.
"2.19 CERTIFICATE" shall have the meaning set forth in Section 2.19.
"TYPE" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan or Swingline Loan, as the case may be.
"VOTING STOCK" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
22
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings when used
in the Notes or other Credit Documents or any certificate or other
document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
PROVIDED that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("REVOLVING LOANS") to the
Borrower from time to time for the purposes hereinafter set
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forth; PROVIDED, HOWEVER, that (i) with regard to each Lender
individually, the sum of such Lender's share of outstanding Revolving
Loans PLUS such Lender's Revolving Commitment Percentage of Swingline
Loans PLUS such Lender's LOC Commitment Percentage of LOC Obligations
shall not exceed such Lender's Revolving Commitment Percentage of the
aggregate Revolving Committed Amount, and (ii) with regard to the
Lenders collectively, the sum of the aggregate amount of outstanding
Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall not
exceed the Revolving Committed Amount. For purposes hereof, the
aggregate amount available hereunder shall be TWENTY FIVE MILLION
DOLLARS ($25,000,000) (as such aggregate maximum amount may be reduced
from time to time as provided in Section 2.7, the "REVOLVING COMMITTED
AMOUNT"). Revolving Loans may consist of Alternate Base Rate Loans or
LIBOR Rate Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the
provisions hereof.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephone
notice promptly confirmed in writing which confirmation may be
by fax) to the Administrative Agent not later than 1:00 P.M.
(Charlotte, North Carolina time) on the Business Day prior to
the date of requested borrowing in the case of Alternate Base
Rate Loans, and on the third Business Day prior to the date of
the requested borrowing in the case of LIBOR Rate Loans. Each
such request for borrowing shall be irrevocable and shall
specify (A) that a Revolving Loan is requested, (B) the date
of the requested borrowing (which shall be a Business Day),
(C) the aggregate principal amount to be borrowed, (D) whether
the borrowing shall be comprised of Alternate Base Rate Loans,
LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
Loans are requested, the Interest Period(s) therefor. A form
of Notice of Borrowing (a "NOTICE OF BORROWING") is attached
as SCHEDULE 2.1(b)(i). If the Borrower shall fail to specify
in any such Notice of Borrowing (I) an applicable Interest
Period in the case of a LIBOR Rate Loan, then such notice
shall be deemed to be a request for an Interest Period of one
month, or (II) the type of Revolving Loan requested, then such
notice shall be deemed to be a request for an Alternate Base
Rate Loan hereunder. The Administrative Agent shall give
notice to each Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Lender's share
thereof.
(ii) MINIMUM AMOUNTS. Each Revolving Loan borrowing
shall be in a minimum aggregate amount of (A) with respect to
LIBOR Rate Loans, $1,000,000 and integral multiples of
$500,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less) and (B) with respect to
Alternate Base Rate Loans, $500,000 and integral multiples of
$100,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).
(iii) ADVANCES. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing
available to the Administrative
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Agent for the account of the Borrower at the office of the
Administrative Agent specified in SCHEDULE 9.2, or at such
other office as the Administrative Agent may designate in
writing, by 3:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in
Dollars and in funds immediately available to the
Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) REPAYMENT. The principal amount of all Revolving
Loans shall be due and payable in full on the Revolving Commitment
Termination Date.
(d) INTEREST. Subject to the provisions of Section 2.10,
Revolving Loans shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate
Loans, each such Alternate Base Rate Loan shall bear interest
at a per annum rate equal to the sum of the Alternate Base
Rate PLUS the Applicable Percentage; and
(ii) LIBOR RATE LOANS. During such periods as
Revolving Loans shall be comprised of LIBOR Rate Loans, each
such LIBOR Rate Loan shall bear interest at a per annum rate
equal to the sum of the LIBOR Rate PLUS the Applicable
Percentage.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) REVOLVING NOTES. Each Lender's Revolving Commitment
Percentage of the Revolving Loans shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in substantially the
form of SCHEDULE 2.1(e).
SECTION 2.2 TERM LOAN FACILITY.
(a) TERM LOAN. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower on the Funding Date such Lender's Term Loan Commitment
Percentage of a term loan in Dollars (the "TERM LOAN") in the
aggregate principal amount of FORTY FIVE MILLION DOLLARS
($45,000,000) (the "TERM LOAN COMMITTED AMOUNT") for the purposes
hereinafter set forth. The Term Loan may consist of Alternate Base
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrower may request. The Borrower shall request the initial Term
Loan borrowing by written notice (or telephone notice promptly
confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 1:00 P.M. (Charlotte, North
Carolina time) on the Business Day prior to the date of requested
borrowing. LIBOR Rate Loans shall be made by each Lender at its
LIBOR Lending Office and Alternate
25
Base Rate Loans at its Domestic Lending Office. Amounts repaid on the
Term Loan may not be reborrowed.
(b) REPAYMENT OF TERM LOAN. The principal amount of the
Term Loan shall be repaid in twenty (20) consecutive fiscal quarterly
installments as follows, unless accelerated sooner pursuant to
Section 7.2:
26
(c) INTEREST ON THE TERM LOAN. Subject to the provisions
of Section 2.10, the Term Loan shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such
periods as the Term Loan shall be comprised of Alternate Base
Rate Loans, each such Alternate Base Rate Loan shall bear
interest at a per annum rate equal to the sum of the Alternate
Base Rate PLUS the Applicable Percentage; and
(ii) LIBOR RATE LOANS. During such periods
as the Term Loan shall be comprised of LIBOR Rate Loans, each
such LIBOR Rate Loan shall bear interest at a per annum rate
equal to the sum of the LIBOR Rate PLUS the Applicable
Percentage.
Interest on the Term Loan shall be payable in arrears
on each Interest Payment Date.
(d) TERM NOTES. Each Lender's Term Loan Commitment
Percentage of the Term Loan outstanding as of the Closing Date shall be
evidenced by a duly executed promissory note of the Borrower to such
Lender in substantially the form of SCHEDULE 2.2(d).
SECTION 2.3 [INTENTIONALLY OMITTED].
SECTION 2.4 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, during the Commitment Period
the Issuing Lender shall issue, and the Lenders shall participate in,
Letters of Credit for the account of the Borrower from time to time
upon request in a form acceptable to the Issuing Lender; PROVIDED,
HOWEVER, that (i) the aggregate amount of LOC Obligations shall not at
any time exceed FIVE MILLION DOLLARS ($5,000,000) (the "LOC COMMITTED
AMOUNT"), (ii) the sum of the aggregate amount of Revolving Loans PLUS
Swingline Loans PLUS LOC Obligations shall not at any time exceed the
Revolving Committed Amount, (iii) all Letters of Credit shall be
denominated in U.S. Dollars and (iv) Letters of Credit shall be issued
for the purpose of supporting tax-advantaged variable rate demand note
financing and for other lawful corporate purposes and may be issued as
standby letters of credit, including in connection with workers'
compensation and other insurance programs, and trade letters of credit.
Except as otherwise expressly agreed upon by all the Lenders, no Letter
of Credit shall have an original expiry date more than twelve (12)
months from the date of issuance; PROVIDED, HOWEVER, so long as no
Default or Event of Default has occurred and is continuing and subject
to the other terms and conditions to the issuance of Letters of Credit
hereunder, the expiry dates of Letters of Credit may be extended
annually or periodically from time to time on the request of the
Borrower or by operation of the terms of the applicable Letter of
Credit to a date not more than twelve (12) months from the date of
extension; PROVIDED, FURTHER, that no Letter of Credit, as originally
issued or as extended, shall have an expiry date extending beyond the
Revolving Commitment Termination Date. Each Letter of Credit shall
comply with the related LOC Documents. The issuance and expiry date of
each Letter of Credit shall be a Business Day. Any
27
Letters of Credit issued hereunder shall be in a minimum original face
amount of $100,000. First Union shall be the Issuing Lender on all
Letters of Credit issued after the Closing Date.
(b) NOTICE AND REPORTS. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least five
(5) Business Days prior to the requested date of issuance. The Issuing
Lender will promptly upon request provide to the Administrative Agent
for dissemination to the Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of
any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as
any payments or expirations which may have occurred. The Issuing Lender
will further provide to the Administrative Agent promptly upon request
copies of the Letters of Credit. The Issuing Lender will provide to the
Administrative Agent promptly upon request a summary report of the
nature and extent of LOC Obligations then outstanding.
(c) PARTICIPATIONS. Each Lender upon issuance of a Letter
of Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its LOC Commitment Percentage of the
obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its LOC Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) hereof. The obligation of each Lender to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided.
(d) REIMBURSEMENT. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower
and the Administrative Agent. The Borrower shall reimburse the Issuing
Lender on the day of drawing under any Letter of Credit (either with
the proceeds of a Revolving Loan or a Swingline Loan obtained hereunder
or otherwise) in same day funds as provided herein or in the LOC
Documents. If the Borrower shall fail to reimburse the Issuing Lender
as provided herein, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Alternate Base Rate plus two
percent (2%). Unless the Borrower shall immediately notify the Issuing
Lender and the Administrative Agent of its intent to otherwise
reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Swingline Loan, or if and to the extent Swingline Loans
shall be unavailable, a Revolving
28
Loan in the amount of the drawing as provided in subsection (e) hereof,
the proceeds of which will be used to satisfy the reimbursement
obligations. The Borrower's reimbursement obligations hereunder shall
be absolute and unconditional under all circumstances irrespective of
any rights of set-off, counterclaim or defense to payment the Borrower
may claim or have against the Issuing Lender, the Administrative Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any
other Person, including without limitation any defense based on any
failure of the Borrower to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The
Issuing Lender will promptly notify the other Lenders of the amount of
any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars
and in immediately available funds, the amount of such Lender's LOC
Commitment Percentage of such unreimbursed drawing. Such payment shall
be made on the day such notice is received by such Lender from the
Issuing Lender if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time), otherwise such payment shall be made
at or before 12:00 Noon (Charlotte, North Carolina time) on the
Business Day next succeeding the day such notice is received. If such
Lender does not pay such amount to the Issuing Lender in full upon such
request, such Lender shall, on demand, pay to the Administrative Agent
for the account of the Issuing Lender interest on the unpaid amount
during the period from the date of such drawing until such Lender pays
such amount to the Issuing Lender in full at a rate per annum equal to,
if paid within two (2) Business Days of the date of drawing, the
Federal Funds Effective Rate and thereafter at a rate equal to the
Alternate Base Rate. Each Lender's obligation to make such payment to
the Issuing Lender, and the right of the Issuing Lender to receive the
same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the Credit Party Obligations
hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the
Borrower shall have requested, or been deemed to have requested (i) a
Swingline Loan borrowing to reimburse a drawing under a Letter of
Credit, the Swingline Lender shall make the Swingline Loan advance
pursuant to the terms of the request or deemed request in accordance
with the provisions for Swingline Loan advances hereunder or (ii) a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Lenders that a Revolving
Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan
borrowing comprised entirely of Alternate Base Rate Loans (each such
borrowing, a "MANDATORY BORROWING") shall be immediately made (without
giving effect to any termination of the Commitments pursuant to Section
7.2) PRO RATA based on each Lender's respective Revolving Commitment
Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 7.2) and in the case of both clauses
(i) and (ii) the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each Lender
hereby irrevocably agrees to make such Revolving Loans immediately upon
any such request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the
29
preceding sentence and on the same such date NOTWITHSTANDING (i) the
amount of Mandatory Borrowing may not comply with the minimum amount
for borrowings of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 4.3 are then satisfied,
(iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be
made by the time otherwise required in Section 2.1(b), (v) the date of
such Mandatory Borrowing, or (vi) any reduction in the Revolving
Committed Amount after any such Letter of Credit may have been drawn
upon; PROVIDED, HOWEVER, that in the event any such Mandatory Borrowing
should be less than the minimum amount for borrowings of Revolving
Loans otherwise provided in Section 2.1(b)(ii), the Borrower shall pay
to the Administrative Agent for its own account an administrative fee
of $500. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code), then each such Lender hereby agrees that it shall
forthwith fund (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower
on or after such date and prior to such purchase) its Participation
Interests in the outstanding LOC Obligations; PROVIDED, FURTHER, that
in the event any Lender shall fail to fund its Participation Interest
on the day the Mandatory Borrowing would otherwise have occurred, then
the amount of such Lender's unfunded Participation Interest therein
shall bear interest payable by such Lender to the Issuing Lender upon
demand, at the rate equal to, if paid within two (2) Business Days of
such date, the Federal Funds Effective Rate, and thereafter at a rate
equal to the Alternate Base Rate.
(f) MODIFICATION, EXTENSION. The issuance of any
supplement, modification, amendment, renewal, or extension to any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
(g) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender
shall have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of issue
by the International Chamber of Commerce (the "UCP"), in which case the
UCP may be incorporated therein and deemed in all respects to be a part
thereof.
SECTION 2.5 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. During the Commitment Period,
subject to the terms and conditions hereof, the Swingline Lender, in
its individual capacity, agrees to make certain revolving credit loans
to the Borrower (each a "SWINGLINE LOAN" and, collectively, the
"SWINGLINE LOANS") for the purposes hereinafter set forth; PROVIDED,
HOWEVER, (i) the aggregate amount of Swingline Loans outstanding at any
time shall not exceed FIVE MILLION DOLLARS ($5,000,000) (the "SWINGLINE
COMMITTED AMOUNT"), and (ii) the sum of the aggregate amount of
outstanding Revolving Loans PLUS Swingline Loans PLUS LOC Obligations
shall not exceed the Revolving Committed Amount. Swingline Loans
hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
30
(b) SWINGLINE LOAN BORROWINGS.
(i) NOTICE OF BORROWING AND DISBURSEMENT. The
Swingline Lender will make Swingline Loans available to the
Borrower on any Business Day upon request made by the Borrower
not later than 2:00 P.M. (Charlotte, North Carolina time) on
such Business Day. A notice of request for Swingline Loan
borrowing shall be made in the form of SCHEDULE 2.1(b)(i) with
appropriate modifications. Swingline Loan borrowings hereunder
shall be made in minimum amounts of $100,000 and in integral
amounts of $100,000 in excess thereof.
(ii) REPAYMENT OF SWINGLINE LOANS. Each Swingline
Loan borrowing shall be due and payable on the Revolving
Commitment Termination Date. The Swingline Lender may, at any
time, in its sole discretion, by written notice to the
Borrower and the Administrative Agent, demand repayment of its
Swingline Loans by way of a Revolving Loan borrowing, in which
case the Borrower shall be deemed to have requested a
Revolving Loan borrowing comprised entirely of Alternate Base
Rate Loans in the amount of such Swingline Loans; PROVIDED,
HOWEVER, that, in the following circumstances, any such demand
shall also be deemed to have been given one Business Day prior
to each of (i) the Revolving Commitment Termination Date, (ii)
the occurrence of any Event of Default described in Section
7.1(e), (iii) upon acceleration of the Credit Party
Obligations hereunder, whether on account of an Event of
Default described in Section 7.1(e) or any other Event of
Default, and (iv) the exercise of remedies in accordance with
the provisions of Section 7.2 hereof (each such Revolving Loan
borrowing made on account of any such deemed request therefor
as provided herein being hereinafter referred to as "MANDATORY
BORROWING"). Each Lender hereby irrevocably agrees to make
such Revolving Loans promptly upon any such request or deemed
request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on
the same such date NOTWITHSTANDING (I) the amount of Mandatory
Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder,
(II) whether any conditions specified in Section 4.3 are then
satisfied, (III) whether a Default or an Event of Default then
exists, (IV) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required in
Section 2.1(b)(i), (V) the date of such Mandatory Borrowing,
or (VI) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to
such Mandatory Borrowing or Contemporaneously therewith. In
the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code), then each Lender hereby
agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause
31
each such Lender to share in such Swingline Loans ratably
based upon its respective Revolving Commitment Percentage
(determined before giving effect to any termination of the
Commitments pursuant to Section 7.2); PROVIDED that (A) all
interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the
respective participation is purchased, and (B) at the time any
purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay
to the Swingline Lender interest on the principal amount of
such participation purchased for each day from and including
the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal
to the Alternate Base Rate.
(c) INTEREST ON SWINGLINE LOANS. Subject to the
provisions of Section 2.10, Swingline Loans shall bear interest at a
per annum rate equal to the Alternate Base Rate PLUS the applicable
Percentage for Revolving Loans that are Alternate Base Rate Loans.
Interest on Swingline Loans shall be payable in arrears on each
Interest Payment Date.
(d) SWINGLINE NOTE. The Swingline Loans shall be
evidenced by a duly executed promissory note of the Borrower to the
Swingline Lender in the original amount of the Swingline Committed
Amount and substantially in the form of SCHEDULE 2.5(d).
SECTION 2.6 FEES.
(a) COMMITMENT FEE. In consideration of the Revolving
Commitment, the Borrower agrees to pay to the Administrative Agent for
the ratable benefit of the Lenders a commitment fee (the "COMMITMENT
FEE") in an amount equal to the Applicable Percentage per annum on the
average daily unused amount of the aggregate Revolving Committed
Amount. For purposes hereof, Letters of Credit shall be considered
usage but Swingline Loans shall not be considered usage under the
aggregate Revolving Commitment Amount. The Commitment Fee shall be
payable quarterly in arrears on the 15th day following the last day of
each calendar quarter for the prior calendar quarter.
(b) LETTER OF CREDIT FEES. In consideration of the LOC
Commitments, the Borrower agrees to pay to the Issuing Lender a fee
(the "LETTER OF CREDIT FEE") equal to the Applicable Percentage per
annum on the average daily maximum amount available to be drawn under
each Letter of Credit from the date of issuance to the date of
expiration. In addition to such Letter of Credit Fee, the Issuing
Lender may charge, and retain for its own account without sharing by
the other Lenders, an additional facing fee of one-fourth of one
percent (1/4%) per annum on the average daily maximum amount available
to be drawn under each such Letter of Credit issued by it. The Issuing
Lender shall promptly pay over to the Administrative Agent for the
ratable benefit of the Lenders (including the Issuing Lender) the
Letter of Credit Fee. The Letter of Credit Fee shall be payable
quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.
32
(c) ISSUING LENDER FEES. In addition to the Letter of
Credit Fees payable pursuant to subsection (b) hereof, the Borrower
shall pay to the Issuing Lender for its own account without sharing by
the other Lenders the reasonable and customary charges from time to
time of the Issuing Lender with respect to the amendment, transfer,
administration, cancellation and conversion of, and drawings under,
such Letters of Credit (collectively, the "ISSUING LENDER FEES").
(d) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the
Fee Letter.
SECTION 2.7 COMMITMENT REDUCTIONS.
(a) VOLUNTARY REDUCTIONS. The Borrower shall have the
right to terminate or permanently reduce the unused portion of the
Revolving Committed Amount at any time or from time to time upon not
less than five Business Days' prior notice to the Administrative Agent
(which shall notify the Lenders thereof as soon as practicable) of each
such termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction which shall be in a
minimum amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof and shall be irrevocable and effective upon receipt by the
Administrative Agent, PROVIDED that no such reduction or termination
shall be permitted if after giving effect thereto, and to any
prepayments of the Revolving Loans made on the effective date thereof,
the sum of the then outstanding aggregate principal amount of the
Revolving Loans PLUS Swingline Loans PLUS LOC Obligations would exceed
the Revolving Committed Amount.
(b) MANDATORY REDUCTIONS. On any date that the Revolving
Loans are required to be prepaid pursuant to the terms of Section
2.8(b) (ii), (iii) and (iv), the Revolving Committed Amount shall be
automatically permanently reduced by the amount of such required
prepayment and/or reduction.
(c) REVOLVING COMMITMENT TERMINATION DATE. The Revolving
Commitment and the LOC Commitment and the Swingline Commitment shall
automatically terminate on the Revolving Commitment Termination Date.
SECTION 2.8 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower shall have the
right to prepay Loans in whole or in part from time to time; PROVIDED,
HOWEVER, that each partial prepayment of Revolving Loans and the Term
Loan shall be in a minimum principal amount of $1,000,000 and integral
multiples of $1,000,000 in excess thereof, and each prepayment of
Swingline Loans shall be in a minimum principal amount of $100,000 and
integral multiples of $100,000 in excess thereof. The Borrower shall
give three Business Days' irrevocable notice in the case of LIBOR Rate
Loans and one Business Day's irrevocable notice in the case of
Alternate Base Rate Loans, to the Administrative Agent (which shall
notify the Lenders thereof as soon as practicable). Amounts prepaid
under this Section
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2.8(a) shall be applied first to the Term Loan to the then next two
remaining scheduled principal installments and then ratably to the
remaining scheduled principal installments thereof until paid in full
and then to the Revolving Loans, in each case first to Alternate Base
Rate Loans and then to LIBOR Rate Loans in direct order of Interest
Period maturities. All prepayments under this Section 2.8(a) shall be
subject to Section 2.18, but otherwise without premium or penalty.
Interest on the principal amount prepaid shall be payable on the next
occurring Interest Payment Date that would have occurred had such loan
not been prepaid or, at the request of the Administrative Agent,
interest on the principal amount prepaid shall be payable on any date
that a prepayment is made hereunder through the date of prepayment.
Amounts prepaid on the Revolving Loans may be reborrowed in accordance
with the terms hereof. Amounts prepaid on the Term Loan may not be
reborrowed.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time after
the Closing Date, the sum of the aggregate principal amount of
outstanding Revolving Loans PLUS Swingline Loans PLUS LOC
Obligations shall exceed the Revolving Committed Amount, the
Borrower immediately shall prepay the Revolving Loans and
(after all Revolving Loans have been repaid) cash
collateralize the LOC Obligations, in an amount sufficient to
eliminate such excess.
(ii) ASSET DISPOSITIONS. Promptly following any Asset
Disposition in excess of $1,000,000 in the aggregate for all
such Asset Dispositions in any fiscal year, the Borrower shall
prepay the Loans in an aggregate amount equal to the Net Cash
Proceeds derived from such Asset Disposition (such prepayment
to be applied as set forth in clause (v) below); provided,
however, that such Net Cash Proceeds shall not be required to
be so applied to the extent the Borrower delivers to the
Administrative Agent a certificate stating that it intends to
use such Net Cash Proceeds to acquire fixed or capital assets
in replacement of the disposed assets within 180 days of the
receipt of such Net Cash Proceeds, it being expressly agreed
that any Net Cash Proceeds not so reinvested shall be applied
to repay the Loans immediately thereafter.
(iii) DEBT ISSUANCES. Immediately upon receipt by any
Credit Party of proceeds from any Debt Issuance, the Borrower
shall prepay the Loans in an aggregate amount equal to one
hundred percent (100%) of the Net Cash Proceeds of such Debt
Issuance to the Lenders (such prepayment to be applied as set
forth in clause (v) below).
(iv) RECOVERY EVENT. To the extent of cash proceeds
received in connection with a Recovery Event which are in
excess of $250,000 in the aggregate and which are not applied
in accordance with Section 6.5(a)(ii), immediately following
the 180th day occurring after the receipt by a Credit Party of
such cash proceeds, the Borrower shall prepay the Loans in an
aggregate
34
amount equal to one-hundred percent (100%) of such cash
proceeds to the Lenders (such prepayment to be applied as
set forth in clause (v) below).
(v) APPLICATION OF MANDATORY PREPAYMENTS. All amounts
required to be paid pursuant to this Section 2.8(b) shall be
applied as follows: (A) with respect to all amounts prepaid
pursuant to Section 2.8(b)(i), to Revolving Loans and (after
all Revolving Loans have been repaid) to a cash collateral
account in respect of LOC Obligations, (B) with respect to all
amounts prepaid pursuant to Section 2.8(b)(ii), pro rata
across the Revolving Loans (with a corresponding reduction in
the Revolving Commitments) and the Term Loan outstanding as of
such date and (C) with respect to all amounts prepaid pursuant
to Sections 2.8(b)(iii) and (iv), (1) FIRST to the Term Loan
(first to the then next two remaining scheduled principal
installments and then ratably to the remaining principal
installments thereof) and (2) SECOND to the Revolving Loans
and (after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations. Within the
parameters of the applications set forth above, prepayments
shall be applied first to Alternate Base Rate Loans and then
to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.8(b) shall be
subject to Section 2.18 and be accompanied by interest on the
principal amount prepaid through the date of prepayment.
SECTION 2.9 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
All borrowings, payments and prepayments in respect of Revolving Loans
and the Term Loan shall be in such amounts and be made pursuant to such
elections so that after giving effect thereto the aggregate principal amount of
the Revolving Loans and the Term Loan comprising any Tranche shall not be less
than (i) with respect to LIBOR Rate Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof and (ii) with respect to Base Rate Loans, $500,000 in
the aggregate or a whole multiple of $100,000 in excess thereof.
SECTION 2.10 DEFAULT RATE AND PAYMENT DATES.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Alternate Base Rate PLUS
2%).
SECTION 2.11 CONVERSION OPTIONS.
(a) The Borrower may, in the case of Revolving Loans and
the Term Loan, elect from time to time to convert Alternate Base Rate
Loans to LIBOR Rate Loans, by giving the Administrative Agent at least
three Business Days' prior irrevocable written notice of such election.
A form of Notice of Conversion/ Extension is attached as SCHEDULE 2.11.
If the date upon which an Alternate Base Rate Loan is to be converted
to a LIBOR Rate Loan is not a Business Day, then such conversion shall
be made on the
35
next succeeding Business Day and during the period from such last day
of an Interest Period to such succeeding Business Day such Loan shall
bear interest as if it were an Alternate Base Rate Loan. All or any
part of outstanding Alternate Base Rate Loans may be converted as
provided herein, PROVIDED that (i) no Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and
is continuing and (ii) partial conversions shall be in an aggregate
principal amount of $400,000 or a whole multiple of $100,000 in excess
thereof.
(b) Any LIBOR Rate Loans may be continued as such upon
the expiration of an Interest Period with respect thereto by compliance
by the Borrower with the notice provisions contained in Section
2.11(a); PROVIDED, that no LIBOR Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, in
which case such Loan shall be automatically converted to an Alternate
Base Rate Loan at the end of the applicable Interest Period with
respect thereto. If the Borrower shall fail to give timely notice of an
election to continue a LIBOR Rate Loan, or the continuation of LIBOR
Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be
automatically converted to Alternate Base Rate Loans at the end of the
applicable Interest Period with respect thereto.
SECTION 2.12 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate
Base Rate Loans shall be calculated on the basis of a year of 365 days
(or 366 days, as applicable) for the actual days elapsed. All other
fees, interest and all other amounts payable hereunder shall be
calculated on the basis of a 360 day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of each determination of a LIBOR Rate on the
Business Day of the determination thereof. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such
change in the Alternate Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrower
and the Lenders of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing
the computations used by the Administrative Agent in determining any
interest rate.
SECTION 2.13 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made PRO RATA according to the respective
Commitment Percentages of the Lenders. Each payment under this Agreement or any
Note shall be applied, first, to any fees then due and owing by the Borrower
pursuant to Section 2.6, second, to interest then due and owing in respect of
the Notes of the Borrower and, third, to principal then due and owing hereunder
and
36
under the Notes of the Borrower. Each payment on account of any fees
pursuant to Section 2.6 shall be made PRO RATA in accordance with the respective
amounts due and owing (except as to the portion of the Letter of Credit retained
by the Issuing Lender and the Issuing Lender Fees). Each payment (other than
prepayments) by the Borrower on account of principal of and interest on the
Revolving Loans and on the Term Loan shall be made PRO RATA according to the
respective amounts due and owing in accordance with Section 2.8 hereof.
Prepayments made pursuant to Section 2.16 shall be applied in accordance with
such section. Each mandatory prepayment on account of principal of the Loans
shall be applied in accordance with Section 2.8(b). All payments (including
prepayments) to be made by the Borrower on account of principal, interest and
fees shall be made without defense, set-off or counterclaim (except as provided
in Section 2.19(b)) and shall be made to the Administrative Agent for the
account of the Lenders at the Administrative Agent's office specified on
SCHEDULE 9.2 in Dollars and in immediately available funds not later than 2:00
P.M. (Charlotte, North Carolina time) on the date when due. The Administrative
Agent shall distribute such payments to the Lenders entitled thereto promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on the LIBOR Rate Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Administrative Agent or any
Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Administrative Agent in connection with enforcing the rights of
the Lenders under the Credit Documents and any protective advances made
by the Administrative Agent with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Administrative
Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
37
FIFTH, to the payment of the outstanding principal amount of
the Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from
time to time for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above
in the manner provided in this Section 2.13(b).
SECTION 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such
Lender (which notice shall be effective upon receipt) that such Lender
does not intend to make the proceeds of such Loan available to the
Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on
such date, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative
Agent shall be able to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent.
The Administrative Agent shall also be entitled to recover from the
Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to
the Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower
at the applicable rate for the applicable borrowing pursuant to the
Notice of Borrowing and (ii) from a Lender at the Federal Funds
Effective Rate.
38
(b) Unless the Administrative Agent shall have been
notified in writing by the Borrower, prior to the date on which any
payment is due from it hereunder (which notice shall be effective upon
receipt) that the Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each
Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if the
Borrower has not in fact made such payment to the Administrative Agent,
such Lender shall, on demand, repay to the Administrative Agent the
amount made available to such Lender. If such amount is repaid to the
Administrative Agent on a date after the date such amount was made
available to such Lender, such Lender shall pay to the Administrative
Agent on demand interest on such amount in respect of each day from the
date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent
at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted
to the Borrower or any Lender with respect to any amount owing under
this Section 2.14 shall be conclusive in the absence of manifest error.
SECTION 2.15 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain or be converted
into Alternate Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected.
SECTION 2.16 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any relevant Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR
39
Lending Office to make or maintain LIBOR Rate Loans as contemplated by this
Agreement or to obtain in the interbank eurodollar market through its LIBOR
Lending Office the funds with which to make such Loans, (a) such Lender shall
promptly notify the Administrative Agent and the Borrower thereof, (b) the
commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR
Rate Loans as such shall forthwith be suspended until the Administrative Agent
shall give notice that the condition or situation which gave rise to the
suspension shall no longer exist, and (c) such Lender's Loans then outstanding
as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest
Period for such Loans or within such earlier period as required by law as
Alternate Base Rate Loans. The Borrower hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any interest or fees payable by such
Lender to lenders of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through the Administrative
Agent, to the Borrower shall be conclusive in the absence of manifest error.
Each Lender agrees to use reasonable efforts (including reasonable efforts to
change its LIBOR Lending Office) to avoid or to minimize any amounts which may
otherwise be payable pursuant to this Section; PROVIDED, HOWEVER, that such
efforts shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender in its sole discretion to be
material.
SECTION 2.17 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof or compliance by
any Lender with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority
made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any
application relating thereto, any LIBOR Rate Loan made by it,
or change the basis of taxation of payments to such Lender in
respect thereof (except for changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in
the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of
Credit or to reduce any amount receivable hereunder or under any Note,
then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to
40
compensate such Lender for such additional cost or reduced amount
receivable which such Lender reasonably deems to be material as
determined by such Lender with respect to its LIBOR Rate Loans or
Letters of Credit. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the
absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or
LIBOR Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this paragraph of
this Section; PROVIDED, HOWEVER, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that
the adoption of or any change in any relevant Requirement of Law
regarding capital adequacy or in the interpretation or application
thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any central bank or
Governmental Authority made subsequent to the date hereof does or shall
have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a result of its commitment to lend hereunder
to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect
to capital adequacy) by an amount reasonably deemed by such Lender to
be material, then from time to time, within fifteen (15) days after
demand by such Lender, the Borrower shall pay to such Lender such
additional amount as shall be certified by such Lender as being
required to compensate it for such reduction to the extent that such
Lender reasonably determines that such additional amount is allocable
to the existence of such Lender's commitment to lend hereunder. Such a
certificate as to any additional amounts payable under this Section
submitted by a Lender (which certificate shall include a description of
the basis for the computation), through the Administrative Agent, to
the Borrower shall be conclusive absent manifest error.
(c) The agreements in this Section 2.17 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
SECTION 2.18 INDEMNITY.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees
41
payable by such Lender to lenders of funds obtained by it in order to maintain
its Loans hereunder. A certificate as to any additional amounts payable pursuant
to this Section submitted by any Lender, through the Administrative Agent, to
the Borrower (which certificate must be delivered to the Administrative Agent
within thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.19 TAXES.
(a) All payments made by the Borrower hereunder or under
any Note will be, except as provided in Section 2.19(b), made free and
clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any Governmental
Authority or by any political subdivision or taxing authority thereof
or therein with respect to such payments (but excluding any tax imposed
on or measured by the net income or profits (and franchise taxes
imposed in lieu thereof) of a Lender pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located
or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "TAXES"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be
less than the amount provided for herein or in such Note. The Borrower
will furnish to the Administrative Agent as soon as practicable after
the date the payment of any Taxes is due pursuant to applicable law
certified copies (to the extent reasonably available and required by
law) of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any
Taxes so levied or imposed and paid by such Lender to the extent not
paid by the Borrower.
(b) Each Lender that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) agrees to
deliver to the Borrower and the Administrative Agent on or prior to the
Closing Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section
9.6(d) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if the Lender is a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, two accurate
and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying such Lender's entitlement
to a complete exemption from United States withholding tax with respect
to payments to be made under this Agreement and under any Note, or (ii)
if the Lender is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code, either Internal Revenue Service Form 1001 or
4224 as set forth in clause (i) above, or (x) a certificate
substantially in the form of SCHEDULE
42
2.19 (any such certificate, a "2.19 CERTIFICATE") and (y) two accurate
and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying such Lender's entitlement to an
exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In
addition, each Lender agrees that it will deliver upon the Borrower's
request updated versions of the foregoing, as applicable, whenever the
previous certification has become obsolete or inaccurate in any
material respect, together with such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax
with respect to payments under this Agreement and any Note.
Notwithstanding anything to the contrary contained in Section 2.19(a),
but subject to the immediately succeeding sentence, (x) each Borrower
shall be entitled, to the extent it is required to do so by law, to
deduct or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees
or other amounts payable hereunder for the account of any Lender which
is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the
extent that such Lender has not provided to the Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 2.19(a) hereof to gross-up payments to be made to a
Lender in respect of Taxes imposed by the United States if (I) such
Lender has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section
2.19(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do
not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.19, the Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth
in Section 2.19(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Closing Date in any
applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or
LIBOR Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this Section;
PROVIDED, HOWEVER, that such efforts shall not cause the imposition on
such Lender of any additional costs or legal or regulatory burdens
deemed by such Lender in its sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant
to this Section 2.19 with respect to a Lender, such Lender shall use
reasonable efforts to obtain a refund of tax or credit against its tax
liabilities on account of such payment; PROVIDED that such Lender shall
have no obligation to use such reasonable efforts if either (i) it is
in an excess foreign tax credit position or (ii) it believes in good
faith, in its sole discretion, that claiming a refund or credit would
cause adverse tax consequences to it. In the event that such Lender
receives such a refund or credit, such Lender shall pay to the Borrower
an
43
amount that such Lender reasonably determines is equal to the net tax
benefit obtained by such Lender as a result of such payment by the
Borrower. In the event that no refund or credit is obtained with
respect to the Borrower's payments to such Lender pursuant to this
Section 2.19, then such Lender shall upon request provide a
certification that such Lender has not received a refund or credit for
such payments. Nothing contained in this Section 2.19 shall require a
Lender to disclose or detail the basis of its calculation of the amount
of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this
Section 2.19 to the Borrower or any other party.
(e) The agreements in this Section 2.19 shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
SECTION 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under
Section 2.4, the Borrower hereby agrees to protect, indemnify, pay and
save each Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit or (ii) the failure of the Issuing
Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority (all such acts
or omissions, herein called "GOVERNMENT ACTS").
(b) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Lender shall
not be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (iii) for failure of
the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit
or of the proceeds thereof; and (vii) for any consequences arising from
causes beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Lender's rights or powers
hereunder.
(c) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender,
44
under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such
Issuing Lender under any resulting liability to the Borrower. It is the
intention of the parties that this Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower, including, without
limitation, any and all risks of the acts or omissions, whether
rightful or wrongful, of any Government Authority. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender
or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of
the Issuing Lender.
(d) Nothing in this Section 2.20 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.4(d)
hereof. The obligations of the Borrower under this Section 2.20 shall
survive the termination of this Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in
this Section 2.20, the Borrower shall have no obligation to indemnify
any Issuing Lender in respect of any liability incurred by such Issuing
Lender arising out of the gross negligence or willful misconduct of the
Issuing Lender (including action not taken by an Issuing Lender), as
determined by a court of competent jurisdiction.
SECTION 2.21 REPLACEMENT OF LENDERS.
If any Lender delivers a notice pursuant to Section 2.16, 2.17 or 2.19
(hereinafter any such Lender shall be referred to as a "Replaced Lender"), then
in such case, the Borrower may, upon at least five (5) Business Days' notice to
the Administrative Agent and such Replaced Lender, designate a replacement
lender (a "Replacement Lender") acceptable to the Administrative Agent in its
reasonable discretion, to which such Replaced Lender shall, subject to its
receipt (unless a later date for the remittance thereof shall be agreed upon by
the Borrower and the Replaced Lender) of all amounts owed to such Replaced
Lender hereunder, assign all (but not less than all) of its rights and
obligations hereunder. Upon any assignment by any Lender pursuant to this
Section 2.21 becoming effective, the Replacement Lender shall thereupon be
deemed to be a "Lender" for all purposes of this Agreement and such Replaced
Lender shall thereupon cease to be a "Lender" for all purposes of this Agreement
and shall have no further rights or obligations hereunder (other than pursuant
to Sections 2.15, 2.16, 2.17 or 9.5 while such Replaced Lender was a Lender).
45
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represents
and warrants to the Administrative Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
The balance sheets and the related statements of income and of
cash flows of the Borrower for fiscal year 1999 audited by Arthur
Andersen, L.L.P. are complete and correct and present fairly the
financial condition of TTM Technologies, Inc. and its Subsidiaries as
of such dates. Additionally, (i) the unaudited interim consolidated
financial statements of the Borrower for each month ended after January
1, 2000 (including the month ending August 31, 2000), (ii) the pro
forma balance sheet of the Borrower as of the Closing Date, giving
effect to the Initial Public Offering and the other transactions
contemplated hereby, (iii) the monthly working capital detail for the
trailing twelve months and (iv) the five-year projections have been
prepared in good faith based upon reasonable assumptions and represent
the Borrower's best estimate of future results. All such financial
statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout
the periods involved (except as disclosed therein). From December 31,
1999 to the Closing Date, the Borrower and its Subsidiaries have no
Indebtedness or other unusual forward or long-term commitment which is
not incurred in the ordinary course of business or not fairly reflected
in the foregoing financial statements or in the Borrower's Registration
Statement on Form S-1 filed in connection with the Initial Public
Offering.
SECTION 3.2 NO CHANGE.
Since December 31, 1999 (and after delivery of annual audited financial
statements in accordance Section 5.1(a), from the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and the other Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the requisite power and authority
and the legal right to own and operate all its material property, to lease
the material property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified to conduct business and
in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify or be in
good standing could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to
46
comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS.
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained) or with the validity or enforceability of any Credit Document against
the Borrower or the other Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document to which it is a party has been duly executed
and delivered on behalf of the Borrower or the other Credit Parties, as the case
may be. Each Credit Document to which it is a party constitutes a legal, valid
and binding obligation of the Borrower or the other Credit Parties, as the case
may be, enforceable against the Borrower or such other Credit Party, as the case
may be, in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any other Credit Party is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
Except as set forth in SCHEDULE 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against any Credit Party
or any of its Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
47
SECTION 3.7 INVESTMENT COMPANY ACT.
Neither the Borrower nor any Credit Party is an "investment company",
or a company "controlled" by any entity which is required to register as an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.
SECTION 3.9 ERISA.
Except as set forth in SCHEDULE 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.10 ENVIRONMENTAL MATTERS.
Except as set forth in SCHEDULE 3.10, which in the aggregate, could not
be reasonably expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower and the other
Credit Parties, the facilities and properties owned, leased or operated
by the Borrower and the other Credit Parties or any of their
Subsidiaries (the "PROPERTIES") do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute
a violation of,
48
or (ii) could reasonably be expected to give rise to liability under,
any Environmental Law.
(b) To the best knowledge of the Borrower and the other
Credit Parties, the Properties and all operations of the Borrower and
the other Credit Parties and/or their Subsidiaries at the Properties
are in compliance, and have in the last three years been in compliance,
in all material respects with all applicable Environmental Laws, and
there is no contamination at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or
the business operated by the Borrower and the other Credit Parties or
any of their Subsidiaries (the "BUSINESS").
(c) Neither the Borrower nor any of the other Credit
Parties has received any written or actual notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard
to any of the Properties or the Business, nor does the Borrower or any
of the other Credit Parties nor any of their Subsidiaries have
knowledge or reason to believe that any such notice will be received or
is being threatened.
(d) To the best knowledge of the Borrower and the other
Credit Parties, Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could reasonably be expected to give rise
to liability under any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Properties in violation of, or in a manner
that could reasonably be expected to give rise to liability under, any
applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the Borrower
and the other Credit Parties, threatened, under any Environmental Law
to which the Borrower or any other Credit Party or any Subsidiary is or
will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business.
(f) To the best knowledge of the Borrower and the other
Credit Parties, there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any other
Credit Party or any Subsidiary in connection with the Properties or
otherwise in connection with the Business, in violation of or in
amounts or in a manner that could reasonably be expected to give rise
to liability under Environmental Laws.
SECTION 3.11 PURPOSE OF LOANS.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to (i) pay certain fees and expenses related to the Initial Public
Offering, (ii) refinance certain existing indebtedness of the Credit Parties and
(iii) provide for working capital, capital expenditures and other general
49
corporate purposes. The Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in connection
with surety and reclamation bonds, reinsurance, domestic or international trade
transactions and obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in the ordinary course
of business.
SECTION 3.12 SUBSIDIARIES.
Set forth on SCHEDULE 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties. Information on the attached Schedule
includes state of incorporation; the number of shares of each class of Capital
Stock or other equity interests outstanding; the number and percentage of
outstanding shares of each class of stock; and the number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and similar rights. The outstanding Capital Stock and other equity
interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).
SECTION 3.13 OWNERSHIP.
Each Credit Party and its Subsidiaries is the owner of, and has good
and marketable title to, all of its respective assets, except as may be
permitted pursuant Section 6.13 hereof, and none of such assets is subject to
any Lien other than Permitted Liens.
SECTION 3.14 INDEBTEDNESS.
Except as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.
SECTION 3.15 TAXES.
Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid (a) all amounts of taxes shown thereon to be due (including interest
and penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is aware
as of the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.16 INTELLECTUAL PROPERTY.
Each of the Borrower and its Subsidiaries owns, or has the legal right
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes necessary for each of them to conduct its business as currently
conducted. Set forth on SCHEDULE 3.16 is a list of all Intellectual Property
owned by each of the Borrower and its Subsidiaries or that the Borrower or any
of its Subsidiaries has the right to use. Except as provided on SCHEDULE 3.16,
no claim has
50
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower or any of its Subsidiaries know of
any such claim, and, to the knowledge of the Borrower or any of its
Subsidiaries, the use of such Intellectual Property by the Borrower or any of
its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that in the aggregate, could not reasonably be expected
to have a Material Adverse Effect. SCHEDULE 3.16 may be updated from time to
time by the Borrower to include new Intellectual Property by giving written
notice thereof to the Administrative Agent.
SECTION 3.17 SOLVENCY.
The fair saleable value of each Credit Party's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Credit Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the transactions contemplated by this Credit Agreement, debts
beyond its ability to pay such debts as they become due.
SECTION 3.18 INVESTMENTS.
All Investments of each of the Borrower and its Subsidiaries are
Permitted Investments.
SECTION 3.19 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 3.19(a) is a list of the Properties of the
Borrower and its Subsidiaries with street address, county and state where
located. Set forth on SCHEDULE 3.19(b) is a list of all locations where any
tangible personal property of the Borrower and its Subsidiaries is located,
including county and state where located. Set forth on SCHEDULE 3.19(c) is the
chief executive office and principal place of business of each of the Borrower
and its Subsidiaries. SCHEDULE 3.19(a), 3.19(b) and 3.19(c) may be updated from
time to time by the Borrower to include new properties or locations by giving
written notice thereof to the Administrative Agent.
SECTION 3.20 NO BURDENSOME RESTRICTIONS.
None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.21 BROKERS' FEES.
None of the Borrower or any of its Subsidiaries has any obligation to
any Person in respect of any finder's, broker's, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents other than (a) the closing and other fees payable pursuant to
this Credit Agreement and (b) the fees payable pursuant to the Initial Public
Offering.
51
SECTION 3.22 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Closing Date, other than as set forth in SCHEDULE 3.22 hereto, and none of the
Borrower or any of its Subsidiaries (i) has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years, other
than as set forth in SCHEDULE 3.22 hereto or (ii) has knowledge of any potential
or pending strike, walkout or work stoppage.
SECTION 3.23 SECURITY DOCUMENTS.
The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements or the recordation of the applicable Mortgage Instruments in favor of
First Union, as Collateral Agent for the Lenders) perfected security interests
and Liens, prior to all other Liens other than Permitted Liens.
SECTION 3.24 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any Credit Party or any of its Subsidiaries to the
Administrative Agent or any Lender for purposes of or in connection with this
Agreement or any other Credit Document (including, without limitation,
information disclosed in all financial statements and all footnotes attached
thereto), or any transaction contemplated hereby or thereby, is or will be true
and accurate in all material respects and not incomplete by omitting to state
any material fact necessary to make such information not misleading. There is no
fact now known to the Borrower, any other Credit Party or any of their
Subsidiaries which has, or could reasonably be expected to have, a Material
Adverse Effect which fact has not been set forth herein, in the financial
statements of the Borrower and its Subsidiaries furnished to the Administrative
Agent and/or the Lenders, or in any certificate, opinion or other written
statement made or furnished by any Credit Party to the Administrative Agent
and/or the Lenders.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING
LOANS AND THE TERM LOANS.
This Agreement shall become effective upon the satisfaction or waiver
of the following conditions precedent:
(a) EXECUTION OF AGREEMENT. The Administrative Agent
shall have received (i) counterparts of this Agreement, executed by a
duly authorized officer of each party
52
hereto, (ii) for the account of each Lender, Revolving Notes and the
Term Notes and for the account of the Swingline Lender, a Swingline
Note and (iii) counterparts of the Security Agreement and the Pledge
Agreement, in each case conforming to the requirements of this
Agreement and executed by duly authorized officers of the Credit
Parties.
(b) AUTHORITY DOCUMENTS. The Administrative Agent shall
have received the following:
(i) ARTICLES OF INCORPORATION. Copies of the
articles of incorporation or other charter documents, as
applicable, of each Credit Party certified to be true and
complete as of a recent date by the appropriate governmental
authority of the state of its incorporation.
(ii) RESOLUTIONS. Copies of resolutions of
the board of directors of each Credit Party approving and
adopting the Credit Documents, the transactions contemplated
therein and authorizing execution and delivery thereof,
certified by an officer of such Credit Party as of the Closing
Date to be true and correct and in force and effect as of such
date.
(iii) BYLAWS. A copy of the bylaws of each
Credit Party certified by an officer of such Credit Party as
of the Closing Date to be true and correct and in force and
effect as of such date.
(iv) GOOD STANDING. Copies of (i)
certificates of good standing, existence or its equivalent
with respect to the each Credit Party certified as of a recent
date by the appropriate governmental authorities of the state
of incorporation and each other state in which the failure to
so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect on the business or
operations of the Borrower and its Subsidiaries in such state
and (ii) a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) INCUMBENCY. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the Closing Date.
SECTION 4.2 CONDITIONS TO INITIAL REVOLVING LOANS AND TERM LOANS.
The obligations of each Lender to make the initial Revolving Loans and
the Term Loan on the Funding Date is subject to the satisfaction or waiver of
the following conditions precedent:
(a) LEGAL OPINIONS OF COUNSEL. The Administrative Agent
shall have received an opinion of Shearman & Sterling, counsel for the
Credit Parties, dated the
53
Closing Date and addressed to the Administrative Agent and the Lenders,
in form and substance reasonably acceptable to the Administrative
Agent.
(b) PERSONAL PROPERTY COLLATERAL. The Administrative
Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent:
(i) searches of Uniform Commercial Code
filings in the jurisdiction of the chief executive office of
each Credit Party and each jurisdiction where any Collateral
is located or where a filing would need to be made in order to
perfect the Administrative Agent's security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements
for each appropriate jurisdiction as is necessary, in the
Administrative Agent's sole discretion, to perfect the
Administrative Agent's security interest in the Collateral;
(iii) duly executed consents as are
necessary, in the Administrative Agent's sole discretion, to
perfect the Lenders' security interest in the Collateral; and
(iv) in the case of any personal property
Collateral located at premises leased by a Credit Party, such
estoppel letters, consents and waivers from the landlords on
such real property as may be required by the Administrative
Agent.
(c) REAL PROPERTY COLLATERAL. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to
the Administrative Agent:
(i) fully executed and notarized
mortgages, deeds of trust or deeds to secure debt (each, as
the same may be amended, modified, restated or supplemented
from time to time, a "MORTGAGE INSTRUMENT" and collectively
the "MORTGAGE INSTRUMENTS") encumbering the fee interest in
the properties listed in SCHEDULE 3.19(a) as properties owned
by the Credit Parties (each a "MORTGAGED PROPERTY" and
collectively the "MORTGAGED PROPERTIES");
(ii) a title report obtained by the Credit
Parties in respect of each of the Mortgaged Properties;
(iii) with respect to each Mortgaged
Property, current form ALTA mortgagee title insurance policies
issued by Lawyers Title Insurance Corporation (the "MORTGAGE
POLICIES"), in amounts not less than the respective amounts
designated in SCHEDULE 3.19(a) with respect to any particular
Mortgaged Property, assuring the Administrative Agent that
each of the Mortgage Instruments creates a valid and
enforceable first priority mortgage lien on the applicable
Mortgaged Property, free and clear of all defects and
encumbrances
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except Permitted Liens, shall provide for affirmative
insurance and such reinsurance as the Administrative Agent may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent;
(iv) evidence as to (A) whether any
Mortgaged Property is in an area designated by the Federal
Emergency Management Agency as having special flood or mud
slide hazards (a "FLOOD HAZARD PROPERTY") and (B) if any
Mortgaged Property is a Flood Hazard Property, (1) whether the
community in which such Mortgaged Property is located is
participating in the National Flood Insurance Program, (2) the
applicable Credit Party's written acknowledgment of receipt of
written notification from the Administrative Agent (a) as to
the fact that such Mortgaged Property is a Flood Hazard
Property and (b) as to whether the community in which each
such Flood Hazard Property is located is participating in the
National Flood Insurance Program and (3) copies of insurance
policies or certificates of insurance of the Borrower and its
Subsidiaries evidencing flood insurance reasonably
satisfactory to the Administrative Agent and naming the
Administrative Agent as sole loss payee on behalf of the
Lenders; and
(v) maps or plats of an as-built survey of
the sites of the Mortgaged Properties certified to the
Administrative Agent and Lawyers Title Insurance Corporation
in a manner reasonably satisfactory to them, dated a date
satisfactory to each of the Administrative Agent and Lawyers
Title Insurance Corporation by an independent professional
licensed land surveyor reasonably satisfactory to each of the
Administrative Agent and Lawyers Title Insurance Corporation,
which maps or plats and the surveys on which they are based
shall be sufficient to delete any standard printed survey
exception contained in the applicable title policy and be made
in accordance with the Minimum Standard Detail Requirements
for Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown
on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and
other improvements and the established building setback lines;
(B) the lines of streets abutting the sites and width thereof;
(C) all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the
sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site
is described as being on a filed map, a legend relating the
survey to said map.
(d) LIABILITY AND CASUALTY INSURANCE. The Administrative
Agent shall have received copies of insurance policies or certificates
of insurance evidencing liability and casualty insurance meeting the
requirements set forth herein or in the Security
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Documents. The Administrative Agent shall be named as loss payee and
additional insured on all such insurance policies for the benefit of
the Lenders.
(e) FEES. The Administrative Agent shall have received
all fees, if any, owing pursuant to the Fee Letter and Section 2.6.
(f) LITIGATION. There shall not exist any pending
litigation or, to the best of any Credit Party's knowledge,
investigation affecting or relating to the Borrower or any of its
Subsidiaries, this Agreement and the other Credit Documents that in the
reasonable judgment of the Administrative Agent could materially
adversely affect the Borrower or any of its Subsidiaries, this
Agreement and the other Credit Documents, that has not been settled,
dismissed, vacated, discharged or terminated prior to the Closing Date.
(g) SOLVENCY EVIDENCE. The Administrative Agent shall
have received an officer's certificate for each Credit Party prepared
by the chief financial officer of each such Credit Party as to the
financial condition, solvency and related matters of each such Credit
Party, in each case after giving effect to the initial borrowings under
the Credit Documents and the other transactions contemplated hereby, in
substantially the form of SCHEDULE 4.2(g) hereto.
(h) ACCOUNT DESIGNATION LETTER. The Administrative Agent
shall have received the executed Account Designation Letter in the form
of SCHEDULE 1.1(a) hereto.
(i) CORPORATE STRUCTURE. The corporate capital and
ownership structure of the Borrower and its Subsidiaries shall be as
described in SCHEDULE 3.12. The Administrative Agent shall be satisfied
with management structure and legal structure of the Borrower as of the
Closing Date.
(j) GOVERNMENT CONSENT. The Administrative Agent shall
have received evidence that all governmental, shareholder and material
third party consents and approvals necessary in connection with the
financings and other transactions contemplated hereby have been
obtained and all applicable waiting periods have expired without any
action being taken by any authority that could restrain, prevent or
impose any material adverse conditions on such transactions or that
could seek or threaten any of the foregoing.
(k) COMPLIANCE WITH LAWS. The financings and other
transactions contemplated hereby shall be in compliance with all
applicable laws and regulations (including all applicable securities
and banking laws, rules and regulations).
(l) BANKRUPTCY. There shall be no bankruptcy or
insolvency proceedings with respect to the Borrower or any of its
Subsidiaries.
(m) MATERIAL ADVERSE EFFECT. Except as disclosed on
SCHEDULE 3.2, no material adverse change shall have occurred since
December 31, 1999 in the business, properties,
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operations or conditions (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole.
(n) LEVERAGE RATIO. After giving effect to the
transactions contemplated hereby and the closing of this Agreement, the
Administrative Agent shall be satisfied that the Leverage Ratio of the
Borrower and its Subsidiaries for the twelve month period ending as of
August 31, 2000 shall not exceed 2.50 to 1.0.
(o) FINANCIAL STATEMENTS. The Administrative Agent shall
have received copies of the financial statements referred to in Section
3.1 hereof, each in form and substance satisfactory to it.
(p) TERMINATION OF EXISTING INDEBTEDNESS. All existing
Indebtedness for borrowed money of the Borrower and its Subsidiaries
(other than the Indebtedness listed on SCHEDULE 6.1(b)), including,
without limitation, the Subordinated Notes shall have been repaid in
full and terminated.
(q) ADDITIONAL MATTERS. All other legal matters in
connection with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to the Administrative
Agent and its counsel.
SECTION 4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder
is subject to the satisfaction or waiver of the following conditions precedent
on the date of making such Extension of Credit:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Credit Parties herein, in the Security
Documents or which are contained in any certificate furnished at any
time under or in connection herewith shall be true and correct in all
material respects on and as of the date of such Extension of Credit as
if made on and as of such date other than any such representations and
warranties that, by its terms, refer to a specific date other than the
date of such Extension of Credit, which shall be true and correct to
all material respects on and as of such specific date.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event
of Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date unless
such Default or Event of Default shall have been waived in accordance
with this Agreement.
(c) COMPLIANCE WITH COMMITMENTS. Immediately after giving
effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans PLUS Swingline Loans
PLUS LOC Obligations shall not exceed the Revolving Committed Amount,
(or, if such Extension of Credit is on the Closing Date, $15,000,000)
(ii) the
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LOC Obligations shall not exceed the LOC Committed Amount and (iii) the
Swingline Loans shall not exceed the Swingline Commitment.
(d) ADDITIONAL CONDITIONS TO REVOLVING LOANS. If such
Loan is made pursuant to Section 2.1, all conditions set forth in such
Section shall have been satisfied.
(e) ADDITIONAL CONDITIONS TO TERM LOAN. If such Loan is
made pursuant to Section 2.2, all conditions set forth in such Section
shall have been satisfied.
(f) ADDITIONAL CONDITIONS TO LETTERS OF CREDIT. If such
Extension of Credit is made pursuant to Section 2.4, all conditions set
fort in such Section shall have been satisfied.
(g) ADDITIONAL CONDITIONS TO SWINGLINE LOANS. If such
Extension of Credit is made pursuant to Section 2.5, all conditions set
forth in such Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (g) of this
Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Borrower shall, and shall cause each of its Subsidiaries (other than
in the case of Sections 5.1, 5.2 or 5.7 hereof), to:
SECTION 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available,
but in any event within ninety (90) days after the end of each fiscal
year of the Borrower, a copy of the consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and of cash
flows of the Borrower and its consolidated Subsidiaries for such year,
such consolidated statements shall be audited by a firm of independent
certified public accountants of nationally recognized standing
reasonably acceptable to the Required Lenders, and shall set forth in
each case in comparative form the figures for the previous year,
reported on
58
without a "going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification; and
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available
and in any event within forty-five (45) days after the end of each of
the first three fiscal quarters of the Borrower, a company-prepared
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such period and related company-prepared
statements of income and cash flows for the Borrower and its
consolidated Subsidiaries for such quarterly period and for the portion
of the fiscal year ending with such period, in each case setting forth
in comparative form consolidated figures for the corresponding period
or periods of the preceding fiscal year (subject to normal recurring
year-end audit adjustments);
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available
and in any event within thirty (30) days after the end of each month of
the Borrower (other than at the end of a fiscal quarter, in which case
45 days after the end thereof), a company-prepared consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such period and related company-prepared statements of income and
cash flows for the Borrower and its consolidated Subsidiaries for such
monthly period and for the portion of the fiscal year ending with such
period, in each case setting forth in comparative form consolidated
figures for the corresponding period or periods of the preceding fiscal
year (subject to normal recurring year-end audit adjustments); and
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.
SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a) above, a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in Sections 5.1(a) and 5.1(b) above, a
certificate of a Responsible Officer stating that, to the best of such
Responsible Officer's knowledge, each of the Credit Parties during such
period observed or performed in all material respects all of its
covenants and other
59
agreements, and satisfied in all material respects every condition,
contained in this Agreement to be observed, performed or satisfied by
it, and that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
such certificate shall include the calculations in reasonable detail
required to indicate compliance with Section 5.9 as of the last day of
such period;
(c) within thirty (30) days after the same are sent,
copies of all material financial reports (other than those otherwise
provided pursuant to Section 5.1 and those which are of a promotional
nature) and other financial information which the Borrower sends to its
shareholders, and within thirty days after the same are filed, copies
of all financial statements and non-confidential reports which the
Borrower may make to, or file with the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal
year of the Borrower, a certificate containing information regarding
the amount of all Asset Dispositions, Debt Issuances, and Equity
Issuances that were made during the prior fiscal year and amounts
received in connection with any Recovery Event during the prior fiscal
year;
(e) promptly upon receipt thereof, a copy of any other
report or "management letter" submitted by independent accountants to
the Borrower or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of such Person; and
(f) promptly, such additional financial and other
information as the Administrative Agent, on behalf of any Lender, may
from time to time reasonably request.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Borrower or its Subsidiaries, as the case may be.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now
conducted by it on the Closing Date and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all property useful and necessary in its
business in good working order and condition (ordinary wear and tear
and obsolescence excepted) except where failure to do so would not have
a Material Adverse Effect;
(b) Maintain with financially sound and reputable
insurance companies insurance on all its material property (including
without limitation its material tangible Collateral) in at least such
amounts and against at least such risks as are usually insured against
in the same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent, upon written
request, full information as to the insurance carried; PROVIDED,
HOWEVER, that the Borrower and its Subsidiaries may maintain self
insurance plans to the extent companies of similar size and in similar
businesses do so. The Administrative Agent shall be named as loss payee
or mortgagee, as its interest may appear, and/or additional insured
with respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Administrative Agent, that it will give
the Administrative Agent thirty (30) days prior written notice before
any such policy or policies shall be altered or canceled, and that no
act or default of the Borrower or any of its Subsidiaries or any other
Person shall affect the rights of the Administrative Agent or the
Lenders under such policy or policies. The present insurance coverage
of the Borrower and its Subsidiaries is outlined as to carrier, policy
number, expiration date, type and amount on SCHEDULE 5.5(b); and
(c) In case of any material loss, damage to or
destruction of the Collateral of any Credit Party or any part thereof,
such Credit Party shall promptly give written notice thereof to the
Administrative Agent generally describing the nature and extent of such
damage or destruction.
SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
by the Administrative Agent or any Lender, the Administrative Agent or any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records (other than materials protected by the
attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
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SECTION 5.7 NOTICES.
Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) promptly, but in any event within two (2) Business
Days after the Borrower knows or has reason to know thereof, the
occurrence of any Default or Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or
proceeding known to the Borrower, affecting the Borrower or any of its
Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within thirty
(30) days after the Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC (other than a
Permitted Lien) or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan; and
(e) promptly, any other development or event which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
SECTION 5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and use its
best efforts to ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws
and obtain and comply in all material respects with and maintain, and
use its best efforts to ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse
Effect;
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(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the
same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not reasonably be expected to
have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective employees,
agents, officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable
to the operations of the Borrower any of its Subsidiaries or the
Properties, or any legally binding orders, requirements or demands of
Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing arise out of
the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this paragraph shall
survive repayment of the Notes and all other amounts payable hereunder.
SECTION 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date, the
Borrower shall, and shall cause each of its Subsidiaries to, comply with the
following financial covenants:
(a) LEVERAGE RATIO. The Leverage Ratio, as of the last
day of each fiscal quarter of the Borrower and its Subsidiaries
occurring during the periods indicated below, shall be less than or
equal to the following:
(b) FIXED CHARGE COVERAGE RATIO. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal quarter of the
Borrower and its Subsidiaries shall be greater than or equal to 1.10 to
1.00.
(c) CONSOLIDATED NET WORTH. The Consolidated Net Worth
shall not at any time be less than $88,825,000 increased by the sum of
(i) on a cumulative basis as of the end of each fiscal quarter of the
Borrower, commencing with the fiscal quarter ending December 31, 2000,
by an amount equal to 50% of Consolidated Net Income (to the extent
positive) for the fiscal quarter then ended plus (ii) an amount equal
to 100% of the Net Cash Proceeds from any Equity Issuance occurring
after the Closing Date.
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(d) CONSOLIDATED CAPITAL EXPENDITURES. Consolidated
Capital Expenditures (which shall not include the conversion of
operating leases to Capital Leases or other Indebtedness as permitted
by Section 6.17) as of the end of any fiscal year of the Borrower shall
be less than or equal to the amount set forth below during the periods
set forth below:
SECTION 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.
The Credit Parties will cause each of their Domestic Subsidiaries,
whether newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement. The guaranty
obligations of any such Additional Credit Party shall be secured by, among other
things, the Collateral of the Additional Credit Party.
SECTION 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.
SECTION 5.12 PLEDGED ASSETS.
Each Credit Party will, and will cause each of its Subsidiaries to, be
subject at all times to a first priority, perfected Lien with respect to all of
such Subsidiary's Collateral (subject in each case to Permitted Liens) in favor
of the Administrative Agent pursuant to the terms and conditions of the Security
Documents or such other security documents as the Administrative Agent shall
reasonably request. Each Credit Party shall, and shall cause each of its
Subsidiaries to, adhere to the covenants regarding the location of personal
property as set forth in the Security Documents.
ARTICLE VI
NEGATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest,
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Commitment Fees and all other amounts owing to the Administrative Agent or any
Lender hereunder, are paid in full that:
SECTION 6.1 INDEBTEDNESS.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this
Agreement and the other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries
existing as of the Closing Date as referenced in the financial
statements referenced in Section 3.1 (and set out more specifically in
SCHEDULE 6.1(b)) hereto and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension;
(c) Indebtedness of the Borrower and its Subsidiaries
incurred after the Closing Date consisting of Capital Leases or
Indebtedness incurred to provide all or a portion of the purchase price
or cost of construction of an asset provided that (i) such Indebtedness
when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing; and (iii) the
total amount of all such Indebtedness shall not exceed $2,000,000 at
any time outstanding; provided, however that notwithstanding the
foregoing, the operating leases set forth on SCHEDULE 6.17 hereto may
be converted into Capital Leases or the equipment subject to such
operating leases may be purchased at such time as the Borrower may
elect.
(d) Unsecured intercompany Indebtedness among the
Borrower and its Subsidiaries, PROVIDED that any such Indebtedness
shall be fully subordinated to the Credit Party Obligations hereunder
on terms reasonably satisfactory to the Administrative Agent;
(e) Indebtedness and obligations owing under Hedging
Agreements relating to the Loans hereunder and other Hedging Agreements
entered into in order to manage existing or anticipated interest rate,
exchange rate or commodity price risks and not for speculative
purposes;
(f) Indebtedness and obligations of Credit Parties owing
under documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of
credit except for the Letters of Credit hereunder) generally in an
aggregate amount not to exceed $250,000 in the aggregate;
65
(g) Indebtedness in respect of Guaranty Obligations
(other than Guaranty Obligations permitted pursuant to Section 6.1(a))
in an aggregate amount not to exceed $500,000 at any time outstanding;
and
(h) other Indebtedness of the Borrower and its Subsidiaries
which does not exceed $2,500,000 in the aggregate at any time
outstanding.
SECTION 6.2 LIENS.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
SECTION 6.3 GUARANTY OBLIGATIONS.
The Borrower will not, nor will it permit any Subsidiary to, enter into
or otherwise become or be liable in respect of any Guaranty Obligations
(excluding specifically therefrom endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) other than (i)
those in favor of the Lenders in connection herewith, and (ii) Guaranty
Obligations by the Borrower or its Subsidiaries of Indebtedness permitted under
Section 6.1(b) and Section 6.1(g) (except, as regards Indebtedness under Section
6.1(b) thereof, only if and to the extent such Indebtedness was guaranteed on
the Closing Date).
SECTION 6.4 NATURE OF BUSINESS.
The Borrower will not, nor will it permit any Subsidiary to, alter the
character of its business in any material respect from that conducted as of the
Closing Date.
SECTION 6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS,
ETC.
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell,
transfer, lease or otherwise dispose of its property or assets or agree
to do so at a future time except the following, without duplication,
shall be expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition
of property or assets (A) to an unrelated party not in the
ordinary course of business (other than Specified Sales),
where and to the extent that they are the result of a Recovery
Event or (B) the sale, lease, transfer or other disposition of
machinery, parts and equipment no longer used or useful in the
conduct of the business of the Borrower or any of its
Subsidiaries, as appropriate, in its reasonable discretion, so
long as the net proceeds therefrom are used to repair or
replace damaged property or to
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purchase or otherwise acquire new assets or property,
PROVIDED that such purchase or acquisition is committed to
within 180 days of receipt of the net proceeds and such
purchase or acquisition is consummated within 270 days of
receipt of such proceeds;
(iii) the sale, lease or transfer of property or
assets (at fair value) between the Borrower and any Guarantor;
(iv) the sale, lease or transfer of property or
assets not to exceed $1,000,000 in the aggregate in any
fiscal year;
PROVIDED, that in the case of a sale, lease or transfer pursuant to
Section 6.5(a)(ii)(A) and Section 6.5(a)(iv), at least 75% of the
consideration received therefor by the Borrower or any such Subsidiary
is in the form of cash or Cash Equivalents and in the case of a sale
pursuant to Section 6.5(a)(v), 100% of the consideration received
therefor by the Borrower or any Subsidiary is in the form of cash or
Cash Equivalents; PROVIDED, FURTHER, that with respect to sales of
assets permitted hereunder only, the Administrative Agent shall be
entitled, without the consent of the Required Lenders, to release its
Liens relating to the particular assets sold; or
(b) (i) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) the property or assets
of any Person (other than purchases or other acquisitions of inventory,
leases, materials, property and equipment in the ordinary course of
business, except as otherwise limited or prohibited herein); PROVIDED,
that so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower may acquire all
or a majority of the Capital Stock or other ownership interest in any
Person (in a similar or related line of business and which has earnings
before interest, taxes, depreciation and amortization for the prior
four fiscal quarters in an amount greater than $0) or all or a
substantial portion of the assets, property and/or operations of a
Person (in a similar or related line of business and which had earnings
before interest, taxes, depreciation and amortization for the prior
four fiscal quarters in an amount greater than $0); PROVIDED, however,
that both before and after giving effect to any such acquisition
otherwise permitted hereunder, (A) the Leverage Ratio shall not exceed
2.5 to 1.0, on a pro forma basis and (B) there shall be not less than
$7,500,000 of availability under Section 2.1 or (ii) enter into any
transaction of merger or consolidation, except for (A) investments or
acquisitions permitted pursuant to Section 6.6, and (B) the merger or
consolidation of a Credit Party with and into another Credit Party,
PROVIDED that if the Borrower is a party thereto, the Borrower will be
the surviving corporation.
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SECTION 6.6 ADVANCES, INVESTMENTS AND LOANS.
The Borrower will not, nor will it permit any Subsidiary to, lend money
or extend credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person except for Permitted Investments.
SECTION 6.7 TRANSACTIONS WITH AFFILIATES.
Except for those transactions contemplated by the agreements set forth
on SCHEDULE 6.7 and except as permitted in subsection (iv) of the definition of
Permitted Investments, the Borrower will not, nor will it permit any Subsidiary
to, enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder or
Affiliate other than on fair and reasonable terms and conditions substantially
as favorable as would be obtainable in a comparable arm's-length transaction
with a Person other than an officer, director, shareholder or Affiliate.
SECTION 6.8 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
The Borrower will not, nor will it permit any Subsidiary to, create,
form or acquire any Subsidiaries, except for Domestic Subsidiaries which are
joined as Additional Credit Parties in accordance with the terms hereof. The
Borrower will not sell, transfer, pledge or otherwise dispose of any Capital
Stock or other equity interests in any of its Subsidiaries, nor will it permit
any of its Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of
any of their Capital Stock or other equity interests, except in a transaction
permitted by Section 6.5.
SECTION 6.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL
CONTRACTS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year or to change any fiscal quarter end as set forth on
SCHEDULE 6.9(e). The Borrower will not, nor will it permit any Subsidiary to,
amend, modify or change its articles of incorporation (or corporate charter or
other similar organizational document) or bylaws (or other similar document)
without the prior written consent of the Required Lenders. The Borrower will
not, nor will it permit any of its Subsidiaries to, without the prior written
consent of the Administrative Agent, amend, modify, cancel or terminate or fail
to renew or extend or permit the amendment, modification, cancellation or
termination of any of the Material Contracts, except in the event that such
amendments, modifications, cancellations or terminations could not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.10 LIMITATION ON RESTRICTED ACTIONS.
The Borrower will not, nor will it permit any Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans
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or advances to any Credit Party, (d) sell, lease or transfer any of its
properties or assets to any Credit Party, or (e) act as a Guarantor and pledge
its assets pursuant to the Credit Documents or any renewals, refinancings,
exchanges, refundings or extension thereof, except (in respect of any of the
matters referred to in clauses (a)-(d) above) for such encumbrances or
restrictions existing under or by reason of (i) this Agreement and the other
Credit Documents, (ii) applicable law, (iii) any document or instrument
governing Indebtedness incurred pursuant to Section 6.1(c), PROVIDED that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith or (iv) any Permitted Lien or
any document or instrument governing any Permitted Lien, PROVIDED that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.
SECTION 6.11 RESTRICTED PAYMENTS.
The Borrower will not, nor will it permit any Subsidiary to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party (directly or indirectly through
Subsidiaries), (c) as permitted by Section 6.16 and (d) the Borrower may
repurchase stock and options of management; PROVIDED, however, that (i) no
Default or Event of Default has occurred and is continuing at such time or would
be directly or indirectly caused as a result thereof, (ii) after giving effect
to any such repurchase, the sum of the aggregate principal amount of outstanding
Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall not exceed
$17,500,000 and (iii) after giving effect to any such repurchase, the Leverage
Ratio shall not exceed 2.5 to 1.0, on a pro forma basis.
SECTION 6.12 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Borrower will not, nor will it permit any Subsidiary to, after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness if such amendment or modification would add
or change any terms in a manner adverse to the issuer of such Indebtedness, or
shorten the final maturity or average life to maturity or require any payment to
be made sooner than originally scheduled or increase the interest rate
applicable thereto or change any subordination provision thereof.
SECTION 6.13 SALE LEASEBACKS.
The Borrower will not, nor will it permit any Subsidiary to, directly
or indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired in excess of $2,000,000 in the aggregate on an annual basis, (a) which
the Borrower or any Subsidiary has sold or transferred or is to sell or transfer
to a Person which is not the Borrower or any Subsidiary or (b) which the
Borrower or any Subsidiary intends to use for substantially the same purpose as
any other property which has been sold or is to be sold or transferred by the
Borrower or any Subsidiary to another Person which is not the Borrower or any
Subsidiary in connection with such lease.
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SECTION 6.14 NO FURTHER NEGATIVE PLEDGES.
The Borrower will not, nor will it permit any Subsidiary to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Agreement and the other Credit Documents, (b)
pursuant to any document or instrument governing Indebtedness incurred pursuant
to Section 6.1(c), PROVIDED that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith and
(c) in connection with any Permitted Lien or any document or instrument
governing any Permitted Lien, PROVIDED that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Lien.
SECTION 6.15 OTHER PAYMENTS.
The Borrower will not, nor will it permit any Subsidiary to, make
payments in respect of the Sponsors or any of their Affiliates except (a)
$1,500,000 to the Sponsors or any of their Affiliates on the Funding Date with
respect to the buy-out of the management agreement and (b) such other amounts
payable to the Sponsors or any other their Affiliates in connection with an
acquisition permitted by Section 6.5(b) in an aggregate amount not to exceed
$1,000,000 during the term of this Agreement.
SECTION 6.16 OPERATING LEASES.
The Borrower will not, nor will it permit any Subsidiary to incur or
permit to exist any obligations in respect of operating leases which require
rental payments in excess of $3,800,000 in the aggregate for all such Persons
during any fiscal year; provided, however that the amount set forth above shall
be permanently reduced on a dollar for dollar basis upon the conversion of each
operating lease set forth on SCHEDULE 6.17 to either a Capital Lease or other
Indebtedness otherwise permitted under Section 6.1.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
(a) The Borrower shall fail to pay any principal on any
Note when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to reimburse the Issuing Lender for any LOC
Obligations when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Note or any fee or other
amount payable hereunder when due in accordance with the terms thereof
or hereof and such
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failure shall continue unremedied for three (3) Business Days (or any
Guarantor shall fail to pay on the Guaranty in respect of any of the
foregoing or in respect of any other Guaranty Obligations thereunder);
or
(b) Any representation or warranty made or deemed made
herein, in the Security Documents or in any of the other Credit
Documents or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made
or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply
with or observe any term, covenant or agreement applicable to it
contained in Section 5.7(a), Section 5.9 or Article VI hereof ; or (ii)
any Credit Party shall fail to comply with any other covenant,
contained in this Credit Agreement or the other Credit Documents or any
other agreement, document or instrument among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party in
favor of the Administrative Agent or the Lenders (other than as
described in Sections 7.1(a) or 7.1(c)(i) above), and in the event such
breach or failure to comply is capable of cure, is not cured within
thirty (30) days of its occurrence; or
(d) The Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest on any
Indebtedness (other than the Notes) in a principal amount outstanding
of at least $500,000 in the aggregate for the Borrower and any of its
Subsidiaries beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any
Indebtedness in a principal amount outstanding of at least $500,000 in
the aggregate for the Borrower and its Subsidiaries or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries
of such Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity; or
(e) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect 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 any substantial part of its
assets, or the Borrower or any Subsidiary shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any Subsidiary any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an
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order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or any Subsidiary any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower or any Subsidiary shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Borrower or any Subsidiary shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(f) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered by
insurance) of $1,000,000 or more and all such judgments or decrees
shall not have been paid and satisfied, vacated, discharged, stayed or
bonded pending appeal within 10 days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
(other than a Permitted Lien) shall arise on the assets of the Borrower
or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower, any of its Subsidiaries or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, any Multiemployer Plan or (vi) any
other similar event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could have a Material Adverse Effect; or
(h) There shall occur a Change of Control; or
(i) The Guaranty or any provision thereof shall cease to
be in full force and effect or any Guarantor or any Person acting by or
on behalf of any Guarantor shall deny or disaffirm any Guarantor's
obligations under the Guaranty; or
(j) Any other Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the Lenders
the security interests, liens, rights, powers and privileges purported
to be created thereby (except as such documents may be
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terminated or no longer in force and effect in accordance with the
terms thereof, other than those indemnities and provisions which by
their terms shall survive).
SECTION 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
and (b) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the written consent of the Required
Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) the Administrative Agent may, or upon the
written request of the Required Lenders, the Administrative Agent shall, by
notice of default to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith and direct the Borrower to pay to the Administrative
Agent cash collateral as security for the LOC Obligations for subsequent
drawings under then outstanding Letters of Credit an amount equal to the maximum
amount of which may be drawn under Letters of Credit then outstanding, whereupon
the same shall immediately become due and payable.
ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all
73
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care. Without limiting the foregoing, the
Administrative Agent may appoint one of its affiliates as its agent to perform
the functions of the Administrative Agent hereunder relating to the advancing of
funds to the Borrower and distribution of funds to the Lenders and to perform
such other related functions of the Administrative Agent hereunder as are
reasonably incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of the Borrower
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance by the Borrower of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower.
SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
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SECTION 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender 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 that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; PROVIDED, HOWEVER, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.
SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER
LENDERS.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other 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 Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on
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which indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of any Credit Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; PROVIDED,
HOWEVER, that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from the Agent's gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction. The agreements in this Section 8.7 shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.
SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the Notes, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall be approved by the Borrower, whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After any retiring Agent's resignation as Administrative Agent, the
provisions of this Section 8.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this Section nor
may be released except as specifically provided herein or in the Security
Documents or in accordance with the provisions of this Section 9.1. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders may specify in such instrument, any of the requirements
of this Agreement or the other Credit Documents or any Default or Event of
Default and its consequences; PROVIDED, HOWEVER, that no such waiver and no such
amendment, waiver, supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or Note or any installment thereon, or
reduce the stated rate of any interest or fee payable
hereunder (other than interest at the increased post-default
rate) or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the written consent
of each Lender directly affected thereby, or
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders, without the written consent of
all the Lenders, or
(iii) amend, modify or waive any provision of Article
VIII without the written consent of the then Administrative
Agent, or
(iv) release any of the Guarantors from their
obligations under the Guaranty, except in accordance with the
terms thereof, without the written consent of all of the
Lenders, or
(v) release all or substantially all of the
Collateral, without the written consent of all of the
Lenders, or
(vi) without the consent of Lenders holding
in the aggregate more than 50% of the outstanding Term Loans,
extend the time for or the amount or the manner of application
of proceeds of any mandatory prepayment required by Section
2.8(b)(ii), (iii) or (iv) hereof, or
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(vii) amend, modify or waive any provision of the
Credit Documents requiring consent, approval or request of the
Required Lenders or all Lenders, without the written consent
of all of the Required Lenders or Lenders as appropriate and,
PROVIDED, FURTHER, that no amendment, waiver or consent
affecting the rights or duties of the Administrative Agent or
the Issuing Lender under any Credit Document shall in any
event be effective, unless in writing and signed by the
Administrative Agent and/or the Issuing Lender, as applicable,
in addition to the Lenders required hereinabove to take such
action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of
the Borrower shall not be required for any amendment, modification or waiver of
the provisions of Article VIII (other than the provisions of Section 8.9);
PROVIDED, HOWEVER, that the Administrative Agent will provide written notice to
the Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing SCHEDULE 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; PROVIDED, HOWEVER, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrower and
each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
SECTION 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when confirmation of transmittal via telecopy (or other facsimile
device) to the number set out herein has been received by the sender, (c) the
day following the day on which the same has been delivered prepaid to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case, addressed as follows in the case of the Borrower,
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the other Credit Parties and the Administrative Agent, and as set forth on
SCHEDULE 9.2 in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
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SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, PROVIDED that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation, negotiation, printing and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Administrative Agent or (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the Notes and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of the Credit Documents and any such other documents and the use, or proposed
use, of proceeds of the Loans (all of the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, HOWEVER, that the Borrower shall not have
any obligation hereunder to the Administrative Agent or any Lender with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, as determined by a
court of competent jurisdiction. The agreements in this
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Section 9.5 shall survive repayment of the Loans, Notes and all other amounts
payable hereunder.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
LENDERS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement or the other Credit
Documents without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender, or any other interest of
such Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend
the scheduled maturity of any Loan or Note or any installment thereon
in which such Participant is participating, or reduce the stated rate
or extend the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount of
the Participant's participation over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without
consent of any participant if the Participant's participation is not
increased as a result thereof), (ii) release any of the Guarantors from
their obligations under the Guaranty, (iii) release all or
substantially all of the collateral, or (iv) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under
this Agreement. In the case of any such participation, the Participant
shall not have any rights under this Agreement or any of the other
Credit Documents (the Participant's rights against such Lender in
respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation, PROVIDED that each
Participant shall be entitled to the benefits of Sections 2.16, 2.17,
2.18 and 9.5 with respect to its participation in the Commitments and
the Loans outstanding from time to time; PROVIDED, that no Participant
shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive
in respect of the amount of the
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participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at
any time, sell or assign to any Lender or any affiliate thereof and
with the consent of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, the Borrower (in each case,
which consent shall not be unreasonably withheld), to one or more
additional banks or financial institutions ("PURCHASING LENDERS"), all
or any part of its rights and obligations under this Agreement and the
Notes in minimum amounts of $5,000,000 with respect to its Revolving
Commitment, its Revolving Loans or its Term Loans (or, if less, the
entire amount of such Lender's obligations), pursuant to a Commitment
Transfer Supplement, executed by such Purchasing Lender and such
transferor Lender (and, in the case of a Purchasing Lender that is not
then a Lender or an affiliate thereof, the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the
Borrower), and delivered to the Administrative Agent for its acceptance
and recording in the Register; PROVIDED, HOWEVER, that any sale or
assignment to an existing Lender shall not require the consent of the
Administrative Agent or the Borrower nor shall any such sale or
assignment be subject to the minimum assignment amounts specified
herein. Upon such execution, delivery, acceptance and recording, from
and after the Transfer Effective Date specified in such Commitment
Transfer Supplement, (x) the Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the transferor Lender
thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the
remaining portion of a transferor Lender's rights and obligations under
this Agreement, such transferor Lender shall cease to be a party
hereto). Such Commitment Transfer Supplement shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of
such transferor Lender under this Agreement and the Notes. On or prior
to the Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the Notes delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement
new Notes to the order of such Purchasing Lender in an amount equal to
the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender
in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the
form of the Notes replaced thereby. The Notes surrendered by the
transferor Lender shall be returned by the Administrative Agent to the
Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its
address referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a
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register (the "REGISTER") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment
Transfer Supplement, together with payment to the Administrative Agent
by the transferor Lender or the Purchasing Lender, as agreed between
them, of a registration and processing fee of $3,500.00 for each
Purchasing Lender listed in such Commitment Transfer Supplement and the
Notes subject to such Commitment Transfer Supplement, the
Administrative Agent shall (i) accept such Commitment Transfer
Supplement, (ii) record the information contained therein in the
Register and (iii) give prompt notice of such acceptance and
recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to
any Participant or Purchasing Lender (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which
has been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement, in each case subject to Section 9.15.
(g) At the time of each assignment pursuant to this
Section 9.6 to a Person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms
(and, if applicable, a 2.18 Certificate) described in Section 2.19.
(h) Nothing herein shall prohibit any Lender from
pledging or assigning any of its rights under this Agreement
(including, without limitation, any right to payment of principal and
interest under any Note) to any Federal Reserve Bank in accordance with
applicable laws.
SECTION 9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "BENEFITED
LENDER") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e), or
otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in
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respect of such other Lender's Loans, or interest thereon, such
benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's
Loan, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Loans may
exercise all rights of payment (including, without limitation, rights
of set-off) with respect to such portion as fully as if such Lender
were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon the occurrence of any Event of
Default, to setoff and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrower, or any part thereof in such amounts as such
Lender may elect, against and on account of the obligations and
liabilities of the Borrower to such Lender hereunder and claims of
every nature and description of such Lender against the Borrower, in
any currency, whether arising hereunder, under the Notes or under any
documents contemplated by or referred to herein or therein, as such
Lender may elect, whether or not such Lender has made any demand for
payment and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be
exercised by such Lender against the Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of
the Borrower, or against anyone else claiming through or against the
Borrower or any such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment
or attachment creditor, to the extent permitted by law, notwithstanding
the fact that such right of set-off shall not have been exercised by
such Lender prior to the occurrence of any Event of Default. Each
Lender agrees promptly to notify the Borrower and the Administrative
Agent after any such set-off and application made by such Lender;
PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such set-off and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
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SECTION 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
SECTION 9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
SECTION 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it.
SECTION 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 9.12 INTEGRATION.
This Agreement and the Notes represent the agreement of the Borrower,
the Administrative Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent, the Borrower or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the Notes.
SECTION 9.13 GOVERNING LAW.
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance with, the law of the State of North Carolina.
SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and, by execution and delivery of this
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement
from which no appeal has been taken or is
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available. Each of the Borrower and the other Credit Parties irrevocably agrees
that all service of process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address set
forth in Section 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto, such service being hereby
acknowledged by the each of the Borrower and the other Credit Parties to be
effective and binding service in every respect. Each of the Borrower, the other
Credit Parties, the Administrative Agent and the Lenders irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens which it may now or hereafter
have to the bringing of any such action or proceeding in any such jurisdiction.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against the Borrower or the other Credit Parties in the court of any other
jurisdiction.
SECTION 9.15 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Borrower and its Subsidiaries which
is furnished pursuant to this Agreement, any other Credit Document or any
documents contemplated by or referred to herein or therein and which is
designated by the Borrower to the Lenders in writing as confidential or as to
which it is otherwise reasonably clear such information is not public, except
that any Lender may disclose any such information (a) as has become generally
available to the public other than by a breach of this Section 9.16, (b) as may
be required or appropriate in any report, statement or testimony submitted to
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or the OCC or the NAIC or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in response to any summons or subpoena or any law,
order, regulation or ruling applicable to such Lender, (d) to any prospective
Participant or assignee in connection with any contemplated transfer pursuant to
Section 9.6, PROVIDED that such prospective transferee shall have been made
aware of this Section 9.16 and shall have agreed to be bound by its provisions
as if it were a party to this Agreement or (e) with the consent of the Borrower
(which consent shall not be unreasonably withheld) to GOLD SHEETS and other
similar bank trade publications; such information to consist of deal terms and
other information regarding the credit facilities evidenced by this Credit
Agreement customarily found in such publications.
SECTION 9.16 ACKNOWLEDGMENTS.
The Borrower and the other Credit Parties each hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower or any other
Credit Party arising out of or in
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connection with this Agreement and the relationship between
Administrative Agent and Lenders, on one hand, and the Borrower and the
other Credit Parties, on the other hand, in connection herewith is
solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among
the Borrower or the other Credit Parties and the Lenders.
SECTION 9.17 WAIVER AGREEMENT.
Each of the Lenders has reviewed that certain waiver agreement attached
as SCHEDULE 9.17 hereto and by its signature below agrees to be bound to the
terms contained therein and authorizes the Administrative Agent to execute such
waiver agreement on its behalf.
SECTION 9.18 WAIVERS OF JURY TRIAL.
THE BORROWER, THE OTHER CREDIT PARTIES, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 9.19 BINDING EFFECT; TERMINATION OF THIS CREDIT
AGREEMENT; TERMINATION OF EXISTING CREDIT AGREEMENT.
(a) This Credit Agreement shall become effective at such time
when all of the conditions set forth in Section 4.1 have been satisfied or
waived by the Lenders and it shall have been executed by each Credit Party
and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together,
bear the signatures of each Lender, and thereafter this Credit Agreement
shall be binding upon and inure to the benefit of each Credit Party, the
Administrative Agent and each Lender and their respective successors and
assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding, no Letters of Credit shall be
outstanding, all of the Credit Party Obligations have been irrevocably satisfied
in full and all of the Commitments hereunder shall have expired or been
terminated.
(c) The Credit Parties and the Existing Lenders (including the
Issuing Lender) party to the Existing Credit Agreement each hereby agrees that,
at such time as the Credit Agreement shall have become effective pursuant to the
terms of subsection (a) above, (i) the Existing Credit Agreement automatically
shall be deemed amended and restated in its entirety by this Credit Agreement,
(ii) the Commitments under the Existing Credit Agreement and as defined therein
automatically shall be terminated and replaced with the Commitments hereunder
and (iii) all of the promissory notes executed by the Borrower in connection
with the Existing Credit Agreement automatically shall be canceled and replaced
by the Notes.
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ARTICLE X
GUARANTY
SECTION 10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: the Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all Credit Party Obligations to the Administrative Agent and the
Lenders. If any or all of the Credit Party Obligations of the Borrower to the
Administrative Agent and the Lenders becomes due and payable hereunder, each
Guarantor unconditionally promises to pay such indebtedness to the
Administrative Agent and the Lenders, on order, or demand, together with any and
all reasonable expenses which may be incurred by the Administrative Agent or the
Lenders in collecting any of the Credit Party Obligations.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
SECTION 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such Credit Party Obligations to the Administrative Agent for
the account of the Lenders, or order, on demand, in lawful money of the United
States. Each of the Guarantors further agrees that to the extent that the
Borrower or a Guarantor shall make a payment or a transfer of an interest in any
property to the Administrative Agent or any Lender, which payment or transfer or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, or otherwise is avoided, and/or required to be repaid to the
Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such avoidance or
repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made.
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SECTION 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
SECTION 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
SECTION 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this Agreement,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any guarantor or any other party for the payment of this
Guaranty or the indebtedness and exchange, enforce waive and release any such
security, (c) apply such security and direct the order or manner of sale thereof
as the Administrative Agent and the Lenders in their discretion may determine
and (d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors.
SECTION 10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
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SECTION 10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as
shall be required by applicable statute and cannot be waived) to
require the Administrative Agent or any Lender to (i) proceed against
the Borrower, any other guarantor or any other party, (ii) proceed
against or exhaust any security held from the Borrower, any other
guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent's or any Lender's power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense of
the Borrower, any other guarantor or any other party other than payment
in full of the indebtedness, including without limitation any defense
based on or arising out of the disability of the Borrower, any other
guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full
of the indebtedness. Without limiting the generality of the provisions
of this Article X, each of the Guarantors hereby specifically waives
the benefits of N.C. Gen. Stat. Section 26-7 through 26-9, inclusive.
The Administrative Agent or any of the Lenders may, at their election,
foreclose on any security held by the Administrative Agent or a Lender
by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or
remedy the Administrative Agent and any Lender may have against the
Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to
the extent the indebtedness has been paid. Each of the Guarantors
waives any defense arising out of any such election by the
Administrative Agent and each of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantors against the
Borrower or any other party or any security.
(b) Each of the Guarantors waives all presentments,
demands for performance, protests and notices, including without
limitation notices of nonperformance, notice of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional indebtedness.
Each Guarantor assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the
indebtedness and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that neither the
Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or
risks.
(c) Each of the Guarantors hereby agrees it will not
exercise any rights of subrogation which it may at any time otherwise
have as a result of this Guaranty (whether contractual, under Section
509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the
Lenders against the Borrower or any other guarantor of the indebtedness
of the Borrower owing to the Lenders (collectively, the "OTHER
PARTIES") and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such
time as the Loans hereunder shall have been paid and the Commitments
have been
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terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the Administrative
Agent and the Lenders now have or may hereafter have against any Other
Party, any endorser or any other guarantor of all or any part of the
indebtedness of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the indebtedness of the Borrower
until such time as the Loans hereunder shall have been paid and the
Commitments have been terminated.
SECTION 10.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
SECTION 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the Commitments relating thereto, confirm to the
Borrower, the Guarantors or any other Person that the such indebtedness and
obligations have been paid and the Commitments relating thereto terminated,
subject to the provisions of Section 10.2.
SECTION 10.10 CALIFORNIA WAIVERS.
Without limiting the generality of the foregoing, each Guarantor waives
all rights and defenses that such Guarantor may have because the Credit Party
obligations are secured by real property. This means, among other things: (1)
the administrative agent or the lenders may collect from such Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Borrower or any other Credit Party; (2) if the administrative agent or the
lenders foreclose on any real property collateral pledged by the Borrower or any
other Credit Party: (A) the amount of the obligations may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price; (B) the administrative agent or
the lenders may collect from such Guarantor even if the administrative agent or
the Lenders, by foreclosing on the real property collateral, have destroyed any
right such Guarantor may have to collect from the Borrower or any other Credit
Party. This is an unconditional and irrevocable waiver of any rights and
defenses such Guarantor may have because the Credit Party obligations are
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure (the "CCP").
In addition, each Guarantor waives all rights and defenses arising out
of an election of remedies by the Administrative Agent or the Lenders, even
though that election of remedies,
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such as a nonjudicial foreclosure with respect to security for a guaranteed
obligation, has destroyed such Guarantor's rights by the operation of Section
580d of the CPC or otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.