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EXHIBIT 10.13
Amendment No. 3 to Credit Agreement
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AMENDMENT NO. 3
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), dated as of March 21, 2001, is entered into by and among PERSONNEL
GROUP OF AMERICA, INC. (the "Borrower"), certain subsidiaries of the Borrower
identified on the signatures pages hereto, the financial institutions identified
on the signature pages hereto and BANK OF AMERICA, N.A., formerly known as
NationsBank, N.A., as agent for the Lenders (in such capacity, the "Agent").
Except as otherwise defined in this Amendment, terms defined in the Credit
Agreement referred to below (as amended by this Amendment) are used herein as
defined therein.
RECITALS
A. The Borrower, the Guarantors party thereto, the Lenders party
thereto and the Agent entered into that certain Amended and Restated Credit
Agreement dated as of June 23, 1997 (as amended by Amendment No. 1 to Amended
and Restated Credit Agreement dated as of March 17, 1998 and Amendment No. 2 to
Amended and Restated Credit Agreement dated as of September 29, 1999 and as
otherwise modified prior to the date hereof, the "Credit Agreement").
B. The Borrower has requested certain modifications to the Credit
Agreement.
C. Such modifications require the consent of the Required Lenders.
D. The Required Lenders have consented to the requested modifications
on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
I. AMENDMENTS TO CREDIT AGREEMENT
Subject to the satisfaction of the conditions precedent set forth in
Section 5 in Article II hereof, from and after the Third Amendment Effective
Date (as defined below), the Credit Agreement (together with the Schedules
attached thereto) is hereby amended in its entirety to read in the form of such
Credit Agreement (together with the Schedules attached thereto) attached hereto
as Exhibit A to this Amendment.
II. MISCELLANEOUS
1. Representations and Warranties. Each of the Credit Parties
represents and warrants to the Lenders and the Agent as follows:
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(i) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and delivered by
such Credit Party and constitutes such Credit Party's legal, valid and
binding obligation, enforceable in accordance with its terms, except as
such enforceability may be limited (x) by general principles of equity
and conflicts of laws or (y) by bankruptcy, reorganization, insolvency,
moratorium or other laws of general application relating to or
affecting the enforcement, of creditors' rights.
(iii) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by such Credit Party of this Amendment.
(iv) The execution and delivery of this Amendment does not
diminish or reduce its obligations under the Credit Documents
(including, without limitation, in the case of each Guarantor, such
Guarantor's guaranty pursuant to Section 4 of the Credit Agreement) in
any manner, except as specifically set forth herein.
(v) Such Credit Party has no claims, counterclaims, offsets,
or defenses to the Credit Documents and the performance of its
obligations thereunder, or if such Credit Party has any such claims,
counterclaims, offsets, or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby
waived, relinquished and released in consideration of the Required
Lenders' execution and delivery of this Amendment.
(vi) The representations and warranties of the Credit Parties
set forth in Section 6 of the Credit Agreement are true and correct as
of the date hereof (except those that expressly relate to an earlier
date) and all of the provisions of the Credit Documents, except as
amended hereby, are in full force and effect.
(vii) Subsequent to the execution and delivery of this
Amendment and after giving effect hereto, no unwaived event has
occurred and is continuing which constitutes a Default or an Event of
Default.
2. Liens. Each Credit Party affirms the liens and security interests
created and granted by it in the Credit Documents (including, but not limited
to, the Pledge Agreement and the Security Agreement) and agrees that this
Amendment shall in no manner adversely affect or impair such liens and security
interests.
3. Effect of Amendment. Except as expressly modified and amended in
this Amendment, all of the terms, provisions and conditions of the Credit
Documents shall remain unchanged and in full force and effect. The Credit
Documents and any and all other documents heretofore, now or hereafter executed
and delivered pursuant to the terms of the Credit Agreement are hereby amended
so that any reference to the Credit Agreement shall mean a reference to the
Credit Agreement as amended hereby.
4. Expenses. The Borrower agrees to pay all reasonable costs and
expenses of the Agent incurred in connection with the preparation, execution and
delivery of this Amendment, including the reasonable fees and expenses of the
Agent's legal counsel.
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5. Conditions Precedent. This Amendment shall become effective on the
day (the "Third Amendment Effective Date") on which each of the following
conditions precedent has been satisfied:
(a) the Agent shall have received counterparts of (i) this
Amendment, duly executed and delivered by each of the Credit Parties,
the Required Lenders and the Agent, and (ii) the Security Agreement,
duly executed and delivered by each Credit Party, together with a
certificate of the Secretary or Assistant Secretary of the Borrower and
each other Credit Party as to the incumbency and specimen signatures of
the officers of the Borrower and each other Credit Party who are
authorized to execute such Credit Documents and each other document to
be executed and delivered by the Borrower or any other Credit Party
pursuant hereto;
(b) the Agent shall have received a certified copy of the
resolutions of the Board of Directors of the Borrower and each other
Credit Party evidencing its approval of this Amendment, the Collateral
Documents and the other Credit Documents and matters contemplated
hereby, and a certified copy of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to this Amendment and the other Credit Documents;
(c) the Agent shall have received a legal opinion of Xxxxxxxx
Xxxxxxxx & Xxxxxx, P.A., acting as counsel to each of the Credit
Parties, in form and substance satisfactory to the Agent;
(d) the Agent shall have received all documents it may
reasonably request relating to the existence and good standing of the
Credit Parties and to the authorization, execution and delivery of this
Amendment and the other Credit Documents and other matters relevant
hereto, all in form and substance satisfactory to the Agent and its
counsel in their reasonable discretion;
(e) the Agent shall have received (i) from the chief financial
officer of the Borrower a certificate to the effect that as of the date
hereof and as of the Third Amendment Effective Date all representations
and warranties made by the Borrower and each other Credit Party in this
Amendment and each other Credit Document are true and correct in all
material respects and (ii) from the chief financial officer of the
Borrower a covenant compliance certificate demonstrating compliance
with the financial covenants contained in Section 7.11 of the Credit
Agreement, as amended, as of December 31, 2000;
(f) no Default or Event of Default shall have occurred and be
continuing;
(g) the Agent shall have received (except to the extent the
Agent shall have agreed to give the Credit Parties additional time to
deliver any such item, not to exceed thirty (30) days from the Third
Amendment Effective Date) (i) delivery in pledge of stock certificates
representing all of the interests in any Subsidiary of the Borrower
held or beneficially owned by any Credit Party, together with
assignments thereof duly endorsed in blank by the registered holder
thereof, (ii) perfection by control over all other investment property
constituting Collateral, and (iii) financing statements covering all
personal property and fixtures constituting Collateral and duly
executed by the Credit Parties in form sufficient for filing in all
jurisdictions that are scheduled as filing jurisdictions in the
Collateral Documents or as to which the filing of financing statements
may reasonably be requested by the Agent; and
(h) each Lender party to the Credit Agreement who executes
this Amendment on or before 5:00 P.M. Eastern Standard Time on March
21, 2001 (provided this Amendment is
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approved by the Required Lenders) shall have received an amendment fee
equal to 0.50% of such Lender's Commitment after giving effect to
transactions contemplated hereby.
6. Counterparts/Telecopy. This Amendment may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts by telecopy shall be effective as an original
and shall constitute a representation that an original will be delivered.
7. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of North Carolina.
8. ENTIRETY. THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDE ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER
HEREOF. THESE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment, to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BORROWER: PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By: /S/ XXXXX X. XXXX
---------------------------------
Name: Xxxxx X. Xxxx
Title: President and
Chief Financial Officer
GUARANTORS: STAFFPLUS, INC.,
a Delaware corporation
INFOTECH SERVICES, INC.,
a North Carolina corporation
BAL ASSOCIATES INCORPORATED,
a California corporation
CREATIVE CORPORATE STAFFING, INC.,
a North Carolina corporation
ADVANCED BUSINESS CONSULTANTS, INC.,
a Kansas corporation
INFOTECH CONTRACT SERVICES, INC.,
a Massachusetts corporation
PALADIN CONSULTING, INC.,
a Texas corporation
IMS CONSULTING, INC.,
a North Carolina corporation
XXXXXX, INC.,
a California corporation
XXXXXXXXXX.XXX, INC.,
a Florida corporation
By: /S/ XXXXX X. XXXX
---------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President of each
of the above-named
Guarantors
PFI CORP.,
a Delaware corporation
By: /S/ XXXXX X. XXXX
---------------------------------
Name: Xxxxx X. Xxxx
Title: President
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LENDERS: BANK OF AMERICA, N.A.,
-------
formerly known as NationsBank, N.A.
and Bank of America Illinois,
as Agent and as a Lender
By: /S/ XXXXXXX XXXXXXXX
Name: Xxxxxxx XxXxxxxx
Title: Managing Director
BNP - PARIBAS
By: /S/ XXXXX X. XXXXXXXXX
Name: Xxxxx X. Xxxxxxxxx
Title: Director
By: /S/ XXXXX X. MARCH
Name: Xxxxx X. March
Title: Vice President
COMERICA BANK
By: /S/ XXXXXXXX X. XXXXXX
Name: Xxxxxxxx X. Xxxxxx
Title: Assistant Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /S/ XXXXX X. CHAPPELLA
Name: Xxxxx X. Chappella
Title: Vice President
BANK ONE, NA
By: /S/ XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Corporate Banking Officer
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PNC BANK, NATIONAL ASSOCIATION
By: /S/ XXXX X. XXXXXXXX
Name: Xxxx X. Xxxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
By: /S/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
WACHOVIA BANK, NA
By: /S/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: Vice President
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EXHIBIT A
Credit Agreement (as amended) is attached
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Exhibit A
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of June 23, 1997
among
PERSONNEL GROUP OF AMERICA, INC.
as Borrower,
THE SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
BANK OF AMERICA, N.A.,
formerly NationsBank, N.A.,
as Agent
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................................1
1.1 Definitions.................................................................................... 1
1.2 Computation of Time Periods....................................................................20
1.3 Accounting Terms...............................................................................20
SECTION 2 CREDIT FACILITIES.....................................................................................20
2.1 Loans..........................................................................................20
2.2 Letter of Credit Subfacility...................................................................22
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................26
3.1 Default Rate...................................................................................26
3.2 Extension and Conversion.......................................................................26
3.3 Prepayments and Schedule Amortization..........................................................27
3.4 Termination and Reduction of Committed Amount..................................................29
3.5 Fees...........................................................................................29
3.6 Capital Adequacy...............................................................................30
3.7 Inability To Determine Interest Rate...........................................................31
3.8 Illegality. ..................................................................................31
3.9 Requirements of Law............................................................................31
3.10 Taxes..........................................................................................32
3.11 Indemnity. ..................................................................................34
3.12 Pro Rata Treatment.............................................................................34
3.13 Sharing of Payments............................................................................35
3.14 Payments, Computations, Etc....................................................................35
3.15 Evidence of Debt...............................................................................37
3.16 Mandatory Assignment...........................................................................37
SECTION 4 GUARANTY..............................................................................................38
4.1 The Guarantee..................................................................................38
4.2 Obligations Unconditional......................................................................38
4.3 Reinstatement..................................................................................39
4.4 Certain Additional Waivers.....................................................................39
4.5 Remedies.......................................................................................39
4.6 Rights of Contribution.........................................................................40
4.7 Continuing Guarantee...........................................................................40
4.8 Release of XxxxxxXxxx.xxx, Inc.................................................................40
SECTION 5 CONDITIONS............................................................................................41
5.1 Closing Conditions.............................................................................41
5.2 Conditions to all Extensions of Credit.........................................................42
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................43
6.1 Financial Condition............................................................................43
6.2 No Change; Dividends...........................................................................44
6.3 Organization; Existence; Compliance with Law...................................................44
6.4 Power; Authorization; Enforceable Obligations..................................................44
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6.5 No Legal Bar...................................................................................45
6.6 No Material Litigation.........................................................................45
6.7 No Default.....................................................................................45
6.8 Ownership of Property; Liens...................................................................45
6.9 Intellectual Property..........................................................................45
6.10 No Burdensome Restrictions.....................................................................46
6.11 Taxes..........................................................................................46
6.12 ERISA..........................................................................................46
6.13 Governmental Regulations, Etc..................................................................47
6.14 Subsidiaries...................................................................................48
6.15 Purpose of Loans and Letters of Credit.........................................................48
6.16 Environmental Matters..........................................................................48
6.17 Perfected Security Interests...................................................................49
6.18 Borrower's Obligations.........................................................................49
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................49
7.1 Information Covenants...........................................................................49
7.2 Preservation of Existence and Franchises........................................................52
7.3 Books and Records...............................................................................52
7.4 Compliance with Law.............................................................................53
7.5 Payment of Taxes and Other Indebtedness.........................................................53
7.6 Insurance.......................................................................................53
7.7 Maintenance of Property.........................................................................53
7.8 Performance of Obligations......................................................................54
7.9 Use of Proceeds.................................................................................54
7.10 Audits/Inspections..............................................................................54
7.11 Financial Covenants.............................................................................54
7.12 Additional Credit Parties.......................................................................56
7.13 Ownership of Subsidiaries.......................................................................56
7.14 Pledged Assets..................................................................................56
7.15 Real Property Collateral........................................................................56
7.16 Field Examination...............................................................................57
7.17 Minimum Availability............................................................................57
SECTION 8 NEGATIVE COVENANTS....................................................................................57
8.1 Indebtedness...................................................................................57
8.2 Liens..........................................................................................58
8.3 Nature of Business.............................................................................58
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc.........................................58
8.5 Advances, Investments, Loans, etc..............................................................59
8.6 Restricted Payments............................................................................59
8.7 Prepayments of Indebtedness, etc...............................................................59
8.8 Transactions with Affiliates...................................................................59
8.9 Fiscal Year....................................................................................60
8.10 Limitation on Restrictions on Subsidiary Dividends and Other Distributions,etc.................60
8.11 Issuance and Sale of Subsidiary Stock..........................................................60
8.12 Sale Leasebacks................................................................................60
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8.13 No Further Negative Pledges....................................................................60
8.14 No Foreign Subsidiaries........................................................................61
8.15 Capital Expenditures...........................................................................61
8.16 Consolidated Earn-Outs.........................................................................61
SECTION 9 EVENTS OF DEFAULT.....................................................................................61
9.1. Events of Default..............................................................................61
9.2 Acceleration; Remedies.........................................................................63
SECTION 10 AGENCY PROVISIONS....................................................................................64
10.1 Appointment....................................................................................64
10.2 Delegation of Duties...........................................................................65
10.3 Exculpatory Provisions.........................................................................65
10.4 Reliance on Communications.....................................................................65
10.5 Notice of Default..............................................................................66
10.6 Non-Reliance on Agent and Other Lenders........................................................66
10.7 Indemnification................................................................................66
10.8 Agent in its Individual Capacity...............................................................67
10.9 Successor Agent................................................................................67
SECTION 11 MISCELLANEOUS........................................................................................67
11.1 Notices........................................................................................67
11.2 Right of Set-Off...............................................................................68
11.3 Benefit of Agreement...........................................................................68
11.4 No Waiver; Remedies Cumulative.................................................................70
11.5 Payment of Expenses, etc.......................................................................71
11.6 Amendments, Waivers and Consents...............................................................71
11.7 Counterparts...................................................................................72
11.8 Headings.......................................................................................72
11.9 Survival.......................................................................................72
11.10 Governing Law; Submission to Jurisdiction; Venue...............................................72
11.11 Severability...................................................................................73
11.12 Entirety.......................................................................................73
11.13 Binding Effect; Amendment and Restatement of Original Credit Agreement.........................73
11.14 Confidentiality................................................................................74
11.15 Source of Funds................................................................................74
11.16 Conflict. ..................................................................................75
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SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 1.1C Form of Amended and Restated Pledge Agreement
Schedule 2.1(a) Lenders
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Amended, Restated and Substituted Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.14 Subsidiaries
Schedule 7.1(c)(i) Form of Officer's Compliance Certificate
Schedule 7.1(c)(ii) Form of Officer's Compliance Certificate
Schedule 7.12 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 11.3(b) Form of Assignment and Acceptance
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AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 23, 1997
(the "Credit Agreement"), is by and among PERSONNEL GROUP OF AMERICA, INC., a
Delaware corporation (the "Borrower"), the subsidiaries of the Borrower
identified on the signature pages hereto and such other subsidiaries as may from
time to time become a party hereto (the "Guarantors"), the several lenders
identified on the signature pages hereto and such other lenders as may from time
to time become a party hereto (the "Lenders") and BANK OF AMERICA, N.A.,
formerly NationsBank, N.A., as agent for the Lenders (in such capacity, the
"Agent").
WITNESSETH
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent
entered into that certain Credit Agreement, dated as of September 30, 1996 (as
amended, the "Original Credit Agreement"), as amended by that certain Amendment
No. 1 to Credit Agreement, dated as of December 13, 1996, that certain Amendment
No. 2 to Credit Agreement, dated as of February 28, 1997, that certain Amendment
No. 3 to Credit Agreement, dated as of April 14, 1997, and that certain
Amendment No. 4 to Credit Agreement and Pledge Agreement, dated as of May 19,
1997;
WHEREAS, the parties hereto have agreed to amend and restate the
Original Credit Agreement as set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition Note" means that certain promissory note, dated
as of September 30, 1996, executed by the Borrower to the order of BEST
in the principal amount of $10,950,000, as such promissory note may be
amended, modified, restated or replaced from time to time.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the equity
interest in such Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
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through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agency Services Address" means Bank of America, N.A.,
NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attn: Agency Services, or such other address as may be identified by
written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement,
dated as of May 2, 1997, between the Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(c).
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Loan or the applicable
rate of the Unused Fee for any day for purposes of Section 3.5(a) or
the applicable rate of the Standby Letter of Credit Fee for any day for
purposes of Section 3.5(b)(i), the appropriate applicable percentage
corresponding to the Consolidated Leverage Ratio in effect as of the
most recent Calculation Date:
Pricing Grid for the Period from the Closing Date through March 31, 2001
Applicable
Applicable Percentage for Applicable
Percentage for Standby Letter of Percentage for
Pricing Level Consolidated Leverage Ratio Eurodollar Loans Credit Fee Unused Fee
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
I Less than 1.25:1.00 0.500% 0.500% 0.125%
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
II Greater than or equal to 1.25:1.00, but less 0.750% 0.750% 0.150%
than 2.25:1.00
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
III Greater than or equal to 2.25:1.00, but less 1.000% 1.000% 0.225%
than 3.00:1.00
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
IV Greater than or equal to 3.00:1.00, but less 1.250% 1.250% 0.250%
than 3.50:1.00
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
V Greater than or equal to 3.50:1.00 1.375% 1.375% 0.350%
=================== ================================================ ==================== ==================== =====================
Pricing Grid for April 1, 2001 and Thereafter
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=================== ================================================ ==================== ==================== =====================
Applicable
Applicable Percentage for Applicable
Percentage for Standby Letter of Percentage for
Pricing Level Consolidated Leverage Ratio Eurodollar Loans Credit Fee Unused Fee
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
I Less than or equal to 2.50:1.00 2.000% 2.000% 0.250%
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
II Greater than 2.50:1.00, but less than or equal 2.500% 2.500% 0.375%
to 3.00:1.00
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
III Greater than 3.00:1.00, but less than or equal 2.750% 2.750% 0.500%
to 3.50:1.00
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
IV Greater than 3.50:1.00, but less than or equal 3.000% 3.000% 0.500%
to 4.00:1.00
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
V Greater than 4.00:1.00, but less than or equal 3.250% 3.250% 0.500%
to 4.50:1.00
------------------- ------------------------------------------------ -------------------- -------------------- ---------------------
VI Greater than 4.50:1.00 3.500% 3.500% 0.500%
=================== ================================================ ==================== ==================== =====================
The Applicable Percentages shall be determined and adjusted on the date
(each a "Calculation Date") five Business Days after each date by which
the Borrower is required to provide an officer's certificate in
accordance with the provisions of Section 7.1(c); provided, however,
that (i) the initial Applicable Percentages shall be determined on the
basis of the Consolidated Leverage Ratio existing as of the Closing
Date (as represented in the officer's certificate required to be
delivered in accordance with Section 5.1(i)) and shall remain at the
Pricing Level corresponding thereto until the first Calculation Date
subsequent to the Closing Date and, thereafter, the Pricing Level shall
be determined by the then current Consolidated Leverage Ratio, and (ii)
if the Borrower fails to provide any officer's certificate to the
Agency Services Address as required by Section 7.1(c), the Applicable
Percentage from such Calculation Date shall be based on Pricing Level V
(or, on or after April 1, 2001, Pricing Level VI) until such time as an
appropriate officer's certificate is provided, whereupon the Pricing
Level shall be determined by the then current Consolidated Leverage
Ratio. Each Applicable Percentage shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in the
Applicable Percentages shall be applicable to all existing Loans as
well as any new Loans made or issued.
"Asset Sale" means (i) any sale, lease, transfer or other
disposition (including any such transaction effected by way of merger,
amalgamation or consolidation) by the Borrower or any of its
Subsidiaries subsequent to the date hereof of any asset (including
stock in Subsidiaries of the Borrower), including without limitation
any sale leaseback transaction (whether or not involving a Capital
Lease), but excluding (a) the sale of inventory in the ordinary course
of business for fair consideration, (b) the sale or disposition of
machinery and equipment no longer used or useful in the conduct of such
Person's business, and (c) the sale of any asset having a net book
value of less than $50,000 and (ii) 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 the property or assets
of the Borrower and its Subsidiaries.
"Availability" means, as of any date of determination, (i) the
Committed Amount as of such date minus (ii) the sum of (a) the
aggregate principal amount of outstanding Loans on such date plus (b)
LOC Obligations outstanding as of such date.
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"Bank of America" means Bank of America, N.A. (formerly
NationsBank, N.A.) and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"BEST" means Business Enterprise Systems and Technology, Inc.,
a Washington corporation.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Borrower's Obligations" means, without duplication, (i) all
of the obligations of the Borrower to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under the Credit
Agreement, the Notes or any of the other Credit Documents (including,
but not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to the Borrower, regardless of whether
such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and
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obligations, whenever arising, owing from the Borrower to any Lender,
or any Affiliate of a Lender, arising under any Hedging Agreement.
"Borrowing Base" means, as of any day, an amount equal to a to
be determined percentage of Eligible Receivables plus a to be
determined percentage of Eligible PP&E as set forth in the applicable
Borrowing Base report delivered to the Agent in accordance with Section
7.1(k), it being understood that (i) the foregoing to be determined
percentages and (ii) such additional eligible assets and amounts which
may comprise the Borrowing Base, shall be mutually determined by the
Agent and the Borrower.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina are
authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in
London, England, Charlotte, North Carolina and New York, New York.
"Calculation Date" has the meaning set forth in the definition
of Applicable Percentage.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Cash Equivalents" means (a) 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, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, or (ii) any domestic commercial bank of
recognized standing (y) having capital and surplus in excess of
$500,000,000 and (z) whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least
P-1 or the equivalent thereof (any such bank being an "Approved
Lender"), in each case with maturities of not more than 270 days from
the date of acquisition, (c) commercial paper and variable or fixed
rate notes issued by any Approved Lender (or by the parent company
thereof) and maturing within six months of the date of acquisition, (d)
repurchase agreements entered into by a Person with a bank or trust
company (including any of the Lenders) or 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 in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount
of the repurchase obligations, (e) obligations of any State of the
United States or any political subdivision thereof, the interest with
respect to which is exempt from federal income taxation under Section
103 of the Code, having a long term rating of at least AA- or Aa-3 by
S&P or Moody's, respectively, and maturing within three years from the
date of acquisition thereof, (f) Investments in municipal auction
preferred stock (i) rated AAA (or the equivalent thereof) or better by
S&P or Aaa (or the equivalent thereof) or better by Moody's and (ii)
with dividends that reset at least once every 365 days and (g)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $100,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a), (b), (c), (e) and (f).
"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership, directly or
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indirectly, of, 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 30% or more of the combined voting power of
all Voting Stock of the Borrower, (ii) during any period of up to 24
consecutive months, commencing after the Closing Date, individuals who
at the beginning of such 24 month period were directors of the Borrower
(together with any new director whose election by the Borrower's Board
of Directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the directors of the Borrower then in office or (iii) the
occurrence of a "Change of Control" under and as defined in either the
Subordinated Note Indenture or the Subordinated Notes. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange
Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed also to refer to
any successor sections.
"Collateral" means a collective reference to the collateral
which at any time will be covered by the Collateral Documents.
"Collateral Documents" means a collective reference to the
Security Agreement, the Pledge Agreement and such other documents
executed and delivered in connection with the attachment and perfection
of the Agent's security interests and liens arising thereunder,
including without limitation, UCC financing statements and patent and
trademark filings.
"Commitment" means (i) with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Committed Amount, (A) to make Loans in accordance with the provisions
of Section 2.1(a) and (B) to purchase participation interests in
Letters of Credit in accordance with the provisions of Section 2.2(c)
and (ii) with respect to the Issuing Lender, the LOC Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its 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 11.3.
"Committed Amount" shall have the meaning assigned to such
term in Section 2.1(a).
"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.
"Consolidated Earn-Outs" means, for any period, all earn-out
payments made by the Borrower and its Subsidiaries on a consolidated
basis for such period; provided that, so long as the EBITA (as defined
in the Purchase Agreement) of BEST shall exceed $12,600,000 for the
twelve month period ending on December 31, 1997, Consolidated Earn-Outs
shall exclude the earn-out payment made by the Borrower to BEST
pursuant to Section 3.6(b) of the Purchase Agreement.
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"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) interest expense, (B) total Federal, state, local and
foreign income, value added and similar taxes, (C) depreciation and
amortization expense and (D) with respect to (I) the fiscal quarter of
the Borrower ending December 31, 2000, one-time charges taken by the
Borrower and its Subsidiaries in such quarter (but in no event shall
any add-back pursuant to this clause (D)(I) exceed $16,700,000) and
(II) any fiscal quarter of the Borrower ending subsequent to December
31, 2000, (x) non-cash charges taken by the Borrower and its
Subsidiaries in any such quarter (but in no event shall the aggregate
amount of all add-backs pursuant to this clause (D)(II)(x) for all
fiscal quarters exceed $25,000,000) and (y) cash charges taken by the
Borrower and its Subsidiaries in any such quarter (but in no event
shall the aggregate amount of all add-backs pursuant to this clause
(D)(II)(y) for all fiscal quarters exceed $5,000,000).
"Consolidated Fixed Charge Coverage Ratio" means, as of the
last day of any fiscal quarter, the ratio of (i) Consolidated EBITDA
for the four-quarter period ending on such date minus Consolidated
Capital Expenditures for the four-quarter period ending on such date,
to (ii) Consolidated Interest Expense as determined on such date plus
Consolidated Scheduled Funded Indebtedness Payments as determined on
such date, all as determined in accordance with GAAP.
"Consolidated Funded Indebtedness" means, for any date, (i)
the outstanding principal amount of all Funded Indebtedness, without
duplication, of the Borrower and its Subsidiaries as of such date less
(ii) so long as no Loans are outstanding hereunder, the aggregate
amount of cash and Cash Equivalents held by the Borrower as of such
date.
"Consolidated Interest Coverage Ratio" means, as of the last
day of any fiscal quarter, the ratio of (i) Consolidated EBITDA for the
four-quarter period ending on such date to (ii) Consolidated Interest
Expense as determined on such date.
"Consolidated Interest Expense" means, as of the last day of
any fiscal quarter, interest expense of the Borrower and its
Subsidiaries on a consolidated basis for the four-fiscal quarter period
ending on such day.
"Consolidated Leverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of (i) Consolidated Funded Indebtedness as of
such date to (ii) Consolidated EBITDA for the four-quarter period
ending on such date.
"Consolidated Net Income" means, for any period, (i) net
income after taxes for such period for the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP plus (ii) to the extent not included in the amount determined
pursuant to clause (i) above and as calculated on a pro forma basis,
net income after taxes for such period for any Person acquired by the
Borrower or any of its Subsidiaries during such period (after giving
effect to changes in the operating costs of any acquired Person as if
such changes were in effect for such period and are reasonably expected
to continue).
"Consolidated Net Worth" means, for any date, total
shareholders' equity of the Borrower and its Subsidiaries on a
consolidated basis as of such date, as determined in accordance with
GAAP.
"Consolidated Scheduled Funded Indebtedness Payments" means,
as of the last day of any fiscal quarter, total scheduled payments of
principal on Funded Indebtedness (including without limitation (i)
scheduled payments of principal on the Acquisition Note and (ii) any
scheduled amortization prepayments that will be required pursuant to
Section 3.3(b)(v), assuming for purposes
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hereof that no other mandatory or voluntary prepayments will be made on
the Loans and that all then existing LOC Obligations will remain
outstanding, but excluding (if it would otherwise be included) the
principal amount of the Loans and LOC Obligations that will become due
on the Termination Date) for the Borrower and its Subsidiaries on a
consolidated basis for the four-fiscal quarter period beginning on the
immediately succeeding day. Consolidated Scheduled Funded Indebtedness
Payments shall not include any Consolidated Earn-Outs.
"Consolidated Senior Funded Indebtedness" means, for any date,
(i) the outstanding principal amount of all Consolidated Funded
Indebtedness, without duplication, of the Borrower and its Subsidiaries
as of such date less (ii) the outstanding principal amount of all
Subordinated Indebtedness as of such date.
"Consolidated Senior Leverage Ratio" means, as of the last day
of any fiscal quarter, the ratio of (i) Consolidated Senior Funded
Indebtedness as of such date to (ii) Consolidated EBITDA for the
four-quarter period ending on such date.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, the Collateral Documents, each
Joinder Agreement, the Agent's Fee Letter, and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Debt Issuance" means the issuance of any Indebtedness for
borrowed money (including debt securities) by the Borrower or any of
its Subsidiaries, other than (i) the Loans, (ii) Subordinated
Indebtedness evidencing contingent earn-out payment obligations or
similar obligations and (iii) purchase money Indebtedness permitted
under Section 8.1(c).
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Eligible Receivables" means, as of any date of determination
and without duplication, the aggregate book value of all accounts
receivable, receivables, and obligations for payment created or arising
from the sale of inventory or the rendering of services in the ordinary
course of business (collectively, the "Receivables"), owned by or owing
to the Borrower or any of its Subsidiaries, net of allowances and
reserves for doubtful or uncollectible accounts and sales adjustments
consistent with such Person's internal policies and in any event in
accordance with GAAP, but excluding in any event (i) any Receivable
which is (a) not subject to a perfected, first priority Lien in favor
of the Agent to secure the Borrower's Obligations or (b) subject to any
other Lien that is not a Permitted Lien, (ii) Receivables which are
more than 120 days past the date of invoice (net of reserves for bad
debts in connection with any such receivables), (iii) 50% of the book
value of any Receivable not otherwise excluded by clause (ii) above but
owing from an account debtor which is the account debtor on any
existing Receivable then excluded by such clause (ii), (iv) Receivables
evidenced by notes, chattel paper or other instruments, unless such
notes, chattel paper or instruments have been delivered to and are in
the possession of the Agent, (v) Receivables owing by an account debtor
which is not solvent or is subject to any bankruptcy or insolvency
proceeding of any kind, (vi) Receivables owing by an account debtor
located outside of the United States (unless payment for the goods
shipped is secured by an irrevocable letter of credit in a form and
from an institution acceptable to the Agent), (vii) Receivables which
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23
are contingent or subject to offset, deduction, counterclaim, dispute
or other defense to payment, in each case to the extent of such offset,
deduction, counterclaim, dispute or other defense, (viii) Receivables
for which any direct or indirect Subsidiary or any Affiliate is the
account debtor, (ix) Receivables representing a sale to the government
of the United States of America or any subdivision thereof unless the
Federal Assignment of Claims Act or other similar applicable law has
been complied with to the satisfaction of the Agent with respect to the
granting of a security interest in such Receivable, and (x) Receivables
which fail to meet such other specifications and requirements as may
from time to time be established by the Agent in its reasonable
discretion.
"Eligible PP&E" means, as of any date of determination and
without duplication, the aggregate net book value of all real estate,
machinery and equipment ("PP&E") owned by the Borrower or any of its
Subsidiaries and deemed "Eligible PP&E" by the Agent, but excluding in
any event (i) PP&E which is (a) not subject to a perfected, first
priority Lien in favor of the Agent to secure the Borrower's
Obligations or (b) subject to any Lien other than a Permitted Lien,
(ii) PP&E which is not in good condition or fails to meet standards for
sale or use imposed by governmental agencies, departments or divisions
having regulatory authority over such PP&E, (iii) PP&E which is not
useable or salable at prices approximating its depreciated value in the
ordinary course of the business, (iv) PP&E located outside of the
United States, (v) PP&E located at a location not owned by the Borrower
or any of its Subsidiaries with respect to which the Agent shall not
have received a landlord's, warehousemen's, bailee's or appropriate
waiver satisfactory to the Agent and (vi) PP&E which is leased or on
consignment.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"Equity Transaction" means any issuance by the Borrower or any
of its Subsidiaries to any Person of shares of its capital stock or
other equity interests, any shares of its capital stock or other equity
interests pursuant to the exercise of options or warrants or any shares
of its capital stock or other equity interests pursuant to the
conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Credit Party within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes the Borrower and
which is treated as a single employer under Sections 414(b), (c), (m),
or (o) of the Code.
"Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
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"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
--------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means such term as defined in Section 9.1.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that (A) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day and (B) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Agent on such day
on such transactions as determined by the Agent.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (i) all Indebtedness of such Person for borrowed
money, (ii) all amounts due and owing by such Person under any
contingent earn-out agreements to which such Person is a party, (iii)
all purchase money Indebtedness of such Person, including without
limitation the principal portion of all obligations of such Person
under Capital Leases, (iv) all Guaranty Obligations of such Person with
respect to Funded Indebtedness of another Person, (v) the maximum
available amount of all standby letters of credit or acceptances issued
or created for the account of such Person, (vi) all Funded Indebtedness
of another Person secured by a Lien on any Property of such Person,
whether or not such Funded Indebtedness has been assumed, and (vii) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product to which such Person is a party, where such
transaction is considered borrowed money indebtedness for tax purposes
but is classified as an operating lease in accordance with GAAP. The
Funded Indebtedness of any Person shall include the Funded Indebtedness
of any partnership or joint venture in which such Person is a general
partner or joint venturer.
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"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3 hereof.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of those Persons identified as a
"Guarantor" on the signature pages hereto, and each Additional Credit
Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns.
"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.
"Hedging Agreements" means any interest rate protection
agreement or foreign currency exchange agreement between the Borrower
and any Lender, or any Affiliate of a Lender.
"Indebtedness" of any Person means (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) 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), (iv) 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, (v) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements,
(vi) 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, (vii) all Guaranty
Obligations of such Person (excluding, to the extent entered in the
ordinary course of business, any Guaranty Obligations of the Borrower
with respect to Operating Leases of any Subsidiary of the Borrower),
(viii) the principal portion of all obligations of such Person under
Capital Leases, (ix) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest
or exchange rate or commodity price hedging agreements (including, but
not limited to, the Hedging Agreements), (x) 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), (xi) all
preferred stock issued by such Person and
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required by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due, by a fixed date and (xii) the principal
balance outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product to which such Person is a party, where such transaction is
considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP. The
Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general partner
or a joint venturer.
"Interbank Offered Rate" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
(rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the rate of interest, determined by the Agent on the
basis of the offered rates for deposits in dollars for a period of time
corresponding to such Interest Period (and commencing on the first day
of such Interest Period), appearing on Telerate Page 3750 (or, if, for
any reason, Telerate Page 3750 is not available, the Reuters Screen
LIBO Page) as of approximately 11:00 A.M. (London time) two (2)
Business Days before the first day of such Interest Period. As used
herein, "Telerate Page 3750" means the display designated as page 3750
by Dow Xxxxx Telerate, Inc. (or such other page as may replace such
page on that service for the purpose of displaying the British Bankers
Association London interbank offered rates) and "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Intercompany Indebtedness" means any Indebtedness of a Credit
Party (other than the Borrower) which (i) is owing to the Borrower or
any other Credit Party and (ii) by its terms is specifically
subordinated in right of payment to the prior payment of the
obligations of the Credit Parties under this Credit Agreement and the
other Credit Documents on terms and conditions reasonably satisfactory
to the Required Lenders.
"Interest Payment Date" means (i) as to any Base Rate Loan,
the last day of each March, June, September and December, the date of
repayment of principal of such Loan and the Termination Date and (ii)
as to any Eurodollar Loan, the last day of each Interest Period for
such Loan, the date of repayment of principal of such Loan and on the
Termination Date, and in addition where the applicable Interest Period
is more than 3 months, then also on the date 3 months from the
beginning of the Interest Period, and each 3 months thereafter. If an
Interest Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding
Business Day, except that in the case of Eurodollar Loans where the
next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day.
"Interest Period" means, as to any Eurodollar Loan, a period
of one, two, three or six month's duration, as the Borrower may elect,
commencing in each case, on the date of the borrowing (including
conversions, extensions and renewals); provided, however, (A) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(B) no Interest Period shall extend beyond the Termination Date, and
(c) where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
day of such calendar month.
"Investment", in any Person, means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of, or
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equity interest in, such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any Guaranty Obligation incurred for the benefit of such
Person. In computing the amount involved in any Investment, (i)
undistributed earnings of, and interest accrued in respect of
Indebtedness owing by, any such other Person accrued after the date of
such Investment shall not be included, (ii) there shall not be deducted
from the amounts invested in any such other Person any amounts received
as earnings (in the form of dividends, interest or otherwise) on such
Investment or as loans or advances from such other Person, and (iii)
unrealized increases or decreases in value, or write-ups, write-downs
or write-offs, of Investments in any such other Person shall be
disregarded.
"Issuing Lender" means Bank of America.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(b)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Schedule 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
"Lenders" means each of the Persons identified as a "Lender"
on the signature pages hereto, and each Person which may become a
Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.2.
"LOC Documents" means, 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 at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, 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 of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
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"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any Credit Party to perform any
material obligation under the Credit Documents to which it is a party
or (iii) the material rights and remedies of the Lenders under the
Credit Documents.
"Materials of Environmental Concern" means 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 Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate are contributing sponsors.
"NationsBank Liquidity Line" means that certain $10,000,000
liquidity line provided by NationsBank, N.A. to the Borrower, as
evidenced by that certain promissory note, dated as of June 2, 1997,
executed by the Borrower in favor of NationsBank, N.A., which liquidity
line has been terminated.
"Net Proceeds" means cash proceeds in excess of $500,000
received by the Borrower or any of its Subsidiaries from time to time
in connection with any Asset Sale (including without limitation cash
proceeds received by the Borrower or any of its Subsidiaries from an
escrow account established at the time of the sale of Nursefinders,
Inc. to hold a portion of the proceeds of such sale pending resolution
of certain issues), any Equity Transaction or any Debt Issuance, net of
actual costs (including, without limitation, commissions and
underwriting discounts, if any) and taxes paid by such Person in
connection with and attributable to such Asset Sale, Equity Transaction
or Debt Issuance; provided, however, "Net Proceeds" shall not include
the aggregate cash proceeds received by the Borrower from time to time
in connection with the issuance by the Borrower of any capital stock or
other equity interests pursuant to stock options granted under the
Borrower's 1995 Equity Participation Plan, or any successor plan, or
any shares issued under the Borrower's 1997 Employee Stock Purchase
Plan, or any successor plan.
"Non-Excluded Taxes" means such term as is defined in Section
3.10.
"Note" means a promissory note of the Borrower in favor of a
Lender delivered pursuant to Section 2.1(e) and evidencing the Loans of
such Lender, as such promissory note may be amended, modified, restated
or replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Schedule 3.2, as
required by Section 3.2.
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"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Original Credit Agreement" means such term as defined in the
preamble hereto.
"Participation Interest" means, the extension of credit by a
Lender by way of a purchase of a participation in any Letters of Credit
or LOC Obligations as provided in Section 2.2(c) or in any Loans as
provided in Section 3.13.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made by the Borrower or any of its Subsidiaries in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of stock,
obligations, securities or other property received by the Borrower or
any of its Subsidiaries in settlement of accounts receivable (created
in the ordinary course of business) from insolvent or bankrupt
obligors; (iv) Investments existing as of the Third Amendment Effective
Date and set forth in Schedule 1.1A, (v) Guaranty Obligations permitted
by Section 8.1; (vi) transactions explicitly permitted by clauses (i),
(ii) and (iv) of Section 8.8; (vii) advances or loans to directors,
officers, agents, customers or suppliers that do not exceed $250,000 in
the aggregate at any one time outstanding; (viii) short term advances
or loans to employees in the ordinary course of business for such
employees' ordinary business expenses that do not exceed $2,000,000 in
the aggregate at any one time outstanding (ix) Intercompany
Indebtedness permitted by Section 8.1; (x) Investments resulting from
the settlement of litigation between BEST Consulting, an unincorporated
division of InfoTech Services, Inc., and two of its former senior
officers, the proposed terms of which have been disclosed to the
Lenders; and (xi) other Investments, provided that (a) the aggregate
outstanding amount of all such other Investments taken together shall
not exceed $3,000,000; and (b) should XxxxxxXxxx.xxx, Inc. be released
from its Guaranty Obligations under this Credit Agreement pursuant to
Section 4.8 hereof, Investments in XxxxxxXxxx.xxx, Inc. shall be
Permitted Investments pursuant to this clause (xi) only to the extent
that (1) the aggregate amount of such Investments does not exceed
$1,000,000; and (2) the Borrower has pledged to the Agent, for the
benefit of the Lenders, all of its equity interests in XxxxxxXxxx.xxx,
Inc..
"Permitted Liens" means:
(i) Liens in favor of the Agent on behalf of the
Lenders;
(ii) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers
and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary
course of business, provided that such Liens secure only
amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the same
or are being
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contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on
account thereof);
(iv) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made by the Borrower and its
Subsidiaries in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment
of borrowed money);
(v) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the
judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days
after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or
irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use
of the encumbered Property for its intended purposes;
(vii) Liens on Property securing purchase money
Indebtedness (including Capital Leases) to the extent
permitted under Section 8.1(c), provided that any such Lien
attaches to such Property concurrently with or within 90 days
after the acquisition thereof;
(viii) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions;
(ix) other Liens, provided that the aggregate amount
Indebtedness secured by such Liens shall not exceed an
aggregate principal amount of $1,000,000; and
(x) Liens existing as of the Third Amendment
Effective Date and set forth on Schedule 1.1B.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section 3(5)
of ERISA.
"Pledge Agreement" means the amended and restated pledge and
security agreement dated as of the Closing Date in the form of Schedule
1.1C to be executed in favor of the Agent by each Credit Party which
owns any stock in any Subsidiary of the Borrower.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Bank of America as its prime rate in
effect at its principal office in Charlotte, North Carolina, with each
change in the Prime Rate being effective on the date such change is
publicly announced as effective (it being understood and agreed that
the Prime Rate is a reference rate used by Bank of America
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in determining interest rates on certain loans and is not intended to
be the lowest rate of interest charged on any extension of credit by
Bank of America to any debtor).
"Pro Forma Basis" means, with respect to any Pro Forma
Transaction, that such Pro Forma Transaction shall be deemed to have
occurred as of the first day of the four fiscal-quarter period ending
as of the most recent fiscal quarter end preceding the date of such Pro
Forma Transaction with respect to which the Agent and the Lenders have
received the officer's certificate in accordance with the provisions of
Section 7.1(c)(i). With respect to any incurrence, assumption or
retirement of Indebtedness as referred to in Section 8.1(g), any such
Indebtedness which has a floating or formula rate shall have an implied
rate of interest for the applicable period equal to the rate which is
or would be in effect with respect to such Indebtedness as at the
relevant date of determination.
"Pro Forma Transaction" means any incurrence, assumption or
retirement of Indebtedness as referred to in Section 8.1(g).
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" means that certain asset purchase
agreement, dated as of September 20, 1996, among the Borrower, BEST,
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx XxXxx, Xxx Xxxxxxx and Xxxxxx
XxXxxx, as the same may be amended, modified, restated or replaced from
time to time.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation D, U, or X" means Regulation D, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
post-event notice requirement is waived under subsections .13, .14,
.18, .19, or .20 of PBGC Reg. ss. 2615.
"Required Lenders" means, at any time, Lenders which are then
in compliance with their obligations hereunder (as determined by the
Agent) and holding in the aggregate at least 51% of (i) the Commitments
(and Participation Interests therein) or (ii) if the Commitments have
been terminated, the outstanding Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any
Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of the Borrower or any of its Subsidiaries, now or
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hereafter outstanding, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of the Borrower or any of
its Subsidiaries, now or hereafter outstanding, (iii) 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 stock of the
Borrower or any of its Subsidiaries, now or hereafter outstanding and
(iv) 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 Indebtedness.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Security Agreement" means a security agreement in form and
substance satisfactory to the Agent to be executed in favor of the
Agent by the Borrower and each Subsidiary, as amended, modified,
restated or supplemented from time to time.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or is to engage, (iv) the
fair value of the Property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (v) the present fair saleable value of
the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as
they become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(b)(i).
"Subordinated Indebtedness" means (i) any Indebtedness arising
under the Subordinated Note Documents, (ii) any Indebtedness evidenced
by the Acquisition Note and (iii) any additional Indebtedness
(including contingent earn-outs) incurred by the Borrower or any of its
Subsidiaries which by its terms is specifically subordinated in right
of payment to the prior payment of the obligations of the Credit
Parties under this Credit Agreement and the other Credit Documents on
terms and conditions satisfactory to the Agent.
"Subordinated Note" means any of the 5 3/4% Convertible
Subordinated Notes due 2004 issued by the Borrower in favor of the
Subordinated Noteholders pursuant to the Subordinated Note Indenture,
as such Subordinated Notes may be amended, modified, restated or
supplemented and in effect from time to time.
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"Subordinated Note Documents" means a collective reference to
the Subordinated Note Indenture, the Subordinated Notes and all other
related agreements and documents issued or delivered thereunder or
pursuant thereto.
"Subordinated Note Indenture" means that certain Indenture,
dated as of the Closing Date, by and between the Borrower and First
Union National Bank, as trustee, as the same may be amended, modified,
restated or supplemented and in effect from time to time.
"Subordinated Noteholder" means any of the holders from time
to time of the Subordinated Notes.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than 50%
equity interest at any time.
"Termination Date" means June 23, 2002.
"Termination Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (vi) the complete or partial withdrawal of the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a
Multiemployer Plan.
"Third Amendment" means that certain Amendment No. 3 to
Amended and Restated Credit Agreement dated as of March 21, 2001 by and
among the Borrower, the Guarantors party thereto, the Lenders party
thereto and the Agent.
"Third Amendment Effective Date" means the date on which all
of the conditions precedent to the effectiveness of the Third Amendment
are satisfied by the Credit Parties or waived by the Agent and/or the
Required Lenders, as applicable.
"Trade Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(b)(ii).
"Unused Committed Amount" means, for any period, the amount by
which (a) the then applicable Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal
amount of all Loans plus (ii) the outstanding aggregate principal
amount of all LOC Obligations.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(a).
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"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.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1
hereof (or, prior to the delivery of the first financial statements pursuant to
Section 7.1 hereof, consistent with the financial statements as at December 29,
1996); provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Agent or the Required Lenders shall so object in writing within 30 days
after delivery of such financial statements, then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
SECTION 2
CREDIT FACILITIES
2.1 LOANS.
(a) Commitment. 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 such
Lender's Commitment Percentage of revolving credit loans requested by
the Borrower in Dollars ("Loans") from time to time from the Closing
Date until the Termination Date, or such earlier date as the
Commitments shall have been terminated as provided herein for the
purposes hereinafter set forth; provided, however, that the sum of the
aggregate principal amount of outstanding Loans shall not exceed ONE
HUNDRED EIGHTY MILLION DOLLARS ($180,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided in Section
3.4, the "Committed Amount"); provided, further, (i) with regard to
each Lender individually, such Lender's outstanding Loans shall not
exceed such Lender's Commitment Percentage of the Committed Amount, and
(ii) with regard to the Lenders collectively, the aggregate principal
amount of outstanding Loans plus LOC Obligations outstanding shall not
exceed the Committed Amount. Loans may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the
provisions hereof; provided, however, that no more than 10
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Eurodollar Loans shall be outstanding hereunder at any time. For
purposes hereof, Eurodollar Loans with different Interest Periods shall
be considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of the
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period. Loans hereunder may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall
request a Loan borrowing by written notice (or telephone
notice promptly confirmed in writing) to the Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day prior to the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of
Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Loan is requested,
(B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised of
Base Rate Loans, Eurodollar Loans or a combination thereof,
and if Eurodollar Loans are requested, the Interest Period(s)
therefor. If the Borrower shall fail to specify in any such
Notice of Borrowing (I) an applicable Interest Period in the
case of a Eurodollar Loan, then such notice shall be deemed to
be a request for an Interest Period of one month, or (II) the
type of Loan requested, then such notice shall be deemed to be
a request for a Base Rate Loan hereunder. The Agent shall give
notice to each affected Lender promptly upon receipt of each
Notice of Borrowing pursuant to this Section 2.1(b)(i), the
contents thereof and each such Lender's share of any borrowing
to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or
Base Rate Loan that is a Loan shall be in a minimum aggregate
principal amount of $500,000 and integral multiples of
$100,000 in excess thereof (or the remaining amount of the
Committed Amount, if less).
(iii) Advances. Each Lender will make its
Commitment Percentage of each Loan borrowing available to the
Agent for the account of the Borrower as specified in Section
3.14(a), or in such other manner as the Agent may specify in
writing, by 1:00 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 Agent. Such
borrowing will then be made available to the Borrower by the
Agent by crediting the account of the Borrower on the books of
such office with the aggregate of the amounts made available
to the Agent by the Lenders and in like funds as received by
the Agent.
(c) Repayment. The principal amount of all Loans shall be due
and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as
Loans shall be comprised in whole or in part of Base Rate
Loans, such Base Rate Loans shall bear interest at a per annum
rate equal to the Base Rate;
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(ii) Eurodollar Loans. During such periods as
Loans shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per
annum rate equal to the Eurodollar Rate plus the Applicable
Percentage.
Interest on Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified
herein).
(e) Notes. The Loans made by each Lender shall be evidenced by
a duly executed promissory note of the Borrower to such Lender in an
original principal amount equal to such Lender's Commitment Percentage
of the Committed Amount and in substantially the form of Schedule
2.1(e).
2.2 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, the Lenders will participate
in the issuance by the Issuing Lender from time to time of such Letters
of Credit in Dollars from the Closing Date until the Termination Date
as the Borrower may request, in a form acceptable to the Issuing
Lender; provided, however, that (i) the LOC Obligations outstanding
shall not at any time exceed TEN MILLION DOLLARS ($10,000,000) (the
"LOC Committed Amount") and (ii) the sum of the aggregate principal
amount of outstanding Loans plus LOC Obligations outstanding shall not
at any time exceed the Committed Amount. No Letter of Credit shall (x)
have an original expiry date more than one year from the date of
issuance or (y) as originally issued or as extended, have an expiry
date extending beyond the 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.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
frequently upon request, disseminate to each of 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 the prior report, and including therein,
among other things, the beneficiary, the face amount, expiry date as
well as any payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a risk
participation from the applicable Issuing Lender in such Letter of
Credit and the obligations arising thereunder, in each case in an
amount equal to its pro rata share of the obligations under such Letter
of Credit (based on the respective Commitment Percentages of the
Lenders) 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 pro rata share 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 such Letter of Credit, each such
Lender shall pay to the Issuing Lender its pro rata share 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.
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(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender that
the Borrower intends to otherwise reimburse the Issuing Lender for such
drawing, the Borrower shall be deemed to have requested that the
Lenders make a Loan in the amount of the drawing as provided in
subsection (e) hereof on the related Letter of Credit, the proceeds of
which will be used to satisfy the related reimbursement obligations.
The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Loan
obtained hereunder or otherwise) in same day funds. If the Borrower
shall fail to reimburse the Issuing Lender as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a per annum
rate equal to the Base Rate plus two percent (2%). The Borrower's
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender, the 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 or any
other Credit Party 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 Agent
for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's pro rata share 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 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 that such Lender is required to make payments of such
amount pursuant to the preceding sentence, the Federal Funds Rate and
thereafter at a rate equal to the 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 Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default
or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
Lender to the Issuing Lender, such Lender shall, automatically and
without any further action on the part of the Issuing Lender or such
Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to
the Issuing Lender) in the related unreimbursed drawing portion of the
LOC Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect
thereto.
(e) Repayment with Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Loan advance
to reimburse a drawing under a Letter of Credit, the Agent shall give
notice to the Lenders that a Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing under
a Letter of Credit, in which case a Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with
the procedures of Section 2.1(b)(i) with respect thereto) shall be
immediately made to the Borrower by all Lenders (notwithstanding any
termination of the Commitments pursuant to Section 9.2) pro rata based
on the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to
Section 9.2) and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC
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Obligations. Each such Lender hereby irrevocably agrees to make its pro
rata share of each such Loan immediately upon any such request or
deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such
borrowing may not comply with the minimum amount for advances of Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for Loan to be made by the time otherwise required hereunder,
(v) whether the date of such borrowing is a date on which Loans are
otherwise permitted to be made hereunder or (vi) any termination of the
Commitments relating thereto immediately prior to or contemporaneously
with such borrowing. In the event that any Loan 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 with respect to the Borrower or any Credit Party), then
each such Lender hereby agrees that it shall forthwith purchase (as of
the date such 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 Issuing Lender such participation in the
outstanding LOC Obligations as shall be necessary to cause each such
Lender to share in such LOC Obligations ratably (based upon the
respective Commitment Percentages of the Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section
9.2)), provided that at the time any purchase of participation pursuant
to this sentence is actually made, the purchasing Lender shall be
required to pay to the Issuing Lender, to the extent not paid to the
Issuer by the Borrower in accordance with the terms of subsection (d)
hereof, interest on the principal amount of participation purchased for
each day from and including the day upon which such 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 Loan advance, the Federal Funds Rate, and
thereafter at a rate equal to the Base Rate.
(f) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a) hereof, a Letter
of Credit issued hereunder may contain a statement to the effect that
such Letter of Credit is issued for the account of a Subsidiary of the
Borrower, provided that notwithstanding such statement, the Borrower
shall be the actual account party for all purposes of this Credit
Agreement for such Letter of Credit and such statement shall not affect
the Borrower's reimbursement obligations hereunder with respect to such
Letter of Credit.
(g) Renewal, Extension. The renewal or extension of 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.
(h) Uniform Customs and Practices. The Issuing Lender may 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.
(i) Indemnification; Nature of Issuing Lender's
Duties. (i) In addition to its other obligations under this
Section 2.2, the Borrower hereby agrees to protect, indemnify,
pay and save the 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 (A) the issuance of any
Letter of Credit or (B) 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").
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(ii) 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: (A) 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; (B) 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; (C) 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; (D) 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 (E) 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.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or in
connection with any Letter of Credit or the related
certificates, if taken or omitted without gross negligence or
bad faith, shall not put such Issuing Lender under any
resulting liability to the Borrower or any other Credit Party.
It is the intention of the parties that this Credit 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 (on behalf of itself and each
of the other Credit Parties), including, without limitation,
any and all Government Acts. 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.
(iv) Nothing in this subsection (h) is intended to
limit the reimbursement obligations of the Borrower contained
in subsection (d) above. The obligations of the Borrower under
this subsection (h) shall survive the termination of this
Credit 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 Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (h), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender (A) arising out of
the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction, or
(B) caused by the Issuing Lender's failure to pay under any
Letter of Credit after presentation to it of a request
strictly complying with the terms and conditions of such
Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge
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that any such condition precedent has not been satisfied; provided,
however, that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any Lender to recover from the Issuing Lender
any amounts made available by such Lender to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a
Letter of Credit constituted gross negligence or willful misconduct on
the part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any
letter of credit application), this Credit Agreement shall control.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
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 2% greater than the Base
Rate).
3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another interest
rate type; provided, however, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
shall be in such minimum amounts as provided in Section 2.1(b)(ii), (iv) no more
than 10 Eurodollar Loans shall be outstanding hereunder at any time (it being
understood that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they begin on
the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (v) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephone notice promptly confirmed in writing) to the Agent prior to 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or conversion
shall be irrevocable and shall constitute a representation and warranty by the
Borrower of the matters specified in subsections (ii), (iii), (iv) and (v) of
Section 5.2. In the event the Borrower fails to request extension or conversion
of any Eurodollar Loan in accordance with this Section, or any such conversion
or extension is not permitted or required by this Section, then such
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Eurodollar Loan shall be automatically converted into a Base Rate Loan at the
end of the Interest Period applicable thereto. The Agent shall give each Lender
notice as promptly as practicable of any such proposed extension or conversion
affecting any Loan.
3.3 PREPAYMENTS AND SCHEDULE AMORTIZATION.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time, subject to
Section 3.11, but otherwise without premium or penalty; provided,
however, that (i) Eurodollar Loans may only be prepaid on three
Business Days' prior written notice to the Agent and specifying the
applicable Loans to be prepaid; (ii) any prepayment of Eurodollar Loans
will be subject to Section 3.11; and (iii) each such partial prepayment
of Loans shall be in a minimum principal amount of $500,000. Subject to
the foregoing terms, amounts prepaid under this Section 3.3(a) shall be
applied as the Borrower may elect or, if the Borrower has not so
specified, first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities and (after all Loans have
been repaid) to cash collateralize the LOC Obligations (in a manner
satisfactory to the Agent).
(b) Mandatory Prepayments and Scheduled Amortization.
(i) (A) Committed Amount. If at any time, the
sum of the aggregate principal amount of outstanding
Loans plus LOC Obligations outstanding shall exceed
the Committed Amount, the Borrower promises to prepay
immediately the outstanding principal balance on the
Loans and (after all Loans have been repaid) cash
collateralize the LOC Obligations (in a manner
satisfactory to the Agent) in an amount sufficient to
eliminate such excess (to be applied as set forth in
Section 3.3(c) below). Without limiting the
foregoing, each Credit Party acknowledges and agrees
that the Committed Amount will be automatically
reduced on the dates and in the amounts set forth in
Section 3.4(b), and that a mandatory prepayment will
be required on each such date to the extent necessary
to cause the sum of the aggregate principal amount of
outstanding Loans plus LOC Obligations outstanding
not to exceed the reduced Committed Amount as of such
date.
(B) LOC Committed Amount. If at any time,
the aggregate principal amount of LOC Obligations
shall exceed the LOC Committed Amount, the Borrower
immediately shall cash collateralize the LOC
Obligations (in a manner satisfactory to the Agent)
in an amount sufficient to eliminate such excess.
(C) Minimum Availability. If, on the date
that the Borrower delivers an officer's compliance
certificate pursuant to Section 7.1(c) indicating
that the Consolidated Leverage Ratio as of the last
day of the most recently ended fiscal period is
greater than 4.75:1.00 or any date thereafter until
the Borrower has delivered a new officer's compliance
certificate indicating that the Consolidated Leverage
Ratio as of the last day of the most recently ended
fiscal period is less than or equal to 4.75:1.00,
Availability is not equal to or greater than
$5,000,000, the Borrower promises to prepay
immediately the outstanding principal balance on the
Loans and (after all Loans have been repaid) cash
collateralize the LOC Obligations (in a manner
satisfactory to the Agent) in an amount sufficient to
cause Availability to equal or exceed $5,000,000.
(ii) Asset Sales. Immediately upon the occurrence of
any Asset Sale, the Borrower shall prepay the Loans and (after
all Loans have been repaid) cash collateralize the
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LOC Obligations (in a manner satisfactory to the Agent) in an
amount equal to 100% of the Net Proceeds of the related Asset
Sale (to be applied as set forth in Section 3.3(c) below).
(iii) Equity Transactions. Immediately upon the
occurrence of any Equity Transaction, the Borrower shall
prepay the Loans and (after all Loans have been repaid) cash
collateralize the LOC Obligations (in a manner satisfactory to
the Agent) in an amount equal to 100% of the Net Proceeds of
the related Equity Transaction (to be applied as set forth in
Section 3.3(c) below).
(iv) Debt Issuances. Immediately upon the
consummation of any Debt Issuance, the Borrower shall prepay
the Loans and (after all Loans have been repaid) cash
collateralize the LOC Obligations (in a manner satisfactory to
the Agent) in an amount equal to 100% of the Net Proceeds of
the related Debt Issuance (to be applied as set forth in
Section 3.3(c) below).
(v) Scheduled Amortization. On each date referenced
as a Scheduled Amortization Date in the table set forth below,
the Borrower shall prepay the Loans and (after all Loans have
been repaid) cash collateralize the LOC Obligations (in a
manner satisfactory to the Agent) in an amount equal to the
Scheduled Amortization Amount set forth below corresponding to
the relevant Scheduled Amortization Date (to be applied as set
forth in Section 3.3(c) below):
Scheduled Amortization Scheduled Amortization
Date Amount
---------------------- ----------------------
September 30, 2001 $4,000,000
December 31, 2001 $5,000,000
March 31, 2002 $5,000,000
provided, however, each Scheduled Amortization Amount set forth in the
table above shall be reduced by any other prepayments made by the
Borrower during the fiscal quarter then ending pursuant to Sections
3.3(a) or 3.3(b).
(c) Application of Mandatory Prepayments and Scheduled Amortization.
All amounts required to be paid pursuant to Section 3.3(b) shall be applied as
follows:
(i) with respect to all amounts prepaid pursuant to
Section 3.3(b)(i)(A), to Loans and (after all Loans have been
repaid) to a cash collateral account in respect of LOC
Obligations;
(ii) with respect to all amounts prepaid pursuant to
Section 3.3(b)(i)(B), to a cash collateral account in respect
of LOC Obligations;
(iii) with respect to all amounts prepaid pursuant to
Sections 3.3(b)(ii), 3.3(b)(iv) and 3.3(b)(v) to Loans and
(after all Loans have been repaid) to a cash collateral
account in respect of LOC Obligations (with a corresponding
reduction in the Committed Amount in an amount equal to 100%
of the Net Proceeds of the related Asset Sale or Debt
Issuance, rounded down to the nearest $500,000, or 100% of the
Scheduled Amortization Payment, as applicable; provided,
however, no such corresponding reduction in the Committed
Amount shall be required for any Net Proceeds which constitute
cash proceeds from the Nursefinders, Inc. escrow account); and
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(iv) with respect to all amounts prepaid pursuant to
Section 3.3(b)(iii) to Loans and (after all Loans have been
repaid) to a cash collateral account in respect of LOC
Obligations (with a corresponding reduction in the Committed
Amount in an amount equal to 85% of the Net Proceeds of the
related Equity Transaction, rounded up or down to the nearest
$500,000).
Within the parameters of the applications set forth above, prepayments
shall be applied first to Base Rate Loans and then to Eurodollar Loans
in direct order of Interest Period maturities. All prepayments under
this Section 3.3(b) shall be subject to Section 3.11 and be accompanied
by interest on the principal amount prepaid through the date of
prepayment.
3.4 TERMINATION AND REDUCTION OF COMMITTED AMOUNT.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Committed Amount in whole or in
part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Committed Amount)) upon five
Business Days' prior written notice to the Agent; provided, however, no
such termination or reduction shall be made which would cause the
aggregate principal amount of outstanding Loans plus LOC Obligations
outstanding to exceed the Committed Amount, unless, concurrently with
such termination or reduction, the Loans are repaid to the extent
necessary to eliminate such excess. The Commitments of the Lenders and
the Issuing Lender shall automatically terminate on the Termination
Date. The Agent shall promptly notify each affected Lender of receipt
by the Agent of any notice from the Borrower pursuant to this Section
3.4(a).
(b) Mandatory Reductions. Unless previously reduced to a lower
amount pursuant to Section 3.3(c) or Section 3.4(a), the Committed
Amount shall automatically be reduced on each date referenced as a
Committed Amount Reduction Date in the table set forth below to the new
Committed Amount set forth below corresponding to the relevant
Committed Amount Reduction Date:
Committed Amount New Committed
Reduction Date Amount
------------------ -------------
September 30, 2001 $176,000,000
December 31, 2001 $171,000,000
March 31, 2002 $166,000,000
(c) Termination Date. The Commitments of the Lenders and the
LOC Commitment of the Issuing Lender shall automatically terminate on
the Termination Date.
(d) General. The Borrower shall pay to the Agent for the
account of the Lenders in accordance with the terms of Section 3.5(a),
on the date of each termination or reduction of the Committed Amount,
the Unused Fee accrued through the date of such termination or
reduction on the amount of the Committed Amount so terminated or
reduced.
3.5 FEES.
(a) Unused Fee. In consideration of the Commitments of the
Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "Unused Fee") on the Unused Committed
Amount computed at a per annum rate for each day during the applicable
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Unused Fee Calculation Period (hereinafter defined) at a rate equal to
the Applicable Percentage in effect from time to time. The Unused Fee
commenced to accrue on September 30, 1996 and is due and payable in
arrears on the last business day of each March, June, September and
December (and any date that the Committed Amount is reduced as provided
in Section 3.4(a) and the Termination Date) for the immediately
preceding quarter (or portion thereof) (each such quarter or portion
thereof for which the Unused Fee is payable hereunder being herein
referred to as an "Unused Fee Calculation Period").
(b) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In
consideration of the issuance of standby Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Standby Letter of Credit
Fee") on such Lender's Commitment Percentage of the average
daily maximum amount available to be drawn under each such
standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal
to the Applicable Percentage. The Standby Letter of Credit Fee
will be payable quarterly in arrears on the last Business Day
of each March, June, September and December for the
immediately preceding quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Trade Letter of Credit
Fee") equal to 0.125% on such Lender's Commitment Percentage
of the amount of each drawing under any such trade Letter of
Credit. The Trade Letter of Credit Fee will be payable on each
date of drawing under a trade Letter of Credit.
(iii) Issuing Lender Fees. In addition to the Standby
Letter of Credit Fee payable pursuant to clause (i) above and
the Trade Letter of Credit Fee payable pursuant to clause (ii)
above, the Borrower promises to pay to the Issuing Lender for
its own account without sharing by the other Lenders the
letter of credit fronting and negotiation fees agreed to by
the Borrower and the Issuing Lender from time to time and the
customary charges from time to time of the Issuing Lender with
respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such
Letters of Credit (collectively, the "Issuing Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account, the fees referred to in the Agent's Fee
Letter (collectively, the "Agent's Fees").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate
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such Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.
3.7 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Agent shall give telecopy or telephonic notice
thereof to the Borrower and the Lenders as soon as practicable thereafter. If
such notice is given (a) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans and (b) any Loans
that were to have been converted on the first day of such Interest Period to or
continued as Eurodollar Loans shall be converted to or continued as Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Base Rate Loans to Eurodollar Loans.
3.8 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.11.
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Lender, 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, in each case made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof (except
for (i) Non-Excluded Taxes covered by Section 3.10 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under Section 3.10(b)) and (ii)
changes in taxes measured by or imposed upon the overall net income, or
franchise tax (imposed in lieu of such net income tax), of such Lender
or its applicable lending office, branch, or any affiliate thereof));
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(b) 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 Eurodollar Rate
hereunder; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable,
provided that, in any such case, the Borrower may elect to convert the
Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving the
Agent at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Lender, upon demand, without duplication,
such amounts, if any, as may be required pursuant to Section 3.11. If any Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall provide prompt notice thereof to the Borrower, through the Agent,
certifying (x) that one of the events described in this paragraph (a) has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to the Borrower shall be conclusive and binding on the parties hereto in the
absence of manifest error. This covenant shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.10 TAXES.
(a) Except as provided below in this subsection, all payments
made by the Borrower under this Credit Agreement and any Notes shall be
made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
court, or governmental body, agency or other official, excluding taxes
measured by or imposed upon the overall net income of any Lender or its
applicable lending office, or any branch or affiliate thereof, and all
franchise taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Lender or its applicable lending
office, or any branch or affiliate thereof, in each case imposed in
lieu of net income taxes, imposed: (i) by the jurisdiction under the
laws of which such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from
any amounts payable to the Agent or any Lender hereunder or under any
Notes, (A) the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in
this Credit Agreement and any Notes, provided, however, that the
Borrower
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shall be entitled to deduct and withhold any Non-Excluded Taxes and
shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of
America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as
possible thereafter the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to
the Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in
this subsection shall survive the termination of this Credit Agreement
and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(X) (i) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such
Lender, deliver to the Borrower and the Agent (A) two
(2) duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, certifying that
it is entitled to receive payments under this Credit
Agreement and any Notes without deduction or
withholding of any United States federal income taxes
and (B) an Internal Revenue Service Form W-8 or W-9,
or successor applicable form, as the case may be,
certifying that it is entitled to an exemption from
United States backup withholding tax;
(ii) deliver to the Borrower and the Agent
two (2) further copies of any such form or
certification on or before the date that any such
form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change
in the most recent form previously delivered by it to
the Borrower; and
(iii) obtain such extensions of time for
filing and complete such forms or certifications as
may reasonably be requested by the Borrower or the
Agent; or
(Y) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (i) represent to the Borrower (for the
benefit of the Borrower and the Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (ii) agree to furnish to the Borrower on or
before the date of any payment by the Borrower, with a copy to
the Agent two (2) accurate and complete original signed copies
of Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the date
of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue
Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower and
the Agent two (2) further copies of such form on or before the
date it expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recently provided
form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Agent for filing
and completing such forms), and (iii) agree, to the extent
legally entitled to do so, upon reasonable request by the
Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably
required in order to
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establish the legal entitlement of such Lender to an exemption
from withholding with respect to payments under this Credit
Agreement and any Notes;
unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to it
and such Lender so advises the Borrower and the Agent. Each Person that
shall become a Lender or a participant of a Lender pursuant to
subsection 11.3 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and statements
required pursuant to this subsection, provided that in the case of a
participant of a Lender the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and
statements to the Lender from which the related participation shall
have been purchased.
3.11 INDEMNITY.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto. With
respect to Eurodollar Loans, such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of the applicable Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Eurodollar Loans provided for herein (excluding, however, the
Applicable Percentage included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank Eurodollar market. The covenants of the
Borrower set forth in this Section 3.11 shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.12 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or prepayment of principal
of any Loan or reimbursement obligations arising from drawings under
Letters of Credit, each payment of interest on the Loans or
reimbursement obligations arising from drawings under Letters of
Credit, each payment of Unused Fees, each payment of the Standby Letter
of Credit Fee, each payment of the Trade Letter of Credit Fee, each
reduction of the Committed Amount and each conversion or extension of
any Loan, shall be allocated pro rata among the Lenders in accordance
with the respective principal amounts of their outstanding Loans and
Participation Interests.
(b) Advances. Unless the Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its ratable share of such
borrowing available to the Agent, the Agent may assume that such Lender
is making such amount available to the Agent, and the Agent may, in
reliance upon such assumption, make available
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to the Borrower a corresponding amount. If such amount is not made
available to the Agent by such Lender within the time period specified
therefor hereunder, such Lender shall pay to the Agent, on demand, such
amount with interest thereon at a rate equal to the Federal Funds Rate
for the period until such Lender makes such amount immediately
available to the Agent. A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
3.13 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a participation in such Loans, LOC Obligations
and other obligations in such amounts, and make such other adjustments from time
to time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a participation theretofore sold, return
its share of that benefit (together with its share of any accrued interest
payable with respect thereto) to each Lender whose payment shall have been
rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Loan, LOC Obligations or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Agent shall fail to remit to the Agent or any other Lender
an amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.13 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.13 to share in the benefits of any recovery on such secured claim.
3.14 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Agent in dollars in immediately
available funds, without offset, deduction, counterclaim or withholding
of any kind, at the Agent's office specified in Schedule 2.1(a) not
later than 2:00 P.M. (Charlotte, North Carolina time) on the date when
due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Agent may (but shall
not be obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of the Borrower
maintained with the Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Credit Agreement,
specify to the Agent the Loans, LOC Obligations, Fees, interest or
other amounts payable by the Borrower hereunder to which such payment
is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the Agent
shall distribute such payment to the Lenders in such manner as the
Agent may determine to be appropriate in respect of obligations
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owing by the Borrower hereunder, subject to the terms of Section
3.12(a)). The Agent will distribute such payments to such Lenders, if
any such payment is received prior to 12:00 Noon (Charlotte, North
Carolina time) on a Business Day in like funds as received prior to the
end of such Business Day and otherwise the Agent will distribute such
payment to such Lenders on the next succeeding Business Day. Whenever
any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and Fees for
the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next
following calendar month, then such payment shall instead be made on
the next preceding Business Day. Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 360 days, except
with respect to computation of interest on Base Rate Loans which
(unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(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 Agent or any
Lender on account of the Borrower's 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 Agent in connection with enforcing the
rights of the Lenders under the Credit Documents and any
protective advances made by the 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 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 Borrower's Obligations owing to such
Lender;
FOURTH, to the payment of all of the Borrower's
Obligations consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal
amount of the Borrower's Obligations;
SIXTH, to all other Borrower's 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; and (ii) each of the Lenders shall
receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Loans
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held by such Lender bears to the aggregate then outstanding Loans) of
amounts available to be applied pursuant to clauses "THIRD", "FOURTH",
"FIFTH" and "SIXTH" above.
3.15 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Credit Agreement. Each
Lender will make reasonable efforts to maintain the accuracy of its
account or accounts and to promptly update its account or accounts from
time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c) hereof, and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to
each Lender hereunder and (iii) the amount of any sum received by the
Agent hereunder from or for the account of the Borrower and each
Lender's share thereof. The Agent will make reasonable efforts to
maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.15 (and, if
consistent with the entries of the Agent, subsection (a)) shall be
prima facie evidence of the existence and amounts of the obligations of
the Borrower therein recorded; provided, however, that the failure of
any Lender or the Agent to maintain any such account, such Register or
such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay the Loans made by
such Lender in accordance with the terms hereof.
3.16 MANDATORY ASSIGNMENT.
In the event any Lender delivers to the Borrower any notice in
accordance with Section 3.9, then, provided that no Default or Event of Default
has occurred and is continuing at such time, the Borrower may, at its own
expense (such expense to include any transfer fee payable to the Agent under
Section 11.3(b)), and in its sole discretion require such Lender to transfer and
assign in whole or in part, without recourse (in accordance with and subject to
the terms and conditions of Section 11.3(b)), all or part of its interests,
rights and obligations under this Credit Agreement to any assignee which shall
assume such assigned obligations, provided that (i) such assignee shall be (a)
any Lender or any Affiliate or Subsidiary of a Lender, or (b) any other
commercial bank, financial institution or "accredited investor" (as defined in
Regulation D of the Securities and Exchange Commission) reasonably acceptable to
the Agent and the Required Lenders, (ii) such assignment shall not conflict with
any law, rule or regulation or order of any court or other Governmental
Authority and (iii) the Borrower or such assignee shall have paid to the
assigning Lender in immediately available funds the principal of and interest
accrued to the date of such payment on the Loans made by it hereunder and all
other amounts owed to it hereunder (including, without limitation, any amounts
owing pursuant to Section 3.9).
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SECTION 4
GUARANTY
4.1 THE GUARANTEE.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement and the
Agent as hereinafter provided the prompt payment of the Borrower's Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Borrower's Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Borrower's
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, 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 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).
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 hereof are joint
and several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Borrower's Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Borrower's Obligations for amounts paid under this
Guaranty until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full, all Commitments under the
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Lenders in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Borrower's Obligations shall be extended, or such performance or
compliance shall be waived;
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(ii) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
(iii) the maturity of any of the Borrower's Obligations shall
be accelerated, or any of the Borrower's Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be waived or any other guarantee of any of the Borrower's
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Agent or
any Lender or Lenders as security for any of the Borrower's Obligations
shall fail to attach or be perfected; or
(v) any of the Borrower's Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Borrower's Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Borrower's Obligations is rescinded
or must be otherwise restored by any holder of any of the Borrower's
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen.
Stat.ss.ss.26-7 through 26-9, inclusive. Each Guarantor further agrees that such
Guarantor shall have no right of recourse to security for the Borrower's
Obligations, except through the exercise of the rights of subrogation pursuant
to Section 4.2.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Borrower's Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1
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hereof notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Borrower's Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Borrower's Obligations being deemed to have
become automatically due and payable), the Borrower's Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Guarantors for purposes of said Section 4.1.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (i) "Excess Funding Guarantor" shall mean, in respect of any obligations
arising under the other provisions of this Section 4 (hereafter, the "Guaranteed
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guaranteed Obligations; (ii) "Excess Payment" shall mean, in
respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.6, shall mean, for
any Guarantor, the ratio (expressed as a percentage) of (a) the amount by which
the aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Guarantor hereunder) to (b) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.6 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date).
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Borrower's Obligations whenever arising.
4.8 RELEASE OF XXXXXXXXXX.XXX, INC.
Upon the written request (and at the expense) of the Borrower, the
Agent shall execute a writing releasing, on behalf of the Lenders,
XxxxxxXxxx.Xxx, Inc. from its obligations as a Guarantor hereunder, provided
that on or prior to the effective date of such release the Borrower shall have
delivered to the Agent evidence, satisfactory to the Agent, of (i) the bona fide
sale of all of the assets, or all or a part of the equity, of XxxxxxXxxx.Xxx,
Inc. to an unrelated third party, or (ii) the issuance of equity by
XxxxxxXxxx.xxx, Inc. to an unrelated third party in a bona fide transaction.
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SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) The Agent shall have received original counterparts
of this Credit Agreement executed by each of the parties hereto;
(b) The Agent shall have received an appropriate original
Note for each Lender, executed by the Borrower;
(c) The Agent shall have received original counterparts of the
Pledge Agreement executed by each Credit Party which owns any stock in
any Subsidiary of the Borrower;
(d) The Agent shall have received, in form and substance
satisfactory to the Agent, all stock certificates evidencing the stock
pledged to the Agent pursuant to the Pledge Agreement, together with
duly executed in blank undated stock powers attached thereto;
(e) The Agent shall have received all documents it may
reasonably request relating to the existence and good standing of each
of the Credit Parties, the corporate or other necessary authority for
and the validity of the Credit Documents, and any other matters
relevant thereto, all in form and substance reasonably satisfactory to
the Agent;
(f) (i) The Borrower shall have entered into the Subordinated
Note Indenture (the form and substance of which shall be satisfactory
to the Required Lenders (the satisfaction of any Lender to be evidenced
by its execution of this Credit Agreement), (ii) the Borrower shall
have executed the Subordinated Notes, (iii) the Agent shall have
received a copy, certified by an officer of the Borrower as true and
complete, of the Subordinated Note Indenture and each of the
Subordinated Notes as originally executed and delivered, and no
amendment or modification thereof shall have been entered into on or
prior to the Closing Date which shall not have been approved by the
Required Lenders and (iv) the Borrower shall have sold Subordinated
Notes in an aggregate principal amount of not less than $100,000,000
and received the net proceeds thereof;
(g) The Agent shall have received evidence that (i) the
Borrower shall have used 100% of the net proceeds from the sale of the
Subordinated Notes to (A) terminate the NationsBank Liquidity Line and
repay all amounts owing thereunder in full and (B) repay Loans
outstanding as of the Closing Date and (ii) neither the Borrower nor
any of its Subsidiaries shall have any Funded Indebtedness other than
(A) the Indebtedness under the Credit Documents, (B) the Subordinated
Indebtedness and (C) Indebtedness of the Borrower and its Subsidiaries
set forth on Schedule 8.1;
(h) The absence of any material disruption of, or a
material adverse change in, financial, banking or capital market
conditions;
(i) The Agent shall have received a certificate executed by an
officer of the Borrower as of the Closing Date stating that (i) to the
best of such officer's knowledge, there does not exist any
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action, suit or proceeding, pending or threatened, in which there is a
reasonable possibility of an adverse decision, which would materially
adversely affect the ability of any Credit Party to perform its
obligations under the Credit Documents or the ability of the Lenders to
exercise their rights thereunder; (ii) no material adverse change has
occurred since December 29, 1996, with respect to the consolidated
financial condition of the Borrower and its Subsidiaries; (iii)
attached are detailed calculations of each of the financial covenants
set forth in Section 7.11 immediately after giving effect to this
Credit Agreement, the other Credit Documents, the Subordinated Note
Indenture, the Subordinated Notes and all other transactions
contemplated by this Credit Agreement and the Subordinated Note
Indenture to occur on such date; and (iv) immediately after giving
effect to this Credit Agreement, the other Credit Documents, the
Subordinated Note Indenture, the Subordinated Notes and all other
transactions contemplated by this Credit Agreement and the Subordinated
Note Indenture to occur on such date, (A) each Credit Party on a
consolidated basis is Solvent, (B) no Default or Event of Default
exists and (C) the representations and warranties set forth in Section
6 are true and correct in all material respects;
(j) The Agent shall have received a certificate executed by
the chief financial officer of the Borrower describing all Subordinated
Indebtedness outstanding as of the Closing Date, including, without
limitation, (A) the name and address of the holders thereof or, with
respect to the Subordinated Notes, the trustee for the Subordinated
Noteholders and (B) dates on which scheduled payments are owing with
respect to such Subordinated Indebtedness.
(k) The Agent shall have received, in form and substance
satisfactory to the Agent, a legal opinion of Xxxxxxxx, Xxxxxxxx &
Xxxxxx, P.A., counsel for the Credit Parties, dated as of the Closing
Date;
(l) The Agent shall have received, for its own account and for
the accounts of the Lenders, all fees and expenses required by this
Credit Agreement or any other Credit Document to be paid on or before
the Closing Date; and
(m) The Agent shall have received such other documents,
agreements or information which may be reasonably requested by the
Agent.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extend Letters of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(i) The Borrower shall have delivered (A) in the case of any
Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (B) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance
in accordance with the provisions of Section 2.2(b);
(ii) The representations and warranties set forth in Section 6
shall be, subject to the limitations set forth therein, true and
correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(iii) There shall not have been commenced against the Borrower
or any Guarantor an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver,
liquidator,
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assignee, custodian, trustee, sequestrator (or similar official) of
such Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and such involuntary case or
other case, proceeding or other action shall remain undismissed,
undischarged or unbonded;
(iv) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto; and
(v) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof) or to the issuance of
such Letter of Credit, as the case may be, (A) the sum of the aggregate
principal amount of outstanding Loans plus LOC Obligations outstanding
shall not exceed the Committed Amount, (B) the LOC Obligations shall
not exceed the LOC Committed Amount and (C) if the Consolidated
Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrower exceeded 4.75 : 1.00 as indicated on the most
recently delivered officer's compliance certificate required under
Section 7.1(c), Availability shall be at least $5,000,000.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for the issuance of a Letter of Credit pursuant to Section
2.2(b) shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (ii), (iii), (iv) and (v)
above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated balance sheet of the Borrower and
its Subsidiaries as of December 29, 1996 and the audited consolidated
statements of earnings and statements of cash flows for the years ended
December 29, 1996, December 31, 1995, January 1, 1995 and December 31,
1993 have heretofore been furnished to each Lender. Such financial
statements (including the notes thereto) (i) have been audited by
Xxxxxx Xxxxxxxx LLP, (ii) have been prepared in accordance with GAAP
consistently, applied throughout the periods covered thereby and (iii)
present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries as of
such date and for such periods. The unaudited interim balance sheets of
the Borrower and its Subsidiaries as at the end of, and the related
unaudited interim statements of earnings and of cash flows for, each
quarterly period ended after December 29, 1996 and prior to the Closing
Date have heretofore been furnished to each Lender. Such interim
financial statements for each such quarterly period, (i) have been
prepared in accordance with Regulation S-X of the Securities and
Exchange Commission consistently applied throughout the periods covered
thereby and (ii) present fairly (on the basis disclosed in the
footnotes to such financial statements) the consolidated financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries as of such date and for such periods. During the period
from October 1, 2000 to and including the Third Amendment Effective
Date, there has been no sale, transfer or other disposition by the
Borrower or any of its Subsidiaries of any material part of the
business or property of the Borrower and its Subsidiaries, taken as a
whole, and no purchase or other acquisition by any of them of any
business or property (including any capital stock of any other person)
material in relation to the consolidated financial condition of the
Borrower and its
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Subsidiaries, taken as a whole, in each case, which has not been
disclosed in writing to the Lenders on or prior to the Third Amendment
Effective Date or otherwise publicly disclosed.
(b) The projected consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as at the end of, and the
related projected statements of earnings and of cash flows for, the
years ended December 31, 2000 and December 30, 2001 (heretofore
furnished to each Lender) are based upon reasonable assumptions made
known to the Lenders and upon information not known to be incorrect or
misleading in any material respect (except as otherwise previously
publicly disclosed).
6.2 NO CHANGE; DIVIDENDS.
Since October 1, 2000, (a) there has been no development or event
relating to or affecting the Borrower or any of its Subsidiaries which has had
or would be reasonably expected to have a Material Adverse Effect (except as has
been publicly disclosed) and (b) except as permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the capital stock or other equity interest in the Borrower or any of its
Subsidiaries nor, except to the extent permitted under this Credit Agreement,
has any of the capital stock or other equity interest in the Borrower or any of
its Subsidiaries been redeemed, retired, purchased or otherwise acquired for
value by such Person.
6.3 ORGANIZATION; EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and its Subsidiaries (a) is a corporation duly
organized, validly existing and is in good standing under the laws of the
jurisdiction of its incorporation or organization, (b) has the corporate or
other necessary power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except to the extent that the failure
to have such legal right would not be reasonably expected to have a Material
Adverse Effect, (c) is duly qualified as a foreign entity 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, other than
in such jurisdictions where the failure to be so qualified and in good standing
would not be reasonably expected to have a Material Adverse Effect, and (d) is
in compliance with all material Requirements of Law, except to the extent that
the failure to comply therewith would not, in the aggregate, be reasonably
expected to have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents and Subordinated Note Documents to which it is a party, and in the
case of the Borrower, to borrow hereunder, and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Credit
Agreement and to authorize the execution, delivery and performance of the Credit
Documents and Subordinated Note Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the Indebtedness
arising under the Subordinated Note Documents, the borrowings hereunder or with
the execution, delivery, performance, validity or enforceability of the Credit
Documents and Subordinated Note Documents to which such Credit Party is a party,
except for (i) filings to perfect the Liens created by the Collateral Documents
and (ii) consents, authorizations, notices and filings described in Schedule
6.4, all of which have been obtained or made or have the status described in
such Schedule 6.4. This Credit Agreement has been, and each other Credit
Document and Subordinated Note Document to
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which any Credit Party is a party will be, duly executed and delivered on behalf
of the Credit Parties. This Credit Agreement constitutes and each other Credit
Document and each Subordinated Note Document to which any Credit Party is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of such Credit Party enforceable against such party 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).
6.5 NO LEGAL BAR.
The execution, delivery and performance of the Credit Documents and
Subordinated Note Documents by the Credit Parties, the borrowings hereunder and
the use of the proceeds thereof (a) will not violate any Requirement of Law or
contractual obligation of the Borrower or any of its Subsidiaries in any respect
that would reasonably be expected to have a Material Adverse Effect, (b) will
not result in, or require, the creation or imposition of any Lien (other than
the Liens created by the Collateral Documents) on any of the properties or
revenues of any of the Borrower or any of its Subsidiaries pursuant to any such
Requirement of Law or contractual obligation, and (c) will not violate or
conflict with any provision of any Credit Party's articles of incorporation or
by-laws.
6.6 NO MATERIAL LITIGATION.
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the best knowledge of the Credit
Parties, threatened by or against the Borrower or any of its Subsidiaries or
against any of their respective properties or revenues which (a) relates to any
of the Credit Documents or any of the transactions contemplated hereby or
thereby, (b) relates to any of the Subordinated Note Documents or any of the
transactions contemplated thereby or (c) would be reasonably expected to have a
Material Adverse Effect.
6.7 NO DEFAULT.
Neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any of their contractual obligations in any respect which would
be reasonably expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
6.8 OWNERSHIP OF PROPERTY; LIENS.
Each of the Borrower and its Subsidiaries has good record and
marketable title in fee simple to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold interest in, all
its other material property, and none of such property is subject to any Lien,
except for Permitted Liens.
6.9 INTELLECTUAL PROPERTY.
Each of the Borrower and its Subsidiaries owns, or has the legal right
to use, all United States trademarks, tradenames, copyrights, technology,
know-how and processes, if any, necessary for each of them to conduct its
business as currently conducted (the "Intellectual Property") except for those
the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. No claim has 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 any Credit Party know of any such claim, and 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, would not be reasonably expected to have a Material
Adverse Effect.
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6.10 NO BURDENSOME RESTRICTIONS.
Except as previously disclosed in writing to the Lenders on or prior to
the Closing Date, no Requirement of Law or contractual obligation of the
Borrower or any of its Subsidiaries would be reasonably expected to have a
Material Adverse Effect.
6.11 TAXES.
Each of the Borrower and its Subsidiaries has filed or caused to be
filed all United States federal income tax returns and all other material tax
returns which, to the best knowledge of the Credit Parties, are required to be
filed and has paid (a) all taxes shown to be due and payable on said returns or
(b) all taxes shown to be due and payable on any assessments of which it has
received notice made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any (i) taxes, fees or other charges with respect to which
the failure to pay, in the aggregate, would not have a Material Adverse Effect
or (ii) taxes, fees or other charges the amount or validity of which are
currently being contested and with respect to which reserves in conformity with
GAAP have been provided on the books of such Person), and no tax Lien has been
filed, and, to the best knowledge of the Credit Parties, no claim is being
asserted, with respect to any such tax, fee or other charge.
6.12 ERISA.
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no Termination Event
has occurred, and, to the best knowledge of the Credit Parties, no
event or condition has occurred or exists as a result of which any
Termination Event could reasonably be expected to occur, with respect
to any Plan; (ii) no "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, has occurred with respect to any Plan; (iii) each Plan has
been maintained, operated, and funded in compliance with its own terms
and in material compliance with the provisions of ERISA, the Code, and
any other applicable federal or state laws; and (iv) no lien in favor
of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities"
under all Single Employer Plans (determined within the meaning of
Section 401(a)(2) of the Code, utilizing the actuarial assumptions used
to fund such Plans), whether or not vested, did not, as of the last
annual valuation date prior to the date on which this representation is
made or deemed made, exceed the current value of the assets of all such
Plans.
(c) Neither the Borrower, any of the Subsidiaries of the
Borrower nor any ERISA Affiliate has incurred, or, to the best
knowledge of the Credit Parties, could be reasonably expected to incur,
any withdrawal liability under ERISA to any Multiemployer Plan or
Multiple Employer Plan. Neither the Borrower, any of the Subsidiaries
of the Borrower nor any ERISA Affiliate would become subject to any
withdrawal liability under ERISA if the Borrower, any of the
Subsidiaries of the Borrower or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. Neither the Borrower, any of the
Subsidiaries of the Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning
of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
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(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject the Borrower, any of the Subsidiaries of the Borrower or
any ERISA Affiliate to any liability under Sections 406, 409, 502(i),
or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
or other instrument pursuant to which the Borrower, any of the
Subsidiaries of the Borrower or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability.
6.13 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the proceeds of the Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation G or Regulation U, or
for the purpose of purchasing or carrying or trading in any securities.
If requested by any Lender or the Agent, the Borrower will furnish to
the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said
Regulation U. No indebtedness being reduced or retired out of the
proceeds of the Loans was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of Regulation
T. "Margin stock" within the meanings of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the
Borrower and its Subsidiaries. None of the transactions contemplated by
this Credit Agreement (including, without limitation, the direct or
indirect use of the proceeds of the Loans) will violate or result in a
violation of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or regulations issued pursuant
thereto, or Regulation G, T, U or X.
(b) Neither the Borrower nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act or the Investment Company Act of 1940, each
as amended. In addition, neither the Borrower nor any of its
Subsidiaries is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, and
is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(c) No director, executive officer or principal shareholder of
the Borrower or any of its Subsidiaries is a director, executive
officer or principal shareholder of any Lender. For the purposes hereof
the terms "director", "executive officer" and "principal shareholder"
(when used with reference to any Lender) have the respective meanings
assigned thereto in Regulation O issued by the Board of Governors of
the Federal Reserve System.
(d) Each of the Borrower and its Subsidiaries has obtained all
material licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its respective Property
and to the conduct of its business.
(e) Neither the Borrower nor any of its Subsidiaries is in
violation of any applicable statute, regulation or ordinance of the
United States of America, or of any state, city, town, municipality,
county or any other jurisdiction, or of any agency thereof (including
without limitation, environmental laws and regulations), which
violation could reasonably be expected to have a Material Adverse
Effect.
(f) Each of the Borrower and its Subsidiaries is current with
all material reports and documents, if any, required to be filed with
any state or federal securities commission or similar
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agency and is in full compliance in all material respects with all
applicable rules and regulations of such commissions.
6.14 SUBSIDIARIES.
Schedule 6.14 sets forth all the Subsidiaries of the Borrower at the
Third Amendment Effective Date, the jurisdiction of their incorporation and the
direct or indirect ownership interest of the Borrower therein. All of the
outstanding capital stock of such Subsidiaries has been validly issued, is fully
paid and non-assessable and is owned by the Borrower or one or more of its
Subsidiaries free and clear of all Liens (other than Liens in favor of the
Agent, for the benefit of the Lenders). All of the outstanding capital stock of
the Borrower has been validly issued, is fully paid and non-assessable.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower for working capital and general corporate purposes of the Credit
Parties. 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,
worker's compensation bonds and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
(a) Each of the facilities and properties owned, leased or
operated by the Borrower or any of its Subsidiaries (the "Properties")
and all operations at the Properties are in compliance with all
applicable Environmental Laws, and there is no violation of any
Environmental Law with respect to the Properties or the businesses
operated by the Borrower or any of its Subsidiaries (the "Businesses"),
and there are no conditions relating to the Businesses or Properties
that could give rise to liability under any applicable Environmental
Laws.
(b) None of the Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Properties in amounts or concentrations that constitute or constituted
a violation of, or could give rise to liability under, Environmental
Laws.
(c) Neither the Borrower nor any of its Subsidiaries has
received any written or verbal notice of, or inquiry from any
Governmental Authority regarding, any 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 Businesses, nor does the Borrower or
any of its Subsidiaries have knowledge or reason to believe that any
such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties, or generated, treated,
stored or disposed of at, on or under any of the Properties or any
other location, in each case by or on behalf of the Borrower or any of
its Subsidiaries in violation of, or in a manner that would be
reasonably likely to give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party,
threatened, under any Environmental Law to which the Borrower or any of
its Subsidiaries is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders, administrative orders
or other orders, or other administrative or
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judicial requirements outstanding under any Environmental Law with
respect to the Borrower or any of its Subsidiaries, the Properties or
the Businesses.
(f) 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 (including, without
limitation, disposal) of the Borrower or any of its Subsidiaries in
connection with the Properties or otherwise in connection with the
Businesses, in violation of or in amounts or in a manner that could
give rise to liability under Environmental Laws.
6.17 PERFECTED SECURITY INTERESTS.
Except as the result of or in connection with a disposition permitted
by Section 8.4(c), at all times after execution and delivery of the Collateral
Documents by the Credit Parties and satisfaction of the conditions specified
therein, the security interests created in favor of the Agent, for the benefit
of the Lenders, will constitute valid, perfected security interests in the
Collateral.
6.18 BORROWER'S OBLIGATIONS.
All of the Borrower's Obligations are "Senior Indebtedness" under and
as defined in the Subordinated Note Indenture.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Borrower and its Subsidiaries, a consolidated and consolidating balance
sheet and income statement of the Borrower and its Subsidiaries, as of
the end of such fiscal year, together with related consolidated and
consolidating statements of operations and consolidated statements of
retained earnings and of cash flows for such fiscal year, setting forth
in comparative form consolidated and, if applicable, consolidating
figures for the preceding fiscal year, all such financial information
described above to be in reasonable form and detail and, and with
respect to all such consolidated financial statements, audited by
independent certified public accountants of recognized national
standing reasonably acceptable to the Agent and whose opinion shall be
to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or
qualified as to the status of the Borrower and its Subsidiaries as a
going concern.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Borrower and its Subsidiaries (other than the fourth fiscal
quarter, in which case 90 days after the end thereof) a consolidated
and consolidating balance sheet and income statement of the Borrower
and its Subsidiaries, as of the end of such fiscal quarter,
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together with related consolidated and consolidating statements of
operations and consolidated statements of retained earnings and of cash
flows for such fiscal quarter in each case setting forth in comparative
form consolidated and, if applicable, consolidating figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
the chief financial officer of the Borrower to the effect that such
quarterly financial statements fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries and have
been prepared in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments.
(c) Officer's Certificates.
(i) At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a
certificate of the chief financial officer of the Borrower
substantially in the form of Schedule 7.1(c)(i), (A)
demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end
of each such fiscal period, (B) stating that no Default or
Event of Default exists, or if any Default or Event of Default
does exist, specifying the nature and extent thereof and what
action the Borrower proposes to take with respect thereto and
(C) if the Consolidated Leverage Ratio exceeds 4.75 : 1.00 as
of the end of the relevant fiscal period, demonstrating
Availability of at least $5,000,000 as of the date of such
certificate (and after giving effect to any prepayment made
pursuant to Section 3.3(b)(i)(C)).
(ii) Prior to the consummation of any Pro Forma
Transaction, a certificate of the chief financial officer of
the Borrower in the form of Schedule 7.1(c)(ii), (A)
demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof on a Pro
Forma Basis and (B) stating that, after giving effect on a Pro
Forma Basis to such Pro Forma Transaction, no Default or Event
of Default would exist.
(iii) Within 90 days after the end of each fiscal
year of the Borrower, a certificate of the chief financial
officer of the Borrower containing information regarding the
amount of all Asset Sales and Equity Transactions (other than
the issuance of stock under the Borrower's 1995 Equity
Participation Plan or under the Borrower's 1997 Employee Stock
Purchase Plan) that were made during the prior fiscal year.
(iv) Upon the issuance of any Subordinated
Indebtedness, a certificate of the chief financial officer of
the Borrower describing such Subordinated Indebtedness,
including, without limitation, (A) the name and address of the
holders thereof or, with respect to the Subordinated Notes,
the trustee for the Subordinated Noteholders, (B) dates on
which scheduled payments are owing with respect to such
Subordinated Indebtedness (and the amounts owing on such
dates) and (C) any other information requested by the Agent
with respect to such Subordinated Indebtedness.
(d) Annual Business Plan and Budgets. At least 15 days prior
to the end of each fiscal year of the Borrower, beginning with the
fiscal year ending December 28, 1997, an annual business plan and
budget of the Borrower containing, among other things, pro forma
financial statements for the next fiscal year.
(e) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether,
in the course of
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their audit, they have become aware of any Default or Event of Default
and, if any such Default or Event of Default exists, specifying the
nature and extent thereof.
(f) Auditor's Reports. 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.
(g) Reports. Promptly upon transmission or receipt thereof,
(a) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements, notices and
reports as the Borrower or any of its Subsidiaries shall send to its
shareholders or to a holder of any Indebtedness owed by the Borrower or
any of its Subsidiaries in its capacity as such a holder and (b) upon
the request of the Agent, all reports and written information to and
from the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(h) Notices. Upon obtaining knowledge thereof, the Borrower
will give written notice to the Agent immediately of (a) the occurrence
of an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, and (b) the occurrence of
any of the following with respect to the Borrower or any of its
Subsidiaries (i) the pendency or commencement of any litigation,
arbitral or governmental proceeding against such Person which if
adversely determined is likely to have a Material Adverse Effect, (ii)
the institution of any proceedings against such Person with respect to,
or the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal,
state or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which would likely have a Material
Adverse Effect, or (iii) any notice or determination concerning the
imposition of any withdrawal liability by a Multiemployer Plan against
such Person or any ERISA Affiliate, the determination that a
Multiemployer Plan is, or is expected to be, in reorganization within
the meaning of Title IV of ERISA or the termination of any Plan.
(i) ERISA. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent promptly (and in any event within five
business days) of: (i) of any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, a Termination Event; (ii) with respect to any Multiemployer
Plan, the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against the Borrower or any of its ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which the Borrower,
any of the Subsidiaries of the Borrower or any ERISA Affiliate is
required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding standard set forth in ERISA and
the Code with respect thereto; or (iv) any change in the funding status
of any Plan that could have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice
and a statement by the chief financial officer of the Borrower briefly
setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is proposed
to be taken by the Credit Parties with respect thereto. Promptly upon
request, the Borrower shall furnish the Agent and the Lenders with such
additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of
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Labor and/or the Internal Revenue Service pursuant to ERISA and the
Code, respectively, for each "plan year" (within the meaning of Section
3(39) of ERISA).
(j) Subordinated Indebtedness. Immediately upon obtaining
knowledge thereof, the Borrower will give written notice to each holder
of Subordinated Indebtedness (or, with respect to the Subordinated
Notes, the trustee for the Subordinated Noteholders) of the occurrence
of an event or condition consisting of a Default or Event of Default.
(k) Borrowing Base Report. (i) So long as no Default or Event
of Default has occurred, concurrent with the delivery of information
required pursuant to Section 7.1(b) and, to the extent applicable,
Section 7.1(m), a report, in form satisfactory to the Agent, detailing
the amount and components of the Borrowing Base as of such date (or as
of a recent date acceptable to the Agent); and (ii) after the
occurrence and during the continuation of a Default or an Event of
Default, on such dates as the Agent may request, a report, in form
satisfactory to the Agent, detailing the amount and components of the
Borrowing Base as of such date (or as of a recent date acceptable to
the Agent).
(l) Six Month Forecast. On or before the last day of each
fiscal quarter of the Borrower, commencing with the fiscal quarter
ending March 31, 2001, a monthly cash flow forecast, in form and
substance satisfactory to the Agent, for the six month period
immediately following the fiscal quarter then ending, prepared and
signed by the chief financial officer or the chief accounting officer
of the Borrower, such forecast to be based upon reasonable assumptions
made known to the Lenders and upon information not known to be
incorrect or misleading in any material respect. Such forecast shall
include a demonstration as to the forecasted Availability during such
six month period.
(m) Additional Consolidated EBITDA Information. To the extent
the Borrower chooses to utilize any add-back provided for in clause
(D)(II) in the definition of Consolidated EBITDA, the Borrower must
provide the Agent, at least five days prior to any public announcement
of the charges underlying such add-back(s), with (1) written notice of
the related charges with details and explanations of such charges
satisfactory to the Agent and (2) a monthly cash flow forecast for the
six month period immediately following the month(s) to which such
add-backs relate demonstrating to the satisfaction of the Agent that
Availability will exceed $5,000,000 at all times during such six month
period after giving effect to the related charges.
(n) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of the Borrower or any of its
Subsidiaries as the Agent or the Required Lenders may reasonably
request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4, the Borrower will, and
will cause each of its Subsidiaries to, do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority.
7.3 BOOKS AND RECORDS.
The Borrower will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
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7.4 COMPLIANCE WITH LAW.
The Borrower 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 would
have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Except as otherwise provided pursuant to the terms of the definition of
"Permitted Liens" set forth in Section 1.1, the Borrower will, and will cause
each of its Subsidiaries to, pay and discharge (i) all taxes, assessments and
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its properties, before they shall become delinquent, (ii) all
lawful claims (including claims for labor, materials and supplies) which, if
unpaid, might give rise to a Lien upon any of its properties, and (iii) except
as prohibited hereunder, all of its other Indebtedness as it shall become due.
7.6 INSURANCE.
The Borrower will maintain, and will cause each of its Subsidiaries to
maintain, or be covered under, (i) physical damage insurance on all real and
personal property on an all risks basis (including the perils of flood and
quake), covering the repair and replacement cost of all such property and
consequential loss coverage for extra expense and (ii) public liability
insurance (including products/completed operations liability coverage), all on
terms and conditions and in scope substantially commensurate with that which is
currently maintained (or, if such terms and conditions and scope are not up to
industry standards for a company of like size and with a similar business,
substantially commensurate with such industry standards) and evidenced by the
certificate contemplated by clause (w) of the second following sentence and with
risk retention thereunder up to an amount which in the good faith business
judgement of the Borrower's or such Subsidiary's management could not reasonably
be expected to expose the Borrower or such Subsidiary to a materially adverse
noninsured loss. On or before May 15, 2001, and at all times thereafter, the
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. All such insurance shall be provided by insurers
having an A.M. Best policyholders rating of not less than B+ or such other
insurers as the Required Lenders may approve in writing. The Borrower will
deliver to the Agent for distribution to each of the Lenders (w) on or before
May 15, 2001, a certificate as of a recent date showing the amount of coverage
as of such date, (x) upon request of any Lender through the Agent from time to
time full information as to the insurance carried, (y) within seven Business
Days of receipt of notice from any insurer a copy of any notice of cancellation,
alteration or material change in coverage from that existing on the Third
Amendment Effective Date and (z) forthwith upon receipt thereof, notice of any
cancellation or nonrenewal of coverage by the Borrower or any of its
Subsidiaries.
7.7 MAINTENANCE OF PROPERTY.
The Borrower will, and will cause each of its Subsidiaries to, maintain
and preserve its properties and equipment material to the conduct of its
business in good repair, working order and condition, normal wear and tear and
casualty and condemnation excepted, and will make, or cause to be made, in such
properties and equipment from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper, to the extent and in the manner customary for companies in similar
businesses.
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7.8 PERFORMANCE OF OBLIGATIONS.
The Borrower will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
7.10 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, the Borrower
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person.
7.11 FINANCIAL COVENANTS.
(a) Consolidated Net Worth. Consolidated Net Worth at all
times on and after the last day of the third fiscal quarter in fiscal
year 1999 (the "Net Worth Test Commencement Date") shall be no less
than $325,000,000, as (i) increased on a cumulative basis by (A) as of
the last day of each fiscal quarter (commencing with the first of such
dates to occur after the Net Worth Test Commencement Date, an amount
equal to 50% of Consolidated Net Income (without deduction for any
losses) for the fiscal quarter then ended, (B) as of the date of any
Equity Transaction consummated on or after the Net Worth Test
Commencement Date, 100% of the Net Proceeds of such Equity Transaction
and (C) as of the date of any conversion of Subordinated Notes into
stock of the Borrower on or after the Net Worth Test Commencement Date,
an amount equal to the aggregate principal amount of Subordinated Notes
so converted, and (ii) decreased on a cumulative basis, as of the date
the Borrower determines it will take any such charges, by an amount
equal to 100% of any charges taken by the Borrower and added back to
Consolidated Net Income pursuant to Section (ii)(D)(II) of the
definition of Consolidated EBITDA.
(b) Consolidated Leverage Ratio. The Consolidated
Leverage Ratio as of the last day of each fiscal quarter shall be no
greater than the ratio shown below opposite the applicable period
corresponding thereto:
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Period Ratio
------ -----
Closing Date through September 27, 1998 4.25 : 1.00
September 28, 1998 through December 31, 2000 4.00 : 1.00
January 1, 2001 through April 1, 2001 4.50 : 1.00
April 2, 2001 through July 1, 2001 4.75 : 1.00
July 2, 2001 and thereafter 5.00 : 1.00
(c) Consolidated Senior Leverage Ratio. The Consolidated
Senior Leverage Ratio as of the last day of each fiscal quarter shall
be no greater than the ratio shown below opposite the applicable period
corresponding thereto:
Period Ratio
------ -----
Closing Date through April 1, 2001 2.50 : 1.00
April 2, 2001 through July 1, 2001 2.75 : 1.00
July 2, 2001 through December 30, 2001 2.85 : 1.00
December 31, 2001 and thereafter 2.75 : 1.00
(d) Consolidated Fixed Charge Coverage Ratio. The Consolidated
Fixed Charge Coverage Ratio as of the last day of each fiscal quarter
shall be no less than the ratio shown below opposite the applicable
period corresponding thereto:
Period Ratio
------ -----
Closing Date through December 31, 2000 1.25 : 1.00
January 1, 2001 through April 1, 2001 1.50 : 1.00
April 2, 2001 through September 30, 2001 1.35 : 1.00
October 1, 2001 and thereafter 1.50 : 1.00
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(e) Consolidated Interest Coverage Ratio. The
Consolidated Interest Coverage Ratio as of the last day of each fiscal
quarter shall be no less than the ratio shown below opposite the
applicable period corresponding thereto:
Period Ratio
------ -----
Closing Date through December 31, 2000 3.25 : 1.00
January 1, 2001 through April 1, 2001 2.85 : 1.00
April 2, 2001 through July 1, 2001 2.50 : 1.00
July 2, 2001 through September 30, 2001 2.25 : 1.00
October 1, 2001 and thereafter 2.20 : 1.00
7.12 ADDITIONAL CREDIT PARTIES.
At the time that any Person becomes a Subsidiary of the Borrower, the
Borrower shall so notify the Agent and shall (a) cause such Person to execute a
Joinder Agreement in substantially the form of Schedule 7.12, (b) cause 100% of
the capital stock of such Person to be delivered to the Agent (together with
undated stock powers signed in blank) and pledged to the Agent, for the benefit
of the Lenders, pursuant to an appropriate pledge agreement(s) in substantially
the form of the Pledge Agreement and otherwise in form acceptable to the Agent
and (c) deliver such other documentation as the Agent may reasonably request in
connection with the foregoing, including, without limitation, certified
resolutions and other organizational and authorizing documents of such Person,
appropriate UCC-1 financing statements and favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above), all in form,
content and scope reasonably satisfactory to the Agent.
7.13 OWNERSHIP OF SUBSIDIARIES.
Except to the extent otherwise provided in Section 8.11, the Borrower
shall, directly or indirectly, own at all times 100% of the capital stock of
each of its Subsidiaries; provided, however, the provisions of this Section 7.13
shall not apply to the Borrower's ownership of XxxxxxXxxx.xxx, Inc.
7.14 PLEDGED ASSETS.
On or before the Third Amendment Effective Date, or such later date as
the Agent may reasonably determine, not to exceed thirty (30) days from the
Third Amendment Effective Date, the Borrower will cause, and will cause each
Subsidiary to cause, all of its owned personal property located in the United
States to the extent such property is deemed to be material by the Agent or the
Required Lenders in its or their reasonable discretion, to be subject at all
times, except as otherwise set forth in Section 8.4(c), to first priority,
perfected Liens in favor of the Agent to secure the Borrower's Obligations in
accordance with the terms and conditions of the Collateral Documents, subject in
any case to Permitted Liens.
7.15 INTENTIONALLY OMITTED.
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7.16 FIELD EXAMINATION.
The Borrower and each of its Subsidiaries shall permit the Agent (or a
third party satisfactory to the Agent) to conduct a written business audit of
the accounts receivable, inventory, payables, controls and systems of the
Borrower and its Subsidiaries at a frequency to be determined in the reasonable
discretion of the Agent.
7.17 MINIMUM AVAILABILITY.
The Borrower and each of its Subsidiaries shall cause Availability to
be at least $5,000,000 at all times following the last day of a fiscal quarter
of the Borrower as of which the Consolidated Leverage Ratio exceeds 4.75: 1.00
until the last day of a fiscal quarter of the Borrower as of which the
Consolidated Leverage Ratio is less than or equal to 4.75 : 1.00.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower and any of its Subsidiaries
set forth in Schedule 8.1;
(c) purchase money Indebtedness (including Capital Leases)
hereafter incurred by the Borrower or any of its Subsidiaries to
finance the purchase of fixed assets provided that (i) the total of all
such Indebtedness (for all such Persons taken together) shall not
exceed an aggregate principal amount of $3,000,000 at any one time
outstanding (including any such Indebtedness referred to in subsection
(b) above (other than any such Indebtedness incurred in connection with
acquisitions)); (ii) such Indebtedness when incurred shall not exceed
the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing;
(d) obligations of the Borrower in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) Intercompany Indebtedness incurred in the ordinary course
of business and consistent with past practices or for cash management
purposes;
(f) Subordinated Indebtedness; and
(g) in addition to the Indebtedness otherwise permitted by
this Section 8.1, other Indebtedness hereafter incurred by the Borrower
or any of its Subsidiaries provided that (i) the loan
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documentation with respect to such Indebtedness shall not contain
covenants or default provisions relating to the Borrower and its
Subsidiaries that are more restrictive than the covenants and default
provisions contained in the Credit Documents, (ii) on the date of
incurrence of such Indebtedness after giving effect on a Pro Forma
Basis to the incurrence of such Indebtedness of the Borrower or any of
its Subsidiaries, no Default or Event of Default would exist hereunder,
and (iii) the aggregate principal amount of such Indebtedness shall not
exceed $10,000,000 at any time.
8.2 LIENS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of their Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 NATURE OF BUSINESS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
substantively alter the character or conduct of the business conducted by such
Person as of the Third Amendment Effective Date.
8.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
The Borrower will not, nor will it permit any of its Subsidiaries to:
(a) except in connection with a disposition of assets
permitted by the terms of subsection (c) below, dissolve, liquidate or
wind up their affairs;
(b) enter into any transaction of merger or consolidation;
provided, however, that, (i) so long as no Default or Event of Default
would be directly or indirectly caused as a result thereof, any Credit
Party (other than the Borrower) may merge or consolidate with any other
Credit Party (other than the Borrower) (ii) so long as the Borrower is
the continuing or surviving corporation, Xxxxxx Staffing Services, Inc.
may merge or consolidate with the Borrower and (iii) this Section
8.4(b) shall not be applicable to XxxxxxXxxx.xxx, Inc.;
(c) sell, lease, transfer or otherwise dispose of any Property
of the Borrower and its Subsidiaries other than (i) the sale or
disposition of machinery and equipment no longer used or useful in the
conduct of such Person's business, (ii) other sales of assets (but not
accounts receivable, except delinquent accounts sold for collection
purposes only), provided that, after giving effect to such sale or
other disposition, the aggregate book value of assets sold or otherwise
disposed of pursuant to this clause (ii) does not exceed $500,000 in
any fiscal year, (iii) the grant of any option or other right to
purchase any asset in a transaction that would be permitted under the
provisions of the foregoing clause (ii), provided that no Default or
Event of Default has occurred and is continuing at the time of such
grant and (iv) the sale or disposition of (A) all or a part of the
stock or assets of XxxxxxXxxx.xxx, Inc. in a transaction the terms of
which shall have been previously disclosed in writing to the Agent, (B)
an intangible asset (excepting any trademarks or tradenames of any
Credit Party) or (C) other assets with an aggregate book value not in
excess of $5,000,000, in each case in order to realize a book loss;
(d) acquire all or any portion of the capital stock or
securities of any other Person or purchase, lease or otherwise acquire
(in a single transaction or a series of related transactions) all or
any portion of the Property of any other Person, except for any merger
or consolidation permitted pursuant to Section 8.4(b); or
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(e) become a general partner in any general or limited
partnership, joint venture or similar arrangement; provided, however,
this Section 8.4(e) shall not prohibit the parent of XxxxxxXxxx.xxx,
Inc. from becoming a joint venturer with any third party in connection
with an equity issuance by XxxxxxXxxx.xxx, Inc. or the sale of equity
interests in Xxxxxxxxxx.xxx, Inc.
Upon a sale of any Property of a Credit Party permitted by Section 8.4(c), the
Agent shall (to the extent applicable) deliver to the Credit Parties, upon the
Credit Parties' request and at the Credit Parties' expense, such documentation
as is reasonably necessary to evidence the release of the Agent's security
interest, if any, in such Property, including, without limitation, amendments or
terminations of UCC financing statements, if any, the return of stock
certificates, if any, and the release of such Credit Party from all of its
obligations, if any, under the Credit Documents.
8.5 ADVANCES, INVESTMENTS, LOANS, ETC.
The Borrower will not, nor will it permit any of its Subsidiaries to,
make Investments in or to any Person, except for Permitted Investments.
8.6 RESTRICTED PAYMENTS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
directly or indirectly declare, order, make or set apart any sum for or pay any
Restricted Payment, except (i) to make dividends payable solely in the same
class of capital stock of such Person, (ii) to make dividends or other
distributions payable to the Borrower (directly or indirectly through
Subsidiaries of the Borrower), (iii) as permitted by Section 8.7, (iv) to make
payments on Subordinated Indebtedness (other than Indebtedness arising under the
Subordinated Note Documents) in accordance with any subordination provisions
applicable thereto, and (v) provided that 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, to make regularly scheduled interest payments in
respect of Indebtedness arising under the Subordinated Note Documents. The
provisions of this Section 8.6 shall not apply to XxxxxxXxxx.xxx, Inc. once it
has been released from its guaranty obligations hereunder.
8.7 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Borrower will not, nor will it permit any of its Subsidiaries to,
(i) after the issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any other Indebtedness (including without
limitation any Subordinated Indebtedness) if such amendment or modification
would add or change any terms in a manner materially 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,
or (ii) (A) make (or give any notice with respect thereto) any voluntary or
optional payment or prepayment, redemption, acquisition for value or defeasance
of (including without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
refund, refinance or exchange of any other Funded Indebtedness (including
without limitation any Subordinated Indebtedness) or (B) amend, modify or change
its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document) where such change
would have a Material Adverse Effect.
8.8 TRANSACTIONS WITH AFFILIATES.
The Borrower will not, nor will it permit any of its Subsidiaries to,
enter into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (i) advances of working capital to any Credit Party, (ii) transfers of cash
and assets to any Credit Party, (iii) transactions permitted by Section 8.1,
Section 8.4, Section 8.5 (other than pursuant to clause
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(vii) of the definition of "Permitted Investments" set forth in Section 1.1), or
Section 8.6, (iv) normal compensation and reimbursement of expenses of officers
and directors and (v) except as otherwise specifically limited in this Credit
Agreement, other transactions which are entered into in the ordinary course of
such Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length transaction
with a Person other than an officer, director, shareholder, Subsidiary or
Affiliate.
8.9 FISCAL YEAR.
The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year.
8.10 LIMITATION ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND OTHER
DISTRIBUTIONS, ETC.
The Borrower will not, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Person to (i) pay dividends or make any
other distribution on any of such Person's capital stock, (ii) subject to
subordination provisions under any Intercompany Indebtedness, pay any
Indebtedness owed to the Borrower or any other Credit Party, (iii) make loans or
advances to any other Credit Party or (iv) transfer any of its Property to any
other Credit Party, except for encumbrances or restrictions existing under or by
reason of (A) customary non-assignment provisions in any lease governing a
leasehold interest and (B) this Credit Agreement and the other Credit Documents.
The provisions of this Section 8.10 shall not apply to XxxxxxXxxx.xxx, Inc. once
it has been released from its guaranty obligations hereunder.
8.11 ISSUANCE AND SALE OF SUBSIDIARY STOCK.
The Borrower will not, nor will it permit any of its Subsidiaries to,
except as otherwise permitted under the terms of Section 8.4(c), sell, transfer
or otherwise dispose of, any shares of capital stock of any of its Subsidiaries
or permit any of its Subsidiaries to issue, sell or otherwise dispose of, any
shares of capital stock of any of its Subsidiaries; provided, however, the
provisions of this Section 8.11 shall not apply to XxxxxxXxxx.xxx, Inc.
8.12 SALE LEASEBACKS.
Except to the extent it complies with the mandatory prepayment
provisions for Asset Sales pursuant to Section 3.3, the Borrower will not, nor
will it permit any of its Subsidiaries 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 or personal or mixed), whether now owned or hereafter acquired, (i) which
such Person has sold or transferred or is to sell or transfer to any other
Person other than a Credit Party or (ii) which such Person intends to use for
substantially the same purpose as any other Property which has been sold or is
to be sold or transferred by such Person to any other Person in connection with
such lease.
8.13 NO FURTHER NEGATIVE PLEDGES.
Except (a) pursuant to this Credit Agreement and the other Credit
Documents and (b) with respect to prohibitions against other encumbrances on
specific Property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby) the Borrower will not,
nor will it permit any of its Subsidiaries to, enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
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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.
8.14 NO FOREIGN SUBSIDIARIES.
Neither the Borrower nor any of its Subsidiaries will create, acquire
or permit to exist any direct or indirect Subsidiary of such Credit Party which
is not incorporated or organized under the laws of any State of the United
States or the District of Columbia.
8.15 CAPITAL EXPENDITURES.
Neither the Borrower nor any of its Subsidiaries will permit
Consolidated Capital Expenditures in any fiscal quarter to exceed the dollar
amount (with no carry over from the preceding fiscal quarter) set forth below
opposite the relevant fiscal quarter set forth below:
Fiscal Quarter Ending Capital Expenditure Limit
--------------------- -------------------------
April 1, 2001 $3,000,000
July 1, 2001 $2,500,000
September 30, 2001 $2,500,000
December 30, 2001 $2,500,000
March 31, 2002 $2,500,000
June 30, 2002 $2,500,000
8.16 CONSOLIDATED EARN-OUTS.
Neither the Borrower nor any of its Subsidiaries will permit
Consolidated Earn-Outs made on and after January 1, 2001 to exceed $15,000,000.
SECTION 9
EVENTS OF DEFAULT
9.1 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) Payment. Any Credit Party shall
(i) default in the payment when due of any principal
of any of the Loans or of any reimbursement obligations
arising from drawings under Letters of Credit, or
(ii) default, and such defaults shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees
or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or
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certificate delivered or required to be delivered pursuant hereto or
thereto shall prove untrue in any material respect on the date as of
which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.9, 7.11, 7.12 or 8.1 through 8.14, inclusive, or
(ii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this Section
9.1) contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a responsible officer of a Credit Party becoming
aware of such default or notice thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents (subject to applicable grace or
cure periods, if any), or (ii) except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, any Credit Document shall fail to be in full force
and effect or to give the Agent and/or the Lenders the Liens, rights,
powers and privileges purported to be created thereby, or any Credit
Party shall state any of the foregoing in writing; or
(e) Guaranties. Except as the result of or in connection with
a dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4, the guaranty given by any Guarantor hereunder (including
any Additional Credit Party) or any material provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on behalf
of such Guarantor shall deny or disaffirm such Guarantor's obligations
under such guaranty, or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to the Borrower or any of its Subsidiaries; or
(g) Defaults under Other Agreements.
(i) The Borrower or any of its Subsidiaries shall
default in the performance or observance (beyond the
applicable grace period with respect thereto, if any) or any
material obligation or condition of any contract or lease
material to the Borrower and its Subsidiaries taken as a
whole; or
(ii) With respect to the Acquisition Note or any
other Indebtedness (other than Indebtedness outstanding under
this Credit Agreement) in excess of $1,500,000 in the
aggregate for the Borrower and its Subsidiaries taken as a
whole, (A) the Borrower or any of its Subsidiaries shall (1)
default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such
Indebtedness, or (2) the occurrence and continuance of a
default in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee
or agent on behalf of such holders) to cause (determined
without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its
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stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a
liability of $2,500,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such
event or condition could be expected to involve possible taxes,
penalties, and other liabilities in an aggregate amount in excess of
$1,000,000: (1) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate in favor of the PBGC or a Plan; (2) a Termination
Event shall occur with respect to a Single Employer Plan, which is, in
the reasonable opinion of the Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (3) a
Termination Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Agent, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency or (within the meaning
of Section 4245 of ERISA) such Plan; or (4) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) or breach of fiduciary responsibility shall occur which may
subject the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l)
of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate has agreed or is required to indemnify
any person against any such liability; or
(j) Nature of Business. The Borrower shall engage in any
business, activity or operations other than owning and holding the
capital stock of its Subsidiaries and such business activities
incidental or related thereto (including acting as Borrower hereunder
and pledging its assets to the Agent, for the benefit of the Lenders,
pursuant to the Collateral Documents); or
(k) Subordinated Note Indentures. (i) There shall occur and be
continuing any Event of Default or Repurchase Event under and, in each
case, as defined in the Subordinated Note Indenture or (ii) any of the
Borrower's Obligations for any reason shall cease to be "Senior
Indebtedness" under and as defined in the Subordinated Note Indenture;
or
(l) Collateral. Any of the Borrower's Obligations for any
reason shall fail to be secured under the Collateral Documents; or
(m) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the Required Lenders
or cured to the satisfaction of the Required Lenders (pursuant to the voting
procedures in Section 11.6), the Agent shall, upon the request and direction of
the Required Lenders, by written notice to the Credit Parties take any of the
following actions:
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(i) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(ii) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by the Borrower
to the Agent and/or any of the Lenders hereunder to be due whereupon
the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower.
(iii) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(iv) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations arising from drawings under Letters
of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees
and other indebtedness or obligations owing to the Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable without
the giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
Each Lender hereby designates and appoints Bank of America, N.A. as
administrative agent and as collateral agent (in such capacity as Agent
hereunder, the "Agent") of such Lender to act as specified herein and the other
Credit Documents, and each such Lender hereby authorizes the Agent as the agent
for such Lender, to take such action on its behalf under the provisions of this
Credit Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated by the terms hereof and of the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
herein and in the other Credit Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and none of the Credit Parties shall have any rights
as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit Documents,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed
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to have assumed any obligation or relationship of agency or trust with or for
any Credit Party or any of their respective Affiliates.
10.2 DELEGATION OF DUTIES.
The Agent may execute any of their respective duties hereunder or under
the other Credit Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS.
The Agent and its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall not be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (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 any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, document,
financial statement or other written or oral statement referred to or provided
for in, or received by the Agent under or in connection herewith or in
connection with the other Credit Documents, or enforceability or sufficiency
therefor of any of the other Credit Documents, or for any failure of any Credit
Party to perform its obligations hereunder or thereunder. The Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by the Borrower or any Credit Party
in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agent to the Lenders or by or on behalf of
the Credit Parties to the Agent or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or of the
existence or possible existence of any Default or Event of Default or to inspect
the properties, books or records of the Credit Parties or any of their
respective Affiliates.
10.4 RELIANCE ON COMMUNICATIONS.
The 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 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 any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Lenders as the owner of their respective interests hereunder for
all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent in accordance with Section 11.3(b)
hereof. The Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
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 Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or under any of the other Credit Documents in accordance with a request of the
Required Lenders (or to the extent specifically provided in Section 11.6, all
the Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).
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10.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that each of the Agent and its
officers, directors, employees, agents, attorneys-in-fact or affiliates has not
made any representations or warranties to it and that no act by the Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of any
Credit Party or any of their respective Affiliates, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the 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, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower, the other Credit Parties or
their respective Affiliates and made its own decision to make its Loans
hereunder and enter into this Credit Agreement. Each Lender also represents that
it will, independently and without reliance upon the 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 Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower, the other Credit Parties and their respective
Affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Borrower, the other
Credit Parties or any of their respective Affiliates which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7 INDEMNIFICATION.
The Lenders agree to indemnify the Agent in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably according to their respective Commitments (or if
the Commitments have expired or been terminated, in accordance with the
respective principal amounts of outstanding Loans and Participation Interests of
the Lenders), 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 final payment of all of the obligations of the Borrower
hereunder and under the other Credit Documents) be imposed on, incurred by or
asserted against the Agent in its capacity as such in any way relating to or
arising out of this Credit Agreement or the other Credit Documents 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 Agent under
or in connection with any of the foregoing; provided 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
resulting from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The
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agreements in this Section shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
10.8 AGENT IN ITS INDIVIDUAL CAPACITY.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
or their respective Affiliates as though the Agent were not the Agent hereunder.
With respect to the Loans made by and all obligations of the Borrower hereunder
and under the other Credit Documents, the Agent shall have the same rights and
powers under this Credit Agreement as any Lender and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders" shall include
the Agent in its individual capacity.
10.9 SUCCESSOR AGENT.
The Agent may, at any time, resign upon 20 days' written notice to the
Lenders, and be removed with or without cause by the Required Lenders upon 30
days' written notice to the Agent. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent; provided
that, so long as no Default or Event of Default has occurred and is continuing,
such successor Agent shall be reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the notice of resignation
or notice of removal, as appropriate, then the retiring Agent shall select a
successor Agent provided such successor is a Lender hereunder or a commercial
bank organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower, Guarantors and the Agent, set forth
below, and, in the case of the Lenders, set forth on Schedule 2.1(a), or at such
other address as such party may specify by written notice to the other parties
hereto:
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if to the Borrower or the Guarantors:
Personnel Group of America, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
Bank of America, N.A.
One Independence Center, 15th Floor
NC1-001-15-04
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services/Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx X. XxXxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Person to such Lender hereunder, under the Notes, the other
Credit Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. Any Person purchasing a participation in the Loans and
Commitments hereunder pursuant to Section 3.13 or Section 11.3(d) may exercise
all rights of set-off with respect to its participation interest as fully as if
such Person were a Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that none of the Credit
Parties may assign or transfer any of its interests without prior
written consent of the
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Lenders; provided further that the rights of each Lender to transfer,
assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3, provided
however that nothing herein shall prevent or prohibit any Lender from
(i) pledging its Loans hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank, or
(ii) granting assignments or selling participations in such Lender's
Loans and/or Commitments hereunder to its parent company and/or to any
Affiliate or Subsidiary of such Lender.
(b) Assignments. Each Lender may assign all or a portion of
its rights and obligations hereunder, pursuant to an assignment
agreement substantially in the form of Schedule 11.3(b), to (i) any
Lender or any Affiliate or Subsidiary of a Lender, or (ii) any other
commercial bank, financial institution or "accredited investor" (as
defined in Regulation D of the Securities and Exchange Commission)
reasonably acceptable to the Agent and, so long as no Default or Event
of Default has occurred and is continuing, the Borrower; provided that
(i) any such assignment (other than any assignment to an existing
Lender) shall be in a minimum aggregate amount of $5,000,000 (or, if
less, the remaining amount of the Commitment being assigned by such
Lender) of the Commitments and in integral multiples of $1,000,000
above such amount and (ii) each such assignment shall be of a constant,
not varying, percentage of all such Lender's rights and obligations
under this Credit Agreement. For purposes of the Borrower's acceptance
of the proposed assignee in clause (ii) of the foregoing sentence, the
Borrower shall have been deemed to accept any such assignee unless the
Borrower provides to the Agent and such assigning Lender, written
notice of the Borrower's objection to the assignment setting forth the
specific reasons for its objection, such notice to be delivered no
later than three (3) Business Days after the Borrower receives notice
of the requested assignment (as set forth below). Any assignment
hereunder shall be effective upon delivery to the Agent of written
notice of the assignment together with a transfer fee of $3,500 payable
to the Agent for its own account from and after the later of (i) the
effective date specified in the applicable assignment agreement and
(ii) the date of recording of such assignment in the Register pursuant
to the terms of subsection (c) below. The assigning Lender will give
prompt notice to the Agent and the Borrower of any such assignment.
Upon the effectiveness of any such assignment (and after notice to, and
(to the extent required pursuant to the terms hereof), with the consent
of, the Borrower as provided herein), the assignee shall become a
"Lender" for all purposes of this Credit Agreement and the other Credit
Documents and, to the extent of such assignment, the assigning Lender
shall be relieved of its obligations hereunder to the extent of the
Loans and Commitment components being assigned. Along such lines the
Borrower agrees that upon notice of any such assignment and surrender
of the appropriate Note or Notes, it will promptly provide to the
assigning Lender and to the assignee separate promissory notes in the
amount of their respective interests substantially in the form of the
original Note (but with notation thereon that it is given in
substitution for and replacement of the original Note or any
replacement notes thereof). By executing and delivering an assignment
agreement in accordance with this Section 11.3(b), the assigning Lender
thereunder and the assignee thereunder shall be deemed to confirm to
and agree with each other and the other parties hereto as follows: (i)
such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any
adverse claim; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or any of their respective
Affiliates or the performance or observance by any Credit Party of any
of its obligations under this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto
or thereto; (iii) such assignee represents and warrants that it is
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legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Credit Agreement,
the other Credit Documents and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision
to enter into such assignment agreement; (v) such assignee will
independently and without reliance upon the Agent, such assigning
Lender 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 decisions in taking or not taking action under this Credit
Agreement and the other Credit Documents; (vi) such assignee appoints
and authorizes the Agent to take such action on its behalf and to
exercise such powers under this Credit Agreement or any other Credit
Document as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Credit
Agreement and the other Credit Documents are required to be performed
by it as a Lender.
(c) Maintenance of Register. The Agent shall maintain at one
of its offices in Charlotte, North Carolina a copy of each Lender
assignment agreement delivered to it in accordance with the terms of
subsection (b) above and a register for the recordation of the identity
of the principal amount, type and Interest Period of each Loan
outstanding hereunder, the names, addresses and the Commitments of the
Lenders pursuant to the terms hereof from time to time (the
"Register"). The Agent will make reasonable efforts to maintain the
accuracy of the Register and to promptly update the Register from time
to time, as necessary. The entries in the Register shall be conclusive
in the absence of manifest error and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of
this Credit Agreement. The Register shall be available for inspection
by the Borrower and each Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer, grant or
assign participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall
remain a "Lender" for all purposes under this Credit Agreement (such
selling Lender's obligations under the Credit Documents remaining
unchanged) and the participant shall not constitute a Lender hereunder,
(ii) no such participant shall have, or be granted, rights to approve
any amendment or waiver relating to this Credit Agreement or the other
Credit Documents except to the extent any such amendment or waiver
would (A) reduce the principal of or rate of interest on or Fees in
respect of any Loans in which the participant is participating, (B)
postpone the date fixed for any payment of principal (including
extension of the Termination Date or the date of any mandatory
prepayment), interest or Fees in which the participant is participating
or (C) except as expressly provided in the Credit Documents, release
all or substantially all of the Collateral or release any Guarantor
from its guaranty obligations hereunder, and (iii) sub-participations
by the participant (except to an affiliate, parent company or affiliate
of a parent company of the participant) shall be prohibited. In the
case of any such participation, the participant shall not have any
rights under this Credit Agreement or the other Credit Documents (the
participant's rights against the selling Lender in respect of such
participation to be those set forth in the participation agreement with
such Lender creating such participation) and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold
such participation, provided, however, that such participant shall be
entitled to receive additional amounts under Sections 3.6, 3.9, 3.10
and 3.11 on the same basis as if it were a Lender.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender
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and any of the Credit Parties shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Agent or any Lender would otherwise have. No notice
to or demand on any Credit Party in any case shall entitle the Borrower or any
other Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 PAYMENT OF EXPENSES, ETC.
The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Agent in connection with the negotiation, preparation,
execution and delivery and administration of this Credit Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of Xxxxx & Xxx
Xxxxx, PLLC, special counsel to the Agent) and any amendment, waiver or consent
relating hereto and thereto including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this Credit
Agreement and (B) of the Agent and the Lenders in connection with enforcement of
the Credit Documents and the documents and instruments referred to therein
(including, without limitation, in connection with any such enforcement, the
reasonable fees and disbursements of counsel for the Agent and each of the
Lenders); (ii) pay and hold each of the Lenders harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender, its officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of (A) any
investigation, litigation or other proceeding (whether or not any Lender is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated in
any Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding or (B) the presence or Release of any Materials
of Environmental Concern at, under or from any Property owned, operated or
leased by the Borrower or any of its Subsidiaries, or the failure by the
Borrower or any of its Subsidiaries to comply with any Environmental Law (but
excluding, in the case of either of clause (A) or (B) above, any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
gross negligence or willful misconduct on the part of the Person to be
indemnified).
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided that no such amendment, change, waiver, discharge or
termination shall, without the consent of each Lender:
(i) extend the final maturity of any Loan, or any portion
thereof;
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) on any Loan or fees hereunder;
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(iii) reduce the principal amount on any Loan, or increase the
Commitments of the Lenders over the amount thereof in effect (it being
understood and agreed that a waiver of any Default or Event of Default
or of a mandatory reduction in the total commitments shall not
constitute a change in the terms of any Commitment of any Lender);
(iv) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4, release all or substantially all of (A) the Guarantors
from the guaranty obligations hereunder or (B) the Collateral;
(v) amend, modify or waive any provision of this Section 11.6
or Section 3.6, 3.10, 3.11, 3.12, 3.13, 9.1(a), 11.2, 11.3, 11.5 or
11.9;
(vi) reduce any percentage specified in, or otherwise modify,
the definition of "Required Lenders;" or
(vii) consent to the assignment or transfer by the Borrower
(or any Guarantor) of any of its rights and obligations under (or in
respect of) the Credit Documents to which it is a party.
No provision of Section 2.2 may be amended without the consent of the Issuing
Lender and no provision of Section 10 may be amended without the consent of the
Agent.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.9, 3.11, 10.7 or 11.5 shall survive the execution and delivery
of this Credit Agreement, the making of the Loans, the issuance of the Letters
of Credit, the repayment of the Loans, LOC Obligations and other obligations
under the Credit Documents and the termination of the Commitments hereunder, and
all representations and warranties made by the Credit Parties herein shall
survive delivery of the Notes and the making of the Loans hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document may
be brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties
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hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 11.1, such service to become effective
three (3) days after such mailing. Nothing herein shall affect the
right of the Agent to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against
any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF ORIGINAL CREDIT
AGREEMENT.
(a) This Credit Agreement shall become effective at such time,
on or after the Closing Date, that the conditions precedent set forth
in Section 5.1 have been satisfied and when it shall have been executed
by each of the Credit Parties and the Agent, and the Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken
together, bear the signatures of each Lender (including the Issuing
Lender), and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of each Credit Party, each Lender (including the
Issuing Lender) and the Agent, together with their permitted successors
and assigns. The Credit Parties and the Lenders (including the Issuing
Lender) each hereby agrees that, at such time as this Credit Agreement
shall have become effective pursuant to the terms of the immediately
preceding sentence, (i) the Original Credit Agreement automatically
shall be deemed amended and restated in its entirety by this Credit
Agreement, and all obligations and commitments outstanding under the
Original Credit Agreement shall be governed by the terms of this Credit
Agreement (as such obligations or commitments may be modified or
amended hereunder) and (ii) all of the
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promissory notes executed by the Borrower in connection with the
Original Credit Agreement automatically shall be substituted and
replaced by the amended and restated promissory notes executed in
connection with this Credit Agreement, and the Lenders agree to
promptly return such prior notes to the Borrower.
(b) Each of the Credit Parties hereby acknowledges and agrees
that it has no claims, counterclaims, offsets, or defenses to the
Credit Documents and the performance of its obligations thereunder, or
if such Credit Party has any such claims, counterclaims, offsets, or
defenses to the Credit Documents or any transaction related to the
Credit Documents, the same are hereby waived, relinquished and released
in consideration of the Lenders' execution and delivery of this Credit
Agreement.
11.14 CONFIDENTIALITY.
The Agent and the Lenders agree to keep confidential (and to cause
their respective affiliates, officers, directors, employees, agents and
representatives to keep confidential) all information, materials and documents
furnished to the Agent or any such Lender by or on behalf of any Credit Party
(whether before or after the Closing Date) which relates to the Borrower or any
of its Subsidiaries (the "Information"). Notwithstanding the foregoing, the
Agent and each Lender shall be permitted to disclose Information (i) to its
affiliates, officers, directors, employees, agents and representatives in
connection with its participation in any of the transactions evidenced by this
Credit Agreement or any other Credit Documents or the administration of this
Credit Agreement or any other Credit Documents; (ii) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process, or
requested by any Governmental Authority; (iii) to the extent such Information
(A) becomes publicly available other than as a result of a breach of this Credit
Agreement or any agreement entered into pursuant to clause (iv) below, (B)
becomes available to the Agent or such Lender on a non-confidential basis from a
source other than a Credit Party or (C) was available to the Agent or such
Lender on a non-confidential basis prior to its disclosure to the Agent or such
Lender by a Credit Party; (iv) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) first specifically agrees in a writing furnished to and
for the benefit of the Credit Parties to be bound by the terms of this Section
11.14; or (v) to the extent that the Borrower shall have consented in writing to
such disclosure. Nothing set forth in this Section 11.14 shall obligate the
Agent or any Lender to return any materials furnished by the Credit Parties.
11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan); or
(c) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the Borrower.
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As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.17 SETTLEMENT OF NURSEFINDERS, INC. ESCROW AGREEMENT.
Notwithstanding anything to the contrary in this Credit Agreement or
the other Credit Documents, the Credit Parties may settle and resolve in the
exercise of their reasonable business judgment any disputes or issues relating
to the application of amounts held in an escrow account established at the time
of the sale of Nursefinders, Inc. to hold a portion of the proceeds of such sale
pending resolution of certain issues, so long as such Credit Parties comply with
the mandatory prepayment provisions regarding Asset Sales pursuant to Section
3.3.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amended and Restated Credit Agreement to be duly executed and delivered
as of the date first above written.
[Signature Pages Omitted]
