CREDIT AGREEMENT
Dated as of July 26, 1999
among
STAFF LEASING, INC.
as Borrower,
THE SUBSIDIARIES OF THE BORROWER,
as Guarantors,
THE LENDERS
AND
NATIONSBANK, N.A.,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS..........................................................1
1.1 Definitions.......................................................1
1.2 Computation of Time Periods......................................21
1.3 Accounting Terms.................................................21
SECTION 2 CREDIT FACILITIES...................................................21
2.1 Revolving Loans..................................................21
2.2 Letter of Credit Subfacility.....................................23
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES......................28
3.1 Default Rate.....................................................28
3.2 Extension and Conversion.........................................28
3.3 Prepayments......................................................29
3.4 Fees.............................................................29
3.5 Capital Adequacy.................................................30
3.6 Inability To Determine Interest Rate.............................30
3.7 Illegality.......................................................31
3.8 Requirements of Law..............................................31
3.9 Taxes............................................................32
3.10 Indemnity.......................................................34
3.11 Pro Rata Treatment..............................................35
3.12 Sharing of Payments.............................................35
3.13 Payments, Computations, Etc.....................................36
3.14 Evidence of Debt................................................38
3.15 Replacement Lenders.............................................38
SECTION 4 GUARANTY............................................................39
4.1 The Guarantee....................................................39
4.2 Loans Unconditional..............................................40
4.3 Reinstatement....................................................41
4.4 Remedies.........................................................41
4.5 Rights of Contribution...........................................41
4.6 Continuing Guarantee.............................................42
SECTION 5 CONDITIONS..........................................................42
5.1 Conditions to Closing............................................42
5.2 Conditions to All Extensions of Credit...........................45
SECTION 6 REPRESENTATIONS AND WARRANTIES......................................46
6.1 Financial Condition..............................................46
6.2 No Changes or Restricted Payments................................46
6.3 Organization; Existence; Compliance with Law.....................46
6.4 Power; Authorization; Enforceable Loans..........................47
6.5 No Legal Bar.....................................................47
6.6 No Material Litigation...........................................47
6.7 No Default.......................................................48
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6.8 Ownership of Property; Liens.....................................48
6.9 Intellectual Property............................................48
6.10 No Burdensome Restrictions......................................48
6.11 Taxes...........................................................48
6.12 ERISA...........................................................49
6.13 Governmental Regulations, Etc...................................50
6.14 Purpose of Extensions of Credit.................................51
6.15 Environmental Matters...........................................51
6.16 Subsidiaries....................................................52
6.17 Year 2000 Compliance............................................52
SECTION 7 AFFIRMATIVE COVENANTS...............................................52
7.1 Financial Statements.............................................53
7.2 Certificates; Other Information..................................53
7.3 Notices..........................................................54
7.4 Payment of Loans.................................................56
7.5 Conduct of Business and Maintenance of Existence.................56
7.6 Maintenance of Property; Insurance...............................56
7.7 Inspection of Property; Books and Records; Discussions...........56
7.8 Environmental Laws...............................................57
7.9 Financial Covenants..............................................58
7.10 Use of Proceeds.................................................58
7.11 Additional Guaranties...........................................58
7.12 Subsidiaries....................................................58
7.13 Year 2000 Compliance............................................58
SECTION 8 NEGATIVE COVENANTS..................................................59
8.1 Indebtedness.....................................................59
8.2 Liens............................................................60
8.3 Nature of Business...............................................60
8.4 Consolidation, Merger, Sale or Purchase of Assets................60
8.5 Advances, Investments and Loans..................................61
8.6 Restricted Payments..............................................61
8.7 Transactions with Affiliates.....................................61
8.8 Fiscal Year......................................................61
8.9 Limitation on Restrictions.......................................62
8.10 Sale Leasebacks.................................................62
8.11 No Further Negative Pledges.....................................62
8.12 Capital Expenditures............................................62
8.13 Management......................................................62
8.14 Subordinated Debt...............................................63
SECTION 9 EVENTS OF DEFAULT...................................................63
9.1 Events of Default................................................63
9.2 Acceleration; Remedies...........................................66
SECTION 10 AGENCY PROVISIONS..................................................67
10.1 Appointment.....................................................67
10.2 Delegation of Duties............................................67
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10.3 Exculpatory Provisions..........................................67
10.4 Reliance on Communications......................................68
10.5 Notice of Default...............................................68
10.6 Non-Reliance on Agent and Other Lenders.........................68
10.7 Indemnification.................................................69
10.8 Agent in its Individual Capacity................................70
10.9 Successor Agent.................................................70
SECTION 11 MISCELLANEOUS......................................................70
11.1 Notices.........................................................70
11.2 Right of Set-Off................................................70
11.3 Benefit of Agreement............................................71
11.4 No Waiver; Remedies Cumulative..................................73
11.5 Payment of Expenses, etc........................................73
11.6 Amendments, Waivers and Consents................................74
11.7 Counterparts....................................................75
11.8 Headings........................................................75
11.9 Survival........................................................75
11.10 Governing Law; Submission to Jurisdiction; Venue...............75
11.11 Severability...................................................76
11.12 Entirety.......................................................76
11.13 Binding Effect; Termination....................................76
11.14 Confidentiality................................................77
11.15 Time...........................................................77
11.16 Conflict.......................................................77
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SCHEDULES
Schedule 1.1(a) Existing Material Shareholders Schedule 1.1(b) Investments
Schedule 1.1(c) Liens Schedule 1.1(d) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing Schedule 2.1(e) Form of
Revolving Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 6.2 Restricted Payments
Schedule 6.16 Subsidiaries
Schedule 7.2(b) Form of Officer's Compliance Certificate
Schedule 7.11 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 8.7 Transactions with Affiliates
Schedule 11.1 Notices
Schedule 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of July 26, 1999 (the "Credit
Agreement"), is by and among STAFF LEASING, INC., a Florida corporation (the
"Borrower"), each of the Borrower's Subsidiaries (individually a "Guarantor" and
collectively the "Guarantors"), the lenders named herein and such other lenders
as may become a party hereto (the "Lenders"), and NATIONSBANK, N.A., as Agent
for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$10,000,000 credit facility for the purposes hereinafter set forth;
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
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:
"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
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Applicable Percentage" means, for the Loans, the Unused Fee
and the Letter of Credit Fee, the appropriate applicable percentages
corresponding to the Leverage Ratio in effect as of the most recent
determination date as shown in the table below:
=============== ===================== ===================== ===================== ===================
PricingLevel LeverageRatio ApplicablePercentage ApplicablePercentage
ForEurodollarLoans ForBase RateLoans ApplicablePercentage
and Letter of ForUnused Fees
Credit Fee
--------------- --------------------- --------------------- --------------------- -------------------
I 1.0 to 1.0 1.25% 0% 0.25%
but 1.5 to 1.0 but 1.50% 0% 0.30%
2.0 to 1.0 1.75% 0% 0.35%
=============== ===================== ===================== ===================== ===================
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
date by which the Agent receives the officer's certificate provided by
the Borrower in accordance with the provisions of Section 7.2(b);
provided, however, that (i) the initial Applicable Percentages shall be
based on Pricing Level I until the first Calculation Date to occur
after the Closing Date, and, thereafter, the Applicable Percentages
shall be determined by the then current Leverage Ratio, and (ii) if the
Borrower fails to provide the officer's certificate to the Agent as
required by Section 7.2(b), the Applicable Percentages from the date
five Business Days after the date by which the Borrower should have
provided the officer's certificate required by Section 7.2(b) shall be
based on Pricing Level IV until such time as an appropriate officer's
certificate is provided, whereupon the Applicable Percentages shall be
determined by the then current Leverage Ratio. Except as set forth
above, 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 and
Letters of Credit as well as any new Loans and Letters of Credit made
or issued.
"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
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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 (i) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (ii) 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 (i) 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.
"Borrower" means Staff Leasing, Inc., a Florida corporation.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Sarasota, Florida or 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 interbank market.
"Capital Expenditures" means all expenditures which in
accordance with GAAP would be classified as capital expenditures,
including, without limitation, Capital Leases.
"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.
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"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, certificates of
deposit or bankers' acceptances 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 Lender
being an "Approved Lender"), in each case with maturities of not more
than 364 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 twelve 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 any Person (other than Existing
Material Shareholders) or two or more Persons acting in concert shall
have acquired beneficial ownership, directly or 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
15% or more of the combined voting power of all Voting Stock of the
Borrower. 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 statute 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.
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"Commitment" (i) with respect to each Lender, the Revolving
Commitment of such Lender and (ii) with respect to the Issuing Lender,
the LOC Commitment.
"Commitment Period" means the period from and including the
Closing Date to but not including the earlier of (i) the Maturity Date,
or (ii) the date on which the Commitments terminate in accordance with
the provisions of this Credit Agreement.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any material
agreement, instrument or undertaking to which such Person is a party or
by which it or any of its property is bound.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents 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.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (i) has failed to make an Extension of Credit required
pursuant to the terms of this Credit Agreement, (ii) has failed to pay
to the Agent or any Lender an amount owed by such Lender pursuant to
the terms of the Credit Agreement or any other of the Credit Documents,
or (iii) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or
similar proceeding.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"EBITDA" means, for any period with respect to the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) Net Income
for such period (excluding the effect of any extraordinary or other
non-recurring gains or losses outside of the ordinary course of
business) plus (b) an amount which, in the determination of Net Income
for such period, has been deducted for (i) Interest Expense for such
period, (ii) Federal, state or other domestic and foreign income taxes
for such period and (iii) depreciation expense and amortization expense
for such period, in each case determined in accordance with GAAP
applied on a consistent basis. Except as expressly provided otherwise,
the applicable period shall be for the four consecutive quarters ending
as of the date of determination.
5
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Borrower
(such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within five Business Days after written notice of such
proposed assignment has been provided by the assigning Lender to the
Borrower in accordance with Section 11.1); provided, however, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as
an Eligible Assignee.
"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 Issuance" means any issuance by any Credit Party to
any Person which is not a Credit Party of (a) shares of its capital
stock, (b) any shares of its capital stock pursuant to the exercise of
options or warrants or (c) any shares of its capital stock pursuant to
the conversion of any debt securities to equity.
"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 the Borrower 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) or (c) of the
Code.
"ERISA 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 could reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or
partial withdrawal of the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect
to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
6
"Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"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:
Interbank Offered Rate
Eurodollar 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 a 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.
"Existing Material Shareholders" means the Persons identified
on Schedule 1.1(a).
"Extension of Credit" means, as to any Lender, the making of,
or participation in, a Loan by such Lender or the issuance or extension
of, or participation in, a Letter of Credit.
7
"Fees" means all fees payable pursuant to Section 3.4.
"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 (i) 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 (ii) 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.
"Fixed Charge Coverage Ratio" means, as of the end of each
fiscal quarter of the Borrower for the Borrower and its Subsidiaries on
a consolidated basis for the four consecutive quarters ending on such
date, the ratio of (a) the sum of EBITDA for such period plus lease and
rent expense for such period to (b) the sum of (i) Interest Expense for
such period plus (ii) lease and rent expense for such period plus (iii)
Scheduled Funded Debt Payments for such period, determined in each case
in accordance with GAAP applied on a consistent basis.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not Domestic Subsidiary of such
Person.
"Funded Debt" means, with respect to any Person, without
duplication, (i) all Indebtedness of such Person for borrowed money,
(ii) all purchase money Indebtedness of such Person, including without
limitation the principal portion of all obligations of such Person
under Capital Leases, (iii) all Guaranty Obligations of such Person
with respect to Funded Debt of another Person, (iv) the maximum
available amount of all standby letters of credit or acceptances issued
or created for the account of such Person not secured by cash or Cash
Equivalents, (v) all Funded Debt of another Person secured by a Lien on
any Property of such Person, whether or not such Funded Debt has been
assumed, provided that for purposes hereof the amount of such Funded
Debt shall be limited to the greater of (A) the amount of such Funded
Debt as to which there is recourse to such Person or (B) the fair
market value of the property which is subject to the Lien, (vi) 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 Debt of any Person shall include the Funded Debt of any
partnership or joint venture in which such Person is a general partner
or joint venturer, but only to the extent to which there is recourse to
such Person for the payment of such Funded Debt.
"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.
8
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guaranteed Obligations" means, as to each Guarantor, without
duplication, (i) all obligations of the Borrower to the Lenders and the
Agent, whenever arising, under this Credit Agreement, the Notes or the
Credit Documents relating to the Loans hereunder (including, but not
limited to, any interest accruing after the occurrence of a Bankruptcy
Event with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code), and (ii) all
liabilities and obligations, whenever arising, owing from the Borrower
to any Lender, or any Affiliate of a Lender, arising under any Hedging
Agreement relating to the Loans hereunder.
"Guarantors" means such term as defined in the first paragraph
hereof.
"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.
"Health Care Agreement" means that certain agreement between
Blue Cross and Blue Shield of Florida, Inc./Health Options, Inc. and
Staff Acquisition.
"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.
9
"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, (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 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, but only to the extent to which there is recourse
to such Person for payment of such Indebtedness.
10
"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).
"Interest Expense" means for any period with respect to the
Borrower and its Subsidiaries on a consolidated basis all interest
expense, including the amortization of debt discount and premium and
the interest component under Capital Leases, in each case determined in
accordance with GAAP applied on a consistent basis. Except as expressly
provided otherwise, the applicable period shall be for the four
consecutive quarters ending as of the date of determination.
"Interest Payment Date" means (i) as to any Base Rate Loan,
the last day of each fiscal quarter of the Borrower and the Maturity
Date and (ii) as to any Eurodollar Loan, the last day of each Interest
Period for such Loan and on the Maturity Date. 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 a period of one, two or three 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 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),
(b) no Interest Period shall extend beyond the Maturity Date, and (c)
in the case of Eurodollar Loans, 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 Business Day of such calendar month.
"Investment" means (a) any loan or advance to any Person, (b)
any purchase or other acquisition of any assets, capital stock,
warrants, rights, options, obligations or other securities of, or
equity interest in, any Person, (c) any capital contribution to any
Person or any other investment in such Person, including, without
limitation, any Guaranty Obligation incurred for the benefit of such
Person.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.4(c)(ii).
"Joinder Agreement" means a joinder agreement substantially in
the form of Schedule 7.11.
"Lenders" means each of the Persons identified as a "Lender"
on the signature pages hereto, and their successors and assigns.
11
"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.
"Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.4(b)(i).
"Leverage Ratio" means, as of the last day of any fiscal
quarter of the Borrower, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the ratio of Funded Debt on such
day to EBITDA for the period of four consecutive fiscal quarters ending
as of such day.
"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" means the Revolving Loans (or a portion of
any Revolving Loan bearing interest at the Base Rate or the Eurodollar
Rate and referred to as a Base Rate Loan or a Eurodollar Loan),
individually or collectively, as appropriate.
"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 by the Borrower.
12
"Management Group" means collectively, the Chief Executive
Officer, the President, the Senior Vice President of Benefits and Risk
Management and the Chief Financial Officer of the Borrower.
"Material Adverse Change" means
(a) with respect to the Workers' Compensation Policy,
the Borrower's failure (prior to the termination of such
policy or any replacement policy thereof) to obtain a workers'
compensation policy satisfying the following conditions: (i)
such policy must be provided by an insurer with an A.M. Best
rating of "A" or better, (ii) such policy must have a term of
at least one year, (iii) such policy must contain a guaranteed
cost provision for the entire term of the policy and (iv) such
policy shall not provide for premium payments or potential
required premium payments in excess of $4.00 per $100.00 of
payroll;
(b) with respect to the Health Care Agreement, the
occurrence of any of the following events: (i) Staff
Acquisition's failure (prior to the termination of the Health
Care Agreement) to renew such Health Care Agreement with Blue
Cross and Blue Shield of Florida/Health Options, Inc. for a
term of at least one year; (ii) during the calendar year
ending December 31, 1999, the annual individual excess
liability limit per insured exceeds $3,409.00, (iii) during
the calendar year ending December 31, 2000, the annual
individual excess liability limit per insured exceeds
$3,750.00; (iv) during the calendar year ending December 31,
2001, the annual individual excess liability limit per insured
exceeds $4,125.00; or (v) the annual individual excess
liability limit per insured for any calendar year exceeds the
average premium per insured for such year (based on a
calculation performed annually following the annual
re-enrollment of insureds and final establishment of the
annual individual excess liability limit); and
(c) with respect to any Other Health Care Agreement,
the occurrence of any of the following events: (i) such Other
Health Care Agreement shall have a term less than one year;
(ii) for any calendar year, the annual individual excess
liability per insured is more than 110% of the amount of such
liability limit for the previous calendar year; or (iii) the
annual individual excess liability limit per insured for any
calendar year exceeds the average premium per insured for such
year (based on a calculation performed annually following the
annual re-enrollment of insureds and final establishment of
the annual individual excess liability limit).
"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 the Borrower and its Subsidiaries
as a whole to perform any material obligation under the Credit
Documents to which it is a party or (iii) the rights and remedies of
the Lenders under the Credit Documents.
13
"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.
"Maturity Date" means July 26, 2001.
"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" means NationsBank, N.A. and its successors.
"Net Income" means, for any period, the net income with
respect to the Borrower and its Subsidiaries on a consolidated basis as
determined in accordance with GAAP applied on a consistent basis.
"Non-Excluded Taxes" means such term as is defined in Section
3.9.
"Note" or "Notes" means any Revolving Note, as the context may
require.
"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.
"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.
"Other Health Care Agreement" means any health care agreement
of the Borrower or any of its Subsidiaries (other than the Health Care
Agreement) which does not contain a guaranteed cost provision
acceptable to the Required Lenders.
14
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Loans as provided in Section 3.12.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Acquisition" means an acquisition by the Borrower
or any Guarantor of all of the capital stock of another Person, or all
or substantively all of the assets of another Person, provided that
each of the following conditions are satisfied:
(a) the acquisition is consummated pursuant to a
negotiated acquisition agreement and involves the purchase of
(i) assets related to or used in a business similar to the
business of the Credit Parties as of the date hereof or (ii) a
business similar to the business of the Credit Parties as of
the date hereof;
(b) (i) such Person to be acquired or (ii) the Person
from whom the related assets are acquired, must have attained,
for the most recently ending twelve month period, earnings
before any deductions for interest expense, taxes paid,
depreciation or amortization for such period greater than
$1.00;
(c) the purchase price paid (i) for any one
acquisition shall not exceed (A) $5,000,000 in cash, assumed
indebtedness and seller financing and (B) $10,000,000 in total
consideration and (ii) for multiple acquisitions shall not
exceed $20,000,000 in total consideration for any twelve month
period;
(d) after giving effect to the acquisition, the
representations and warranties set forth in Section 6 hereof
shall be true and correct in all material respects on and as
of the date of such acquisition; and
(e) no Default or Event of Default exists and is
continuing or would result from such acquisition.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents, (ii) accounts receivable created, acquired
or made 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 in
settlement of accounts receivable (created in the ordinary course of
business) from defaulting obligors or settlements of litigation
matters, (iv) Investments existing as of the Closing Date and set forth
on Schedule 1.1(b), (v) Investments in any Credit Party, (vi) advances
or loans to employees in the ordinary course of business not to exceed
$1,750,000 in the aggregate at any time outstanding, (vii) Permitted
Acquisitions, (viii) the purchases or acquisitions of property and
equipment in the ordinary course of business, except as otherwise
limited or prohibited hereunder and (viii) the repurchase by the
Borrower of up to 2,000,000 shares of its capital stock in the
aggregate during the term of this Credit Agreement.
15
"Permitted Liens" means:
(i) 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);
(ii) 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 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) 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, health insurance, 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);
(iv) Liens in connection with attachments or
judgments (including judgment or appeal bonds) provided that
the judgments secured shall, within 45 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 45 days
after the expiration of any such stay;
(v) 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;
(vi) Liens securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under
Section 8.1(f), provided that any such Lien attaches only to
the Property financed and such Lien attaches thereto
concurrently with or within 90 days after the acquisition
thereof;
16
(vii) leases or subleases granted to others not
interfering in any material respect with the business of the
Borrower or any of its Subsidiaries;
(viii) any interest of title of a lessor under, and
Liens arising from UCC financing statements (or equivalent
filings, registrations or agreements in foreign jurisdictions)
relating to, leases permitted by this Credit Agreement;
(ix) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions;
(x) inchoate Liens arising under ERISA to secure
current service pension liabilities as they are incurred under
the provisions of any Plan;
(xi) Liens existing as of the Closing Date granted to
landlords pursuant to the terms of certain leases providing
for the use of office space by the Borrower or any of its
Subsidiaries provided that (a) such Liens attach only to the
tangible Property located at the applicable office space and
(b) such Liens do not attach to any of the Property located at
the chief executive office and principal place of business of
the Borrower set forth on Schedule 6.16;
(xii) Liens securing Indebtedness to the extent
permitted under Section 8.1(d); provided that any such Lien
does not attach to or encumber in any way any capital stock or
other equity interest of the Borrower or any of its
Subsidiaries;
(xiii) Liens on cash or Cash Equivalents securing
Indebtedness to the extent permitted under Section 8.1(h); and
(xiv) Liens existing as of the Closing Date and set
forth on Schedule 1.1(c); provided that no such Lien shall at
any time be extended to or cover any Property other than the
Property subject thereto on the Closing Date.
"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.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by NationsBank, N.A. 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 NationsBank, N.A. 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
NationsBank, N.A. to any debtor).
17
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation T, U, or X" means Regulation T, 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
notice requirement has been waived by regulation.
"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 (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.
"Responsible Officer" means the President, Chief Executive
Officer, the Chief Financial Officer, any Vice President or other duly
authorized officer.
"Revolving Commitment" means, 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 Revolving Commitment Percentage of
the Revolving Committed Amount as such amount may be reduced from time
to time, (i) to make Revolving Loans in accordance with the provisions
of Section 2.1(a) and (ii) to purchase Participation Interests in
Letters of Credit in accordance with the provisions of Section 2.2(c).
18
"Revolving Commitment Percentage" means, for each Lender, the
percentage identified as its Revolving Commitment Percentage on
Schedule 1.1(d), as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" means TEN MILLION DOLLARS
($10,000,000).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans in substantially the form attached as Schedule 2.1(e),
individually or collectively, as appropriate, as such promissory notes
may be amended, modified, supplemented, extended, renewed or replaced
from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Scheduled Funded Debt Payments" means, as of the date of
determination, for the Borrower and its Subsidiaries on a consolidated
basis, the sum of all scheduled payments of principal on Funded Debt
for the applicable period ending on the date of determination
(including the principal component of payments due on Capital Leases
during the applicable period ending on the date of determination).
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer 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.
19
"Staff Acquisition" means Staff Acquisition, Inc., a Delaware
corporation.
"Subordinated Indebtedness" means any unsecured Indebtedness
incurred by any Credit Party which is subordinated on terms and
conditions satisfactory to the Required Lenders.
"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% of
the voting interests at any time. Unless otherwise identified,
"Subsidiary" or "Subsidiaries" shall mean Subsidiaries of the Borrower.
"Tangible Net Worth" means, as of any date, shareholders'
equity or net worth of the Borrower and its Subsidiaries on a
consolidated basis minus goodwill, patents, trade names, trademarks,
copyrights, franchises, organizational expense, deferred expenses and
other assets in each case as are shown as "intangible assets" on a
balance sheet of Borrower and its Subsidiaries on a consolidated basis,
as determined in accordance with GAAP.
"Total Liabilities" means total liabilities of the Borrower
and its Subsidiaries on a consolidated basis as determined in
accordance with GAAP.
"Unused Fee" shall have the meaning given such term in Section
3.4(a).
"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.
"Workers' Compensation Policy" means that certain Workers'
Compensation and Employees Liability policy no. WA1-65D-004110-297
issued by Liberty Mutual Insurance Company in favor of certain
Subsidiaries of the Borrower, as amended or modified from time to time.
"Year 2000 Compliant" shall have the meaning given to such
term in Section 6.17.
20
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 annual audited financial statements
referenced in Section 6.1); 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 Revolving Loans.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (the "Revolving Loans") to the Borrower from time to time in the
amount of such Lender's Revolving Commitment Percentage of such Revolving Loans
for the purposes hereinafter set forth; provided that (i) with regard to the
Lenders collectively, the aggregate principal amount of Revolving Loans
outstanding at any time plus LOC Obligations outstanding at any time shall not
exceed the Revolving Committed Amount and (ii) with regard to each Lender
individually, such Lender's outstanding Revolving Loans shall not exceed such
Lender's Revolving Commitment Percentage of the Revolving Committed Amount.
Revolving 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.
(b) Revolving Loan Borrowings.
21
(i) Notice of Borrowing. The Borrower shall request a
Revolving 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 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 Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate principal
amount to be borrowed, 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 Revolving 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 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 Revolving Loan shall be in a
minimum aggregate principal amount of $500,000, in the case of
Eurodollar Loans, or $500,000 (or the remaining Revolving Committed
Amount, if less), in the case of Base Rate Loans, and integral
multiples of $100,000 in excess thereof.
(iii) Advances. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Agent for
the account of the Borrower as specified in Section 3.13(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 (i) 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 or (ii) as directed by the Borrower in writing in 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 Revolving Loans shall be due
and payable in full on the Maturity Date.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving 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 plus the Applicable Percentage;
(ii) Eurodollar Loans. During such periods as Revolving 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.
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Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans shall be evidenced by a duly
executed Revolving Note in favor of each Lender substantially in the form of
Schedule 2.1(e).
(f) Maximum Number of Eurodollar Loans. The Borrower will be limited to
a maximum number of ten (10) Eurodollar Loans outstanding at any time. For
purposes hereof, Eurodollar Loans with separate or different Interest Periods
will be considered as separate Eurodollar Loans even if their Interest Periods
expire on the same date.
2.2 Letter of Credit Subfacility.
(a) Issuance. During the Commitment Period, 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 and in reliance upon
the representations and warranties set forth herein, the Issuing Lender agrees
to issue, and each Lender severally agrees to participate in the issuance by the
Issuing Lender of, standby and trade Letters of Credit in Dollars from time to
time from the Closing Date until the date five (5) days prior to the Maturity
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 FIVE MILLION DOLLARS ($5,000,000.00) (the "LOC Committed Amount")
and (ii) the sum of the aggregate outstanding principal amount of Revolving
Loans plus LOC Obligations shall not at any time exceed the Revolving 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 Maturity Date. Each Letter of Credit shall
comply with the related LOC Documents. The issuance and expiry dates 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 and the 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 Participation Interest from
the Issuing Lender in such Letter of Credit and the obligations arising
thereunder and any collateral relating thereto, in each case in an amount equal
to its pro rata share of the obligations under such Letter of Credit (based on
the respective Revolving Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume and be obligated to pay to
the Issuing Lender 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 Interest 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) below. 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 Revolving Loan in the amount
of the drawing as provided in subsection (e) below 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 Revolving 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 Adjusted
Base Rate plus 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 Interest 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.
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(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Agent shall give notice to
the Lenders that a Revolving 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 Revolving 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 Revolving 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 Obligations. Each such
Lender hereby irrevocably agrees to make its pro rata share of each such
Revolving 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 Revolving 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 Revolving Loan to be made by the time otherwise
required hereunder, (v) whether the date of such borrowing is a date on which
Revolving 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 Revolving 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 other 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 Interests 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 Revolving 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 Interests 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) above, interest on the principal amount of Participation
Interests 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 Interests, at the rate equal to, if paid within two (2)
Business Days of the date of the Revolving Loan advance, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.
(f) Designation of Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a), 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 Credit Party other than 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.
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(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 pay, and protect, indemnify and save
each Lender harmless from and against, any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that such 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 such 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").
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary thereof.
No Lender (including the Issuing Lender) shall 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 such 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 any Lender (including the Issuing Lender), under or in
connection with any Letter of Credit or the related certificates, if
taken or omitted in good faith, shall not put such 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 each Lender (including
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. No Lender
(including the Issuing Lender) shall, in any way, be liable for any
failure by such 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 such Lender.
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(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i) shall
survive the termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Lenders (including the Issuing
Lender) to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify any
Lender (including the Issuing Lender) in respect of any liability
incurred by such Lender (A) arising solely out of the gross negligence
or willful misconduct of such Lender, as determined by a court of
competent jurisdiction, or (B) caused by such 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
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.
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SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of
Default, (i) 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 2.5%
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 2.5%
greater than the Base Rate) and (ii) the Letter of Credit Fee shall accrue at a
per annum rate 2.5% greater than the rate which would otherwise be applicable.
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 3.7,
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 and
the conditions set forth in subsections (a), (b) and (c) of Section 5.2 have
been satisfied, (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), and (iv) 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 (a) through (c) 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 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.
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3.3 Prepayments.
(a) Voluntary Prepayments. Loans may be repaid in whole
or in part without premium or penalty; provided that (i) Eurodollar
Loans may not be prepaid other than at the end of the Interest Period
applicable thereto and only then on three (3) Business Days' prior
written notice to the Agent, (ii) any prepayment of Eurodollar Loans
will be subject to Section 3.10, (iii) Base Rate Loans may be prepaid
by the Borrower by giving notice to the Agent prior to 11:00 a.m.
(Charlotte, North Carolina time) on the date of the requested
prepayment, and (iv) each such partial prepayment shall be in a minimum
principal amount of $500,000, in the case of Eurodollar Loans, and
$500,000, in the case of Base Rate Loans, and in integral multiples of
$100,000 in excess thereof. Any such voluntary prepayments shall be
applied first to Base Rate Loans and then to Eurodollar Loans in direct
order of their Interest Period maturities.
(b) Mandatory Prepayments.
(i) If at any time, the aggregate principal amount of
Revolving Loans plus LOC Obligations outstanding shall exceed
the Revolving Committed Amount, the Borrower shall immediately
make payment on the Revolving Loans and (after all Revolving
Loans have been repaid) cash collateralize the LOC
Obligations, in an amount sufficient to eliminate the excess.
Any such mandatory prepayments shall be applied first to Base
Rate Loans and then to Eurodollar Loans in direct order of
their Interest Period maturities. Amounts prepaid hereunder
may be reborrowed in accordance with the provisions hereof.
(ii) If at any time, the sum of the aggregate
principal amount of LOC Obligations outstanding shall exceed
the LOC Committed Amount, the Borrower immediately shall cash
collateralize the LOC Obligations in an amount sufficient to
eliminate such excess.
3.4 Fees.
(a) Unused Fee. In consideration of the Revolving Committed
Amount being made available by the Lenders, the Borrower agrees to pay
to the Agent, for the ratable benefit of the Lenders, an unused fee
(the "Unused Fee") equal to the Applicable Percentage for the Unused
Fee then in effect (calculated on the basis of actual number of days
elapsed in a year of 360 days) on the average daily unused portion of
the Revolving Committed Amount for the applicable period. The Unused
Fee shall be payable quarterly in arrears on the 15th day following the
last day of each calendar quarter for the immediately preceding quarter
(or portion thereof) beginning with the first such date to occur after
the Closing Date.
(b) Letter of Credit Fees.
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(i) Letter of Credit Issuance Fee. In consideration
of the issuance of Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Lender a
fee (the "Letter of Credit Fee") on such Lender's Revolving
Commitment Percentage of the average daily maximum amount
available to be drawn under each such 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 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) Issuing Lender Fees. In addition to the Letter
of Credit Fee payable pursuant to clause (i) above, the
Borrower promises to pay to the Issuing Lender for its own
account without sharing by the other Lenders (A) 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 and (B) at such time as there is a minimum
of two (2) Lenders, a letter of credit fronting the fee of
0.125% of the face amount of each Letter of Credit
(collectively, the "Issuing Lender Fees").
3.5 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 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.
3.6 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.
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3.7 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 3.10.
3.8 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 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 3.9 (including Non-Excluded Taxes imposed
solely by reason of any failure of such Lender to comply with its
obligations under Section 3.9(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));
(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
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(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 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 3.10. 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 for a period of one year the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
3.9 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
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("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
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, LOC Obligations 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
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(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 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.
3.10 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 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 3.10 shall survive for a period of one
year the termination of this Credit Agreement and the payment of the Loans, LOC
Obligations and all other amounts payable hereunder.
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3.11 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the
terms of Section 3.3) 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 Letter of Credit Fee, each
reduction of the Revolving 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 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.
3.12 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 3.12 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 3.12 to share in the benefits of any recovery on such secured claim.
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3.13 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 Section 11.1 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 owing
by the Borrower hereunder, subject to the terms of Section 3.11(a)).
The Agent will distribute such payments to such Lenders, if 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.
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(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 Loans or any other amounts outstanding under
any of the Credit Documents 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 actually incurred) of the Agent in connection
with enforcing the rights of the Lenders under the Credit
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 actually incurred) of each of the Lenders in
connection with enforcing its rights under the Credit
Documents or otherwise with respect to the Loans owing to such
Lender;
FOURTH, to the payment of all accrued interest and
fees on or in respect of the Loans;
FIFTH, to the payment of the outstanding principal
amount of the Loans and LOC Obligations (including the payment
or cash collateralization of the outstanding LOC Obligations);
SIXTH, to all 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.
37
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following
the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 3.13(b).
3.14 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 3.14
(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.
3.15 Replacement Lenders.
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At any time after the payment by the Borrower to any Lender of any
amount pursuant to Section 3.8 or 3.9 that the Borrower reasonably deems
material, the Borrower may, by writing addressed to the Agent and each Lender
that requested the payment of such amount, nominate or propose any bank or other
financial institution that is willing to become the assignee of the Commitment
and other obligations of such Lender (a "Replacement Lender") pursuant to
Section 11.3, and within fifteen (15) Business Days after receipt of such
proposal from the Borrower, each such Lender shall execute and deliver to the
Agent an assignment agreement whereby such Lender shall assign its entire
Commitment in favor of the proposed Replacement Lender in accordance with
Section 11.3 unless, prior to the expiration of such period, the Agent shall
have notified the Borrower and such Lender that the proposed Replacement Lender
is not reasonably acceptable to the Agent; provided, that in no event will (i)
any Lender be required to enter into an Assignment Agreement at a price less
than par plus accrued interest and prorated fees and other costs due hereunder
to the effective date thereof, (ii) the Agent or any Lender be obligated to
assist the Borrower in identifying any bank or other financial institution that
is willing to become such a Replacement Lender or (iii) any such assignment be
required if the consummation thereof conflicts with any Requirement of Law.
SECTION 4
GUARANTY
4.1 The Guarantee.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, to each Affiliate of a Lender that enters into a Hedging Agreement and
to the Agent as hereinafter provided the prompt payment of the Guaranteed
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 Guaranteed 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
Guaranteed 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 such Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
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4.2 Loans 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(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 Guaranteed Obligations
shall be accelerated, or any of the Guaranteed 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
Guaranteed 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 Guaranteed Obligations
shall fail to attach or be perfected; or
(v) any of the Guaranteed 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).
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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 Guaranteed 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 Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
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 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 Guaranteed 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 hereof notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
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.
4.5 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 4.5), 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 4.5 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
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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 "Guarantied
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guarantied Obligations; (ii) "Excess Payment" shall mean, in
respect of any Guarantied Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guarantied Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.5, 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 4.5 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).
4.6 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Guaranteed Obligations whenever arising. Each Guarantor further
agrees that 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 Agreement, no Guarantor shall enforce any rights provided it under
any reimbursement or guaranty agreement between or among such Guarantor and any
of the other Guarantors.
SECTION 5
CONDITIONS
5.1 Conditions to Closing.
This Credit Agreement shall become effective, and the initial
Extensions of Credit may be made, upon the satisfaction of the following
conditions precedent:
(a) Execution of Credit Agreement and Credit Documents.
Receipt of (i) multiple counterparts of this Credit Agreement and (ii)
a Revolving Note for each Lender, executed by a duly authorized officer
of each party thereto and in each case conforming to the requirements
of this Credit Agreement.
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(b) Financial Information. Receipt of financial
information regarding the Borrower and its Subsidiaries, as may be
requested by, and in form and substance satisfactory to the Agent,
including without limitation, (i) the consolidated financial statements
of the Borrower and its Subsidiaries for the year ending December 31,
1998, including balance sheets and income and cash flow statements,
audited by nationally recognized independent public accountants
reasonably satisfactory to the Required Lenders and containing an
unqualified opinion of such firm that such statements present fairly,
in all material respects, the consolidated financial position and
results of operations of the Borrower, and are prepared in conformity
with GAAP and (ii) the company-prepared consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal quarter ending March
31, 1999 and related consolidated statements of income, retained
earnings, shareholders' equity and cash flows for such period, prepared
in conformity with GAAP.
(c) Absence of Legal Proceedings. The absence of any
action, suit, investigation or proceeding pending in any court or
before any arbitrator or governmental instrumentality which could
reasonably be expected to have a Material Adverse Effect on the
Borrower or any of its Subsidiaries.
(d) Legal Opinions. Receipt of opinions of counsel for
the Credit Parties relating to the Credit Documents and the
transactions contemplated herein, in form and substance satisfactory to
the Agent and the Required Lenders.
(e) Corporate Documents. Receipt of the following for the
Borrower, Staff Acquisition, Inc. and Staff Insurance:
(i) Articles of Incorporation. Copies of the articles
of incorporation or charter documents certified to be true and
complete as of a recent date by the appropriate governmental
authority of the state of its incorporation.
(ii) Resolutions. Copies of resolutions of the Board
of Directors approving and adopting the respective Credit
Documents, the transactions contemplated therein and
authorizing the execution and delivery thereof, certified by a
secretary or assistant secretary as of the Closing Date to be
true and correct and in force and effect as of such date.
(iii) Bylaws. Copies of the bylaws certified by a
secretary or assistant secretary as of the Closing Date to be
true and correct and in force and effect as of such date.
(iv) Good Standing. Copies, where applicable, of
certificates of good standing, existence or its equivalent
certified as of a recent date by the appropriate governmental
authorities of the state of incorporation and each other state
in which the failure to so qualify and be in good standing
would have a material adverse effect on the business or
operations in such state.
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(v) Incumbency. An incumbency certificate certified
by a secretary or assistant secretary to be true and correct
as of the Closing Date.
(f) Partnership Documents. Receipt of the following for each
of the Guarantors other than Staff Acquisition, Inc. and Staff
Insurance:
(i) Partnership Agreement. Copy of the partnership
agreement certified to be true and correct and in full force
and effect as of the Closing Date.
(ii) Resolutions. Copies of resolutions approving and
adopting the respective Credit Documents, the transactions
contemplated therein and authorizing the execution and
delivery thereof, certified to be true and correct and in full
force and effect as of the Closing Date.
(iii) Good Standing. Copies, where applicable, of
certificates of good standing, existence or its equivalent
certified as of a recent date by the appropriate governmental
authorities of the state of formation and each other state in
which the failure to so qualify and be in good standing would
have a material adverse effect on the business or operations
in such state.
(iv) Incumbency. An incumbency certificate certified
by an authorized representative to be true and correct as of
the Closing Date.
(g) Health Care Agreement. The Agent shall have received a
certified copy of the Health Care Agreement.
(h) Material Adverse Effect. There shall not have occurred a
change since December 31, 1998 that has had or could reasonably be
expected to have a Material Adverse Effect (including matters related
to litigation, tax, accounting, labor, insurance and pension
liabilities).
(i) Officer's Certificate. The Agent shall have received a
certificate or certificates executed by the chief financial officer of
the Borrower as of the Closing Date stating that (A) the Borrower and
each of the Borrower's Subsidiaries are in compliance with all existing
financial obligations, (B) all governmental, shareholder and third
party consents and approvals, if any, with respect to the Credit
Documents and the transactions contemplated thereby have been obtained,
(C) no action, suit, investigation or proceeding is pending or, to the
best of his knowledge, threatened in any court or before any arbitrator
or governmental instrumentality that purports to affect any transaction
contemplated by the Credit Documents, or could have or might be
reasonably expected to have a Material Adverse Effect, and (D)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated herein or
therein to occur on such date, (1) the Borrower and each of the
Borrower's Subsidiaries is Solvent, (2) no Default or Event of Default
exists, (3) all representations and warranties contained herein and in
the other Credit Documents are true and correct in all material
respects, and (4) the Borrower is in compliance with each of the
financial covenants set forth in Section 7.9.
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(j) Fees. Payment by the Borrower to the Agent of an upfront
fee equal to 0.50% of the Revolving Committed Amount.
(k) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Credit
Agreement shall be reasonably satisfactory in form and substance to the
Agent and the Required Lenders.
5.2 Conditions to All Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) Notice of Borrowing. The Borrower shall have
delivered (i) in the case of any new Revolving Loan, a Notice of
Borrowing, duly executed and completed in accordance with the terms
hereof, (ii) in the case of any extension or conversion of a Loan, a
duly executed and completed Notice of Extension/Conversion by the time
specified in Section 3.2. or (iii) 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).
(b) Representations and Warranties. The representations
and warranties made by the Borrower herein or in any other Credit
Documents or which are contained in any certificate furnished at any
time under or in connection herewith shall be true and correct in all
material respects on and as of the date of such Extension of Credit as
if made on and as of such date (except for those which expressly relate
to an earlier date).
(c) No Default or Event of Default. No Default or Event
of Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date unless
such Default or Event of Default shall have been waived in accordance
with this Credit Agreement.
(d) No Material Adverse Effect. No circumstances, events
or conditions shall have occurred since the date of the audited
financial statements referenced in Section 6.1 which would have a
Material Adverse Effect.
(e) Immediately after giving effect to the making of such
Extension of Credit (and the application of the proceeds thereof), (i)
the sum of the aggregate outstanding principal amount of Revolving
Loans plus LOC Obligations shall not exceed the Revolving Committed
Amount, and (ii) the LOC Obligations shall not exceed the LOC Committed
Amount.
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Each request for Extension of Credit (including extensions and
conversions) and each acceptance by the Borrower of an Extension of Credit
(including extensions and conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a), (b), (c), (d) and (e)
of this subsection have been satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make
Extensions of Credit herein provided for, each Credit Party hereby represents
and warrants to the Agent and to each Lender that:
6.1 Financial Condition.
The financial statements delivered to the Agent pursuant to Section
5.1(b) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition and results from operations
of the entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments.
6.2 No Changes or Restricted Payments.
Since the date of the audited financial statements referenced
in Section 6.1, (a) there has been no circumstance, 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, and (b)
except as permitted herein or as identified on Schedule 6.2, (i) no dividends or
other distributions have been declared, paid or made upon the capital stock or
other equity interest in a Credit Party, (ii) no capital stock or other equity
interest in a Credit Party has been redeemed, retired, purchased or otherwise
acquired and (iii) nor has there been any prepayment, redemption, defeasance or
acquisition for value, or refund, refinance or exchange of any Funded Debt.
6.3 Organization; Existence; Compliance with Law.
The Borrower and each of its Subsidiaries (a) is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the legal 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, (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, in the aggregate, have a Material
Adverse Effect, and (d) is in compliance with all 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.
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6.4 Power; Authorization; Enforceable Loans.
Each Credit Party has the legal or other necessary power and authority,
and the legal right, to make, deliver and perform the Credit Documents to which
it is a party and has taken all necessary legal action to authorize the
execution, delivery and performance by it of the Credit Documents to which it is
a party. No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery or
performance of any Credit Documents by any Credit Party (other than those which
have been obtained) or with the validity or enforceability of any Credit
Document against such Credit Party (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of each Credit Party enforceable against such Credit 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, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law (including, without limitation, Regulation U or
Regulation X) or any Contractual Obligation of any Credit Party or any of its
Subsidiaries (except those as to which waivers or consents have been obtained,
and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or Contractual Obligation other than the Liens arising under or contemplated
in connection with the Credit Documents). None of the Credit Parties nor any of
its Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect.
6.6 No Material Litigation.
No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of any
Credit Party, threatened by or against, the Borrower or any of its Subsidiaries
or against any of their respective properties or revenues which (a) relate to
the Credit Documents or any of the transactions contemplated hereby or thereby,
or (b) if adversely determined, would reasonably be expected to have a Material
Adverse Effect.
47
6.7 No Default.
No Default or Event of Default has occurred and is continuing.
6.8 Ownership of Property; Liens.
The Borrower and each of 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.
The Borrower and each of 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.
6.10 No Burdensome Restrictions.
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.
The Borrower and each of its Subsidiaries (a) 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 (b) has paid (i) all taxes shown to be due and payable on said
returns, (ii) 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 (c) all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any (x) taxes, fees or other charges with
respect to which the failure to pay, in the aggregate, would not have a Material
Adverse Effect or (y) 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.
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6.12 ERISA
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no ERISA 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
ERISA 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" (as defined in Section 4001(a)(16) of ERISA), whether or
not vested, under each Single Employer Plan, as of the last annual
valuation date prior to the date on which this representation is made
or deemed made (determined, in each case, in accordance with Financial
Accounting Standards Board Statement 87, utilizing the actuarial
assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value
of the assets of such Plan.
(c) Neither the Borrower, nor any of its Subsidiaries 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, nor any of its Subsidiaries nor any ERISA
Affiliate would become subject to any withdrawal liability under ERISA
if the Borrower, any of its Subsidiaries 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, nor
any of its Subsidiaries 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.
(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 its Subsidiaries 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 its
Subsidiaries or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability.
49
(e) Neither the Borrower, nor any of its Subsidiaries,
nor any ERISA Affiliates has any material liability with respect to
"expected post-retirement benefit obligations" within the meaning of
the Financial Accounting Standards Board Statement 106. Each Plan which
is a welfare plan (as defined in Section 3(1) of ERISA) to which
Sections 601-609 of ERISA and Section 4980B of the Code apply has been
administered in compliance in all material respects of such sections.
6.13 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or 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 U, or Regulation X. 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. 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
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) The Borrower and each of 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.
(d) 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.
(e) The Borrower and each of 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 agency and
is in full compliance in all material respects with all applicable
rules and regulations of such commissions.
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6.14 Purpose of Extensions of Credit.
The Loans will be used solely (a) for working capital and (b) to
reimburse the Issuing Lender for any drawing under any Letter of Credit. The
Letters of Credit shall be used only for or in connection with appeal bonds,
reimbursement obligations arising in connection with surety and reclamation
bonds, reinsurance, domestic or international trade transactions and obligations
not otherwise aforementioned relating to transactions entered into by the
applicable account party in the ordinary course of business.
6.15 Environmental Matters.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) To the best knowledge of each of the Credit Parties, 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) To the best knowledge of each of the Credit Parties, 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 the Credit Parties,
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 judicial requirements
outstanding under any Environmental Law with respect to the Borrower or
any of its Subsidiaries, the Properties or the Businesses.
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(f) To the best knowledge of each of the Credit Parties, there
has been no release or, threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the
operations (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.
6.16 Subsidiaries.
Set forth on Schedule 6.16 is a complete and accurate list of all
Subsidiaries of each Credit Party. Information on Schedule 6.16 includes
jurisdiction of incorporation or organization, the number of shares of each
class of capital stock outstanding, the number and percentage of outstanding
shares of each class owned (directly or indirectly) by such Credit Party; and
the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding capital stock of all such Subsidiaries is validly
issued, fully paid and non-assessable and is owned by each such Credit Party,
directly or indirectly, free and clear of all Liens.
6.17 Year 2000 Compliance.
Each of the Credit Parties has (i) initiated a review and assessment of
all areas within its and each of its Subsidiaries' businesses and operations
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications may not be able to recognize and properly perform date-sensitive
functions after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem, and (iii) to date, implemented that plan in
accordance with that timetable. Based on the foregoing, each Credit Party has no
reason not to believe that all computer applications (including those of its
suppliers, vendors and customers) that are material to its or any of its
Subsidiaries' business and operations are reasonably expected before January 1,
2000 to be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to
the extent that a failure to do so would not reasonably be expected to have a
Material Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that on the Closing Date, and so
long as this Credit Agreement is in effect and until the Commitments have been
terminated, no Loans remain outstanding and all amounts owing hereunder or in
connection herewith have been paid in full, the Borrower and each of its
Subsidiaries shall:
52
7.1 Financial Statements.
Furnish, or cause to be furnished, to each of the Lenders:
(a) Audited Financial Statements. As soon as available, but in
any event within 120 days after the end of each fiscal year, an audited
consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the fiscal year and the related consolidated statements of
income, retained earnings, shareholders' equity and cash flows for the
year, audited by independent certified public accountants of nationally
recognized standing reasonably acceptable to the Required Lenders,
setting forth in each case in comparative form the figures for the
previous year, reported without a "going concern" or like qualification
or exception, or qualification indicating that the scope of the audit
was inadequate to permit such independent certified public accountants
to certify such financial statements without such qualification.
(b) Company-Prepared Financial Statements. As soon as
available, but in any event within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, a company-prepared
consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such quarter and related company-prepared consolidated
statements of income, retained earnings, shareholders' equity and cash
flows for such period and for the fiscal year to date in a format and
with detail sufficient to calculate the applicable financial covenants
setting forth in comparative form the consolidated figures for the
corresponding period or periods of the preceding fiscal year or the
portion of the fiscal year ending with such period, as applicable, in
each case subject to normal recurring year-end audit adjustments.
All such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein) and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change in the application of accounting principles as provided in
Section 1.3.
7.2 Certificates; Other Information.
Furnish, or cause to be furnished, to the Agent for distribution to the
Lenders:
(a) Accountant's Certificate and Reports. Concurrently with
the delivery of the financial statements referred to in subsection
7.1(a) above, a certificate of the independent certified public
accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such
certificate.
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(b) Officer's Certificate. Concurrently with the delivery of
the financial statements referred to in Sections 7.1(a) and 7.1(b)
above, a certificate of a Responsible Officer in the form of Schedule
7.2(b), (i) demonstrating compliance with the financial covenants
contained in Section 7.9 and (ii) stating that, to the best of such
Responsible Officer's knowledge and belief, (i) the financial
statements fairly present in all material respects the financial
condition of the parties covered by such financial statements, (ii)
during such period the Borrower and its Subsidiaries have observed or
performed the covenants and other agreements hereunder and under the
other Credit Documents relating to them, and satisfied the conditions
contained in this Credit Agreement to be observed, performed or
satisfied by them and (iii) such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate.
(c) Accountants' Reports. Promptly upon receipt, a copy of any
final (as distinguished from a preliminary or discussion draft)
"management letter" or other similar report submitted by independent
accountants or financial consultants to the Borrower or any of its
Subsidiaries in connection with any annual, interim or special audit.
(d) Public Information. Within thirty days after the same are
sent, copies of all reports (other than those otherwise provided
pursuant to subsection 7.1) and other financial information which the
Borrower or any of its Subsidiaries sends to its public stockholders,
and within thirty days after the same are filed, copies of all
financial statements and non-confidential reports which the Borrower or
any of its Subsidiaries may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental
Authority.
(e) Actuarial Reports. Promptly upon receipt, a copy of any
actuarial report submitted by the Borrower's independent actuarial firm
to the Borrower or any of its Subsidiaries relating to healthcare plans
for any state for which the Borrower or any of its Subsidiaries does
not have a guaranteed cost healthcare plan.
(f) Other Information. Promptly, such additional financial and
other information as the Agent, at the request of any Lender, may from
time to time reasonably request.
7.3 Notices.
Give notice to the Agent (which shall promptly transmit such notice to
each Lender) of:
(a) Defaults. Immediately after any Credit Party knows or has
reason to know thereof, the occurrence of any Default or Event of
Default.
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(b) Contractual Loans. Promptly, the initiation of any default
or event of default under any Contractual Obligation of the Borrower or
any of its Subsidiaries which would reasonably be expected to have a
Material Adverse Effect.
(c) Legal Proceedings. Promptly, any litigation, or any
investigation or proceeding (including without limitation, any
environmental proceeding) known to the Borrower or any of its
Subsidiaries, or any material development in respect thereof, affecting
the Borrower or any of its Subsidiaries which, if adversely determined,
would reasonably be expected to have a Material Adverse Effect.
(d) ERISA. Promptly, after any Responsible Officer of any
Credit Party knows or has reason to know of (i) any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against any of their
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
or any of its Subsidiaries or any ERISA Affiliate are 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; or (iv) any change in the funding status of any Plan that
reasonably could be expected to 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
Credit Parties 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 or any of its
Subsidiaries 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 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).
(e) Guarantee Cost Provision. Immediately after the
cancellation or termination of any guaranteed cost provision contained
in any healthcare agreement of the Borrower or any of its Subsidiaries.
(f) Other. Promptly, any other development or event which a
Responsible Officer determines could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Credit Parties propose to take with respect thereto.
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7.4 Payment of Loans.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with prudent business
practice (subject, where applicable, to specified grace periods) all material
obligations of the Borrower or any of its Subsidiaries of whatever nature
(including without limitation all taxes, assessments and governmental charges or
levies) and any additional costs that are imposed as a result of any failure to
so pay, discharge or otherwise satisfy such obligations, except when the amount
or validity of such obligations and costs is currently being contested in good
faith by appropriate proceedings and reserves, if applicable, in conformity with
GAAP with respect thereto have been provided on the books of the Borrower or any
of its Subsidiaries, as the case may be.
7.5 Conduct of Business and Maintenance of Existence.
(a) Continue to engage in business of the same general type as now
conducted by it on the date hereof, (b) preserve, renew and keep in full force
and effect its legal existence, (c) maintain all material rights, material
privileges, material licenses and material franchises necessary or desirable in
the normal conduct of its business and (d) comply with all Contractual
Obligations and Requirements of Law applicable to it except to the extent that
failure to comply therewith would not, in the aggregate, have a Material Adverse
Effect.
7.6 Maintenance of Property; Insurance.
Keep all material property useful and necessary in its business in
reasonably good working order and condition (ordinary wear and tear excepted);
maintain with financially sound and reputable insurance companies casualty,
liability and such other insurance (which may include plans of self-insurance)
with such coverage and deductibles, and in such amounts as may be consistent
with prudent business practice and in any event consistent with normal industry
practice (except to any greater extent as may be required by the terms of any of
the other Credit Documents); and furnish to the Agent, upon written request,
full information as to the insurance carried.
7.7 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and accounts in which full,
true and correct entries in conformity with GAAP and all Requirements
of Law shall be made of all dealings and transactions in relation to
its businesses and activities; and permit, during regular business
hours and upon reasonable notice by the Agent, the Agent to visit and
inspect any of its properties and examine and make abstracts (including
photocopies) from any of its books and records at any reasonable time,
and to discuss the business, operations, properties and financial and
other condition of the Borrower and any of its Subsidiaries with
officers and employees of the Borrower and any of its Subsidiaries and
with their independent certified public accountants. The cost of the
inspection referred to in the preceding sentence shall be for the
account of the Lenders, unless an Event of Default has occurred and is
continuing, in which case the cost of such inspection shall be for the
account of the Credit Parties.
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(b) In addition to the foregoing subsection (a), permit the
Agent to have agents or representatives conduct a "field audit" of its
inventory and accounts, including inspection of the inventory and
account records and a right to examine and make abstracts (including
photocopies) from its books and records relating to its inventory and
accounts on an annual basis, and more frequently after the occurrence
of an Event of Default. The cost of such "field audits" will be for the
account of, and will be promptly paid by, the Borrower.
7.8 Environmental Laws.
(a) Comply in all material respects with, and take reasonable
actions to ensure compliance in all material respects by all tenants and
subtenants of the Borrower or any of its Subsidiaries, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and take reasonable actions to ensure that
all such tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being
contested in good faith by appropriate proceedings and the failure to do
or the pendency of such proceedings would not reasonably be expected to
have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Agent and the
Lenders, and their respective employees, agents, officers and directors,
from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind
or nature known or unknown, contingent or otherwise, arising out of, or
in any way relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the
Borrower or any of its Subsidiaries or the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's
fees, investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this paragraph shall
survive repayment of the Loans and all other amounts payable hereunder,
and termination of the Commitments.
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7.9 Financial Covenants.
(a) Leverage Ratio. There shall be maintained with respect to
the Borrower and its Subsidiaries on a consolidated basis as of the end
of each fiscal quarter to occur through the Maturity Date, a Leverage
Ratio of not greater than 2.5 to 1.0.
(b) Fixed Charge Coverage Ratio. There shall be maintained
with respect to the Borrower and its Subsidiaries on a consolidated
basis as of the end of each fiscal quarter to occur through the
Maturity Date, a Fixed Charge Coverage Ratio of at least 2.5 to 1.0.
(c) Total Liabilities to Tangible Net Worth. There shall be
maintained with respect to the Borrower and its Subsidiaries on a
consolidated basis, as of the end of each fiscal quarter to occur
through the Maturity Date, a ratio of Total Liabilities to Tangible Net
Worth of not greater than 2.5 to 1.0.
(d) Liquidity. At all times the Borrower and its Subsidiaries
shall maintain a balance of cash and Cash Equivalents of at least
$1,000,000.
7.10 Use of Proceeds.
Extensions of Credit will be used solely for the purposes provided in
Section 6.14.
7.11 Additional Guaranties.
At any time any Person becomes a Domestic Subsidiary of the
Borrower, the Borrower will promptly notify the Agent thereof and cause
such Domestic Subsidiary (i) to become a Guarantor hereunder by (A)
execution of a Joinder Agreement and (B) delivery of supporting
resolutions, incumbency certificates, corporation formation and
organizational documentation and opinions of counsel as the Agent may
reasonably request.
7.12 Subsidiaries.
The Borrower shall, directly or indirectly, own at all times the
capital stock or partnership interest, as applicable, of each of its
Subsidiaries in the percentage as set forth on Schedule 6.16 (or such greater
percentage as may be hereafter acquired by the Borrower to the extent permitted
hereunder).
7.13 Year 2000 Compliance.
The Credit Parties will promptly notify the Agent in the event any
Credit Party discovers or determines that any computer application (including
those of its suppliers, vendors and customers) that is material to its or any of
its Subsidiaries' business and operations will not be Year 2000 Compliant,
except to the extent that such failure would not reasonably be expected to have
a Material Adverse Effect.
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SECTION 8
NEGATIVE COVENANTS
Each Credit Party covenants and agrees that on the Closing Date, and so
long as this Credit Agreement is in effect and until the Commitments have been
terminated, no Loans remain outstanding and all amounts owing hereunder or in
connection herewith, have been paid in full, neither the Borrower nor any of its
Subsidiaries shall:
8.1 Indebtedness.
Contract, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness arising or existing under this Credit
Agreement and the other Credit Documents;
(b) Indebtedness set forth in Schedule 8.1, and renewals,
refinancings and extensions thereof on terms and conditions no less
favorable to the Borrower or any of its Subsidiaries, as appropriate,
than such existing Indebtedness;
(c) Indebtedness owing by one Credit Party to another Credit
Party;
(d) Indebtedness assumed in connection with a Permitted
Acquisition (so long as such Indebtedness (i) has been fully disbursed
by the lender and cannot be reborrowed following repayment and (ii) was
not incurred in anticipation of or in connection with the respective
acquisition) and renewals, refinancings and extensions thereof on terms
and conditions no less favorable to the Borrower or any of its
Subsidiaries, as appropriate, than the terms and conditions of the
Credit Agreement and the other Credit Documents, all of which
Indebtedness permitted by this Section 8.1(d), (A) in the case of
unsecured Indebtedness shall not exceed the aggregate principal amount
of $5,000,000 at any one time and (B) in the case of secured
Indebtedness, together with the Indebtedness permitted by Section
8.1(f), shall not exceed the aggregate principal amount of $1,000,000
at any one time;
(e) Subordinated Indebtedness owed to the seller in connection
with any acquisition permitted by Section 8.5 constituting part of the
purchase price thereof (so long as no more than twenty-five percent
(25%) of the principal amount of such Subordinated Indebtedness shall
be required to be repaid prior to the Maturity Date), all of which
Subordinated Indebtedness permitted by this Section 8.1(e) together
with the Indebtedness permitted by Section 8.1(d) shall not exceed the
aggregate principal amount of $10,000,000 at any one time;
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(f) Indebtedness with respect to Capital Leases, purchase
money Indebtedness or other unsecured Indebtedness which does not
exceed together with the secured Indebtedness permitted by Section
8.1(d), the aggregate principal amount of $500,000 at any time;
(g) Indebtedness and obligations owing under Hedging
Agreements entered into in the ordinary course of business to manage
existing or anticipated risks and not for speculative purposes; and
(h) (i) Indebtedness in respect of letters of credit issued by
NationsBank and (ii) indebtedness in respect of letters of credit
issued by financial institutions other than NationsBank to secure
excess liability obligations of the Borrower and its Subsidiaries in an
aggregate principal amount up to $500,000 at any one time outstanding.
8.2 Liens.
Contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective property or assets of any kind (whether real
or personal, tangible or intangible), whether now owned or hereafter acquired,
except for Permitted Liens.
8.3 Nature of Business.
Alter the character of their business from that, or substantially
similar to that, conducted as of the Closing Date or engage in any business
other than the business conducted as of the Closing Date.
8.4 Consolidation, Merger, Sale or Purchase of Assets.
(a) Dissolve, liquidate or wind up their affairs or enter into
any transaction of merger or consolidation; provided, however that (i)
the Borrower may merge or consolidate with any Subsidiary of the
Borrower so long as the Borrower shall be the continuing or surviving
corporation and (ii) any Credit Party other than the Borrower may merge
or consolidate with any other Credit Party;
(b) Sell, lease, transfer or otherwise dispose of any Property
(including without limitation pursuant to any sale/leaseback
transaction) except (a) any Credit Party may sell, transfer or
otherwise dispose of any or all of its assets to another Credit Party;
(b) for the sale or other disposition of any Property that, in the
reasonable judgment of the Borrower has become uneconomic, obsolete or
worn out, and which is sold or disposed of in the ordinary course of
business; and (c) the sale or other disposition of any Property the
aggregate amount of net proceeds received in respect of which shall not
exceed $2,000,000 during the term of this Credit Agreement; and
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(c) Purchase or otherwise acquire (in a single transaction or
a series of related transactions) all or substantially all of the
assets or business of any Person except for Permitted Acquisitions.
8.5 Advances, Investments and Loans.
Lend money or extend credit or make advances to any Person, or purchase
or acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, or otherwise make an Investment in, any Person
except for Permitted Investments.
8.6 Restricted Payments.
Directly or indirectly, (a) declare or pay any dividends or make any
other distribution upon any shares of its capital stock of any class or other
equity interest other than (i) stock dividends and (ii) dividends by
Subsidiaries of the Borrower to the Borrower or another Credit Party, as
applicable, (b) purchase, redeem or otherwise acquire or retire or make any
provisions for redemption, acquisition or retirement of any shares of its
capital stock of any class or other equity interest or any warrants, options or
other rights to purchase any such shares or equity interest other than (i)
Permitted Investments and (ii) a repurchase or redemption by the Borrower of
shares of its capital stock owned by employees or former employees of the
Borrower so long as such repurchases or redemptions of capital stock shall not
exceed $1,500,000 in the aggregate during the term of this Credit Agreement; or
(c) except with respect to the Loans as permitted hereunder, make any
prepayment, redemption, defeaseance or acquisition for value 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), or refund,
refinance or exchange of any Funded Debt.
8.7 Transactions with Affiliates.
Except as set forth on Schedule 8.7 and except for (a) loans or
advances to employees in the ordinary course of business (to the extent
permitted by clause (vi) of the definition of "Permitted Investments"), (b) the
performance of the Borrower's or any Subsidiary's obligations under any
employment contract or any other similar arrangement heretofore or hereafter
entered into in the ordinary course of business, (c) the payment of compensation
to employees, officers or directors in the ordinary course of business , (d)
customary fees or expenses paid to directors in the ordinary course of business
and (e) any repurchase or redemption of capital stock that is permitted by
Section 8.6, enter into or permit to exist any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder, Subsidiary or Affiliate other than where such
transactions are on terms and conditions substantially as favorable as would be
obtainable in a comparable arm's-length transaction with a Person other than an
officer, director, shareholder, Subsidiary or Affiliate.
8.8 Fiscal Year.
Change its fiscal year.
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8.9 Limitation on Restrictions.
Create or permit to exist any restriction of any kind on the ability of
any Subsidiary to (i) pay dividends or make any other distributions to the
Borrower or any Credit Party, (ii) pay Indebtedness owed to the Borrower, (iii)
make loans or advances to the Borrower or (iv) except for any lease of a
Subsidiary with respect to office space, transfer any of its properties or
assets to the Borrower.
8.10 Sale Leasebacks.
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 the Borrower 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.
8.11 No Further Negative Pledges.
Except 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), enter into, assume or
become subject to any agreement prohibiting or otherwise restricting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation.
8.12 Capital Expenditures.
Make or incur Capital Expenditures in excess of $12,000,000 during any
fiscal year of the Borrower.
8.13 Management.
Make or permit to occur more than one change in the makeup of the
Management Group as of the Closing Date, except as may be approved in writing in
advance by the Required Lenders; provided, however, in the event of the death of
two or more members of the Management Group, the Borrower shall have a period of
30 days to replace such deceased members of the Management Group with
individuals satisfactory to the Required Lenders, in their sole discretion,
before the Borrower shall be deemed to have violated this Section 8.13.
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8.14 Subordinated Debt.
Effect or permit any change in or amendment to any document or
instrument pertaining to the subordination, or terms of payment of any
Subordinated Indebtedness, effect or permit any change in or amendment to any
document or instrument pertaining to the events of default of any Subordinated
Indebtedness if the effect of any such change or amendment is to make such
events of default more restrictive on the applicable Credit Party, or make any
payment of principal of or interest on or in redemption, retirement or
repurchase of any Subordinated Indebtedness, except for (a) the scheduled
payments of interest with respect to the Subordinated Indebtedness and (b) the
principal payments permitted by Section 8.1(e) so long as immediately before and
after giving effect to any of such payments, no Default or Event of Default
exists.
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. The Borrower 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
of the Borrower or any Subsidiary made or deemed to be made herein, in
any of the other Credit Documents, or in any statement or 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.
(i) a default in the due performance or observance of
any term, covenant or agreement contained in Section 7.5(a),
7.5(b), 7.9, 7.10 or 8.1 through 8.14, inclusive,
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(ii) default in the due performance or observance of
any term, covenant or agreement contained in Section 7.3(a) or
7.3(e) and such default shall continue unremedied for a period
of at least 5 days after a Responsible Officer becoming aware
of such default, or
(iii) a 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) or (c)(ii) 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 the
Borrower 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) any Credit Document shall fail to be in
full force and effect or to give the Agent and/or the Lenders any
material part of the Liens, rights, powers and privileges purported to
be created thereby; or
(e) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to the Borrower or any of its Subsidiaries; or
(f) 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) of any
obligation or condition of any contract or lease resulting in
liability of $250,000 or more in the aggregate for the
Borrower or any of its Subsidiaries; or
(ii) With respect to other Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) of the
Borrower or any of its Subsidiaries in an aggregate principal
amount in excess of $250,000, (A) (1) the Borrower or any of
its Subsidiaries shall 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
(after the giving of notice or lapse of time if required), any
such Indebtedness to become due prior to its 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
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(g) Judgments. One or more judgments or decrees shall be
entered against one or more of the Credit Parties involving a liability
of $250,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged
coverage and has the ability to perform) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 45 days from the entry thereof; or
(h) ERISA. Any of the following events or conditions, if such
event or condition could reasonably be expected to have a Material
Adverse Effect: (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 or any of its Subsidiaries or any
ERISA Affiliate in favor of the PBGC or a Plan; (2) an ERISA 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) an ERISA 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 or any of its Subsidiaries 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 of (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 or any of its
Subsidiaries 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
or any of its Subsidiaries or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability; or
(i) Ownership. There shall occur a Change of Control.
(j) Workers Compensation. There shall occur a Material Adverse
Change to the Workers' Compensation Policy.
(k) Health Care Agreement. There shall occur a Material
Adverse Change to the Health Care Agreement.
(l) Cafeteria Plan. Any of the following events shall occur:
(a) the revocation by the Internal Revenue Service of the tax qualified
status of the Borrower's 401(k) retirement plan and/or (b) the Internal
Revenue Service determines that the "cafeteria plan" of the Borrower
does not meet the requirements of Section 125 of the Code.
(m) Other Health Care Agreements. There shall occur a Material
Adverse Change to any Other Health Care Agreement.
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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 in writing by the
Required Lenders (or the Lenders as may be required hereunder), the Agent shall,
upon the request and direction of the Required Lenders, by written notice to the
Borrower take any of the following actions:
(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 Credit Parties to pay (and
the Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(e), they 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(e) 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
presentment, demand, protest or the giving of any notice or other action by the
Agent or the Lenders, all of which are hereby waived by the Borrower.
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SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as Agent
(in such capacity, 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 the Borrower 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 to have assumed any obligation or relationship of
agency or trust with or for the Borrower or any of its Affiliates.
10.2 Delegation of Duties.
The Agent may execute any of its 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 the
Borrower 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 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 Borrower
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 of the existence or possible existence of any Default or Event of
Default or to inspect the properties, books or records of the Borrower or its
Affiliates.
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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 the Borrower, 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).
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 the Borrower 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 the
Borrower or any of its 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 or its 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 and its 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 or its respective
Affiliates which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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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 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.
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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 twenty (20) days' written
notice to the Borrower and the Lenders. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Agent. 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, 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) with
receipt confirmed, 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 or telecopy numbers set forth on
Schedule 11.1 or at such other address as such party may specify by written
notice to the other parties hereto.
11.2 Right of Set-Off.
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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 the Borrower 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 3.12 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) 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 and obligations without
prior written consent of the 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.
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its
Loans, its Notes, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of $1,000,000
in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit 11.3(b) hereto, together
with any Note subject to such assignment and a processing fee
of $3,500.
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Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any
assignment pursuant to this Section 11.3(b), the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of
Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in
Section 11.1 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 11.3(b) hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment or its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in
Sections 3.7 through 3.12, inclusive, and the right of set-off
contained in Section 11.2, and (iv) the Borrower shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement, and such Lender
shall retain the sole right to enforce the obligations of the Borrower
relating to its Loans and its Notes and to approve any amendment,
modification, or waiver of any provision of this Credit Agreement
(other than amendments, modifications, or waivers decreasing the amount
of principal of or the rate at which interest is payable on such Loans
or Notes, extending any scheduled principal payment date or date fixed
for the payment of interest on such Loans or Notes, or extending its
Commitment).
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(f) Notwithstanding any other provision set forth in this
Credit Agreement, any Lender may at any time assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 11.14 hereof.
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 and the
Borrower 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 the
Borrower in any case shall entitle the Borrower 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, subject to the limitation contained
in a separate agreement between the Agent and the Borrower) 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 Borrower under
this Credit Agreement and (B) after the occurrence of a Default or Event of
Default, 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).
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11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any of the other Credit Documents,
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, however, that:
(a) no such amendment, change, waiver, discharge or
termination shall, without the consent of each Lender directly affected
thereby, (i) 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) thereon or fees hereunder,
(ii) extend the final maturity of any Loan or of any reimbursement
obligation, or any portion thereof, arising from drawings under Letters
of Credit, or (iii) reduce or waive the principal amount on any Loan or
of any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit;
(b) no such amendment, change, waiver, discharge or
termination shall, without the consent of each Lender affected thereby,
(i) increase the Commitment 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 Commitments shall
not constitute a change in the terms of any Commitment of any Lender),
(ii) release all or substantially all of the Guarantors from the
Guaranty Obligations hereunder (iii) amend, modify or waive any
provision of this Section 11.6 or Section 3.5, 3.9, 3.10, 3.11, 3.12,
9.1(a), 11.2, 11.3, 11.5 or 11.9, (iv) reduce any percentage specified
in, or otherwise modify, the definition of "Required Lenders," or (v)
consent to the assignment or transfer by the Borrower of any of its
rights and obligations under (or in respect of) the Credit Documents to
which it is a party;
(c) no provision of Section 10 may be amended without the
consent of the Agent; and
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(d) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
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 3.8 (subject to the limitation set forth in such Section 3.8), Section
3.10 (subject to the limitation set forth in such Section 3.10), Section 10.7 or
Section 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 Revolving Commitments hereunder, and all representations
and warranties made by the Borrower 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 FLORIDA. 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 Florida, or of the United States
located in the State of Florida, and, by execution and delivery of this
Credit Agreement, the Borrower hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. The Borrower 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) Business 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 the Borrower in any other jurisdiction.
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(b) The Borrower 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 AND THE BORROWER 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; Termination.
(a) This Credit Agreement shall become effective at such time
on or after the Closing Date when it shall have been executed by the
Borrower and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall
be binding upon and inure to the benefit of the Borrower, the Agent and
each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans,
LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding, all of the obligations hereunder have been
irrevocably satisfied in full and all of the Commitments hereunder
shall have expired or been terminated.
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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 the Borrower
(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 the Borrower 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 the Borrower; (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 Borrower 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 Borrower.
11.15 Time
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight Time, as the case may be, unless specified otherwise.
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.
[Signature Page to Follow]
77
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: STAFF LEASING, INC.,
a Florida corporation
By:
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
GUARANTORS: STAFF ACQUISITION, INC.,
a Delaware corporation
By:
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF INSURANCE, INC., a Florida corporation
By:
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF LEASING OF TEXAS II, L.P.,
a Delaware limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
(Signatures Continue)
STAFF LEASING, L.P., a Delaware
limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF LEASING II, L.P., a Delaware
limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF LEASING III, L.P., a Delaware
limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
(Signatures Continue)
STAFF LEASING IV, L.P., a Delaware
limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF LEASING V, L.P., a Delaware
limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF LEASING OF GEORGIA, L.P.,
a Delaware limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
(Signatures Continue)
STAFF LEASING OF XXXXXXX XX, L.P.,
a Delaware limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF LEASING OF GEORGIA III, L.P.,
a Delaware limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STAFF LEASING OF TEXAS, L.P.,
a Delaware limited partnership
By its sole general partner:
Staff Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
(Signatures Continue)
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
STATE OF
---------------------
COUNTY OF
--------------------
The foregoing instrument was acknowledged before me this _____ day of
June__, 1999 by _______________________________, as an officer of the companies
set forth on the signature pages attached hereto. He/she personally appeared
before me and is personally known to me or produced ___________________ as
identification.
Notary:
------------------------------
[NOTARIAL SEAL] Print Name:
--------------------------
Notary Public, State of
--------------
STATE OF
---------------------
COUNTY OF
--------------------
The foregoing instrument was acknowledged before me this _____ day of
June__, 1999 by _______________________________, _________________ of
NationsBank, N.A., a national banking association. He/she personally appeared
before me and is personally known to me or produced ___________________ as
identification.
Notary:
------------------------------
[NOTARIAL SEAL] Print Name:
--------------------------
Notary Public, State of
--------------
Schedule 1.1(d)
to
Credit Agreement
LENDERS AND COMMITMENT PERCENTAGES
----------------------------------
Revolving Loan
Revolving Commitment Commitment
Contact Committed Amount Percentage
------- ---------------- ----------
NationsBank, N.A. $10,000,000 100%
000 Xxxx Xxxxxxx Xxxx.
0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Total $10,000,000 100%
Schedule 2.1(b)(i)
to
Credit Agreement
FORM OF
NOTICE OF BORROWING
TO: NATIONSBANK, N.A., as Agent
000 Xxxx Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
RE: Credit Agreement dated as of July 26, 1999 among Staff Leasing, Inc.
(the "Borrower"), the Domestic Subsidiaries of the Borrower,
NationsBank, N.A., as Agent and the Lenders party thereto (as the same
may be amended, modified, extended or restated from time to time, the
"Credit Agreement")
DATE: _____________, ____
--------------------------------------------------------------------------------
1. This Notice of Borrowing is made pursuant to the terms of the Credit
Agreement. All capitalized terms used herein unless otherwise defined
shall have the meanings set forth in the Credit Agreement.
2. Please be advised that the Borrower is requesting Revolving Loans in
the amount of $_______________ to be funded on ____________, ____ at
the interest rate option set forth in paragraph 3 below. Subsequent to
the funding of the requested Revolving Loans, the aggregate amount of
Revolving Loans plus LOC Obligations outstanding will be
$_______________, which is less than or equal to the Revolving
Committed Amount.
3. The interest rate option applicable to the requested Revolving Loans
shall be:
a. ________ the Base Rate plus Applicable Percentage
b. ________ the Eurodollar Rate plus Applicable Percentage for an
Interest Period of:
________ one month
________ two months
________ three months
4. The representations and warranties made by the Borrower in any Credit
Document are true and correct in all material respects at and as if
made on the date hereof except to the extent they expressly relate to
an earlier date.
5. As of the date hereof, no Default or Event of Default has occurred and
is continuing or would be caused by this Notice of Borrowing.
6. No Material Adverse Effect has occurred since the Closing Date.
STAFF LEASING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Schedule 2.1(e)
to
Credit Agreement
FORM OF
REVOLVING NOTE
$
--------------------- ----------------------,--------
FOR VALUE RECEIVED, Staff Leasing, Inc., a Florida corporation (the
"Borrower"), hereby promises to pay to the order of ___________, its successors
and assigns (the "Lender"), at the office of NationsBank, N.A. (the "Agent") as
set forth in that certain Credit Agreement dated as of June__, 1999 between the
Borrower, the Domestic Subsidiaries of the Borrower, the Lenders party thereto
(including the Lender) and NationsBank, N.A., as Agent (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), the principal
sum of _________ Dollars ($__________) (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Revolving Loans made by the Lender to
the Borrower under the Credit Agreement), in lawful money of the United States
of America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Revolving Loan, at such office, in like money and
funds, for the period commencing on the date of such Revolving Loan until such
Revolving Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement and evidences Revolving Loans made by the Lender thereunder.
Capitalized terms used in this Revolving Note and not otherwise defined shall
have the respective meanings assigned to them in the Credit Agreement and the
terms and conditions of the Credit Agreement are expressly incorporated herein
and made a part hereof.
The Credit Agreement provides for the acceleration of the maturity of
the Revolving Loans evidenced by this Revolving Note upon the occurrence of
certain events (and for payment of collection costs in connection therewith) and
for prepayments of Revolving Loans upon the terms and conditions specified
therein. In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorney fees.
The date, amount, type, interest rate and duration of Interest Period
(if applicable) of each Revolving Loan made by the Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by the
Lender on its books; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing hereunder or under this Revolving
Note in respect of the Revolving Loans to be evidenced by this Revolving Note,
and each such recordation or endorsement shall be conclusive and binding absent
manifest error.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF FLORIDA.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
executed as of the date first above written.
STAFF LEASING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Schedule 3.2
to
Credit Agreement
FORM OF
NOTICE OF EXTENSION/CONVERSION
TO: NATIONSBANK, N.A., as Agent
000 Xxxx Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
RE: Credit Agreement dated as of July 26, 1999 among Staff Leasing, Inc.
(the "Borrower"), the Domestic Subsidiaries of the Borrower,
NationsBank, N.A., as Agent and the Lenders party thereto (as the same
may be amended, modified, extended or restated from time to time, the
"Credit Agreement")
DATE: _____________, ____
1. This Notice of Extension/Conversion is made pursuant to the terms of
the Credit Agreement. All capitalized terms used herein unless
otherwise defined shall have the meanings set forth in the Credit
Agreement.
2. Please be advised that the Borrower is requesting that a portion of the
current outstanding Revolving Loans in the amount of $________________
currently accruing interest at __________ be continued or converted as
of _____________ at the interest rate option set forth in paragraph 3
below.
3. The interest rate option applicable to the extension or conversion of
all or part of the existing Revolving Loans shall be:
a. ________ the Base Rate plus Applicable Percentage
b. ________ the Eurodollar Rate plus Applicable Percentage for an
Interest Period of:
________ one month
________ two months
________ three months
STAFF LEASING, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Schedule 7.2(b)
to
Credit Agreement
FORM OF
OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, ____.
I, ______________________, chief financial officer of Staff Leasing,
Inc. (the "Borrower") hereby certify on behalf of the Borrower and not in my
individual capacity that, with respect to that certain Credit Agreement dated as
of July 26, 1999 (as it may be amended, modified, extended or restated from time
to time, the "Credit Agreement"; all of the defined terms in the Credit
Agreement are incorporated herein by reference) among the Borrower, the Domestic
Subsidiaries of the Borrower, the Lenders party thereto and NationsBank, N.A.,
as Agent:
a. Attached hereto as Schedule 1 are calculations
demonstrating compliance by the Borrower with the financial covenants
contained in Section 7.9 of the Credit Agreement as of the end of the
fiscal period referred to above.
b. No Default or Event of Default has occurred under the
Credit Agreement1.
c. The Borrower - prepared quarterly financial statements
which accompany this certificate fairly present in all material
respects the financial condition of the Borrower and its Subsidiaries
and has been prepared in accordance with GAAP, subject to changes
resulting from normal year-end audit adjustments.
This ______ day of ___________, ____.
STAFF LEASING, INC.
By:
---------------------------------
Name:
-------------------------------
Title: Chief Financial Officer
----------
1 If a Default or Event of Default shall have occurred an explanation of such
Default or Event of Default shall be provided on a separate page together with
an explanation of the action taken or proposed to be taken by the Borrower with
respect thereto.
Schedule 7.11
to
Credit Agreement
FORM OF
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this "Agreement"), dated as of _____________,
199_, is entered into between _____________________, a ___________________ (the
"New Subsidiary") and NATIONSBANK, N.A., in its capacity as Agent (the "Agent")
under that certain Credit Agreement, dated as of July 26, 1999 among Staff
Leasing, Inc. (the "Borrower"), the Domestic Subsidiaries of the Borrower, the
Lenders party thereto and the Agent (as the same may be amended, modified,
extended or restated from time to time, the "Credit Agreement"). All capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Credit Agreement.
The New Subsidiary and the Agent, for the benefit of the Lenders,
hereby agree as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the New Subsidiary will be deemed to be a
Credit Party under the Credit Agreement and a "Guarantor" for all purposes of
the Credit Agreement and shall have all of the obligations of a Guarantor
thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Credit Agreement, including without
limitation (a) all of the representations and warranties of the Credit Parties
set forth in Section 6 of the Credit Agreement, (b) all of the affirmative and
negative covenants set forth in Sections 7 and 8 of the Credit Agreement and (c)
all of the guaranty obligations set forth in Section 4 of the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
New Subsidiary hereby guarantees, jointly and severally with the other
Guarantors, to the Agent and the Lenders, as provided in Section 4 of the Credit
Agreement, the prompt payment and performance of the Guaranteed Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof and
agrees that if any of the Guaranteed Obligations are not paid or performed in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise), the New Subsidiary will, jointly and severally
together with the other Guarantors, promptly pay and perform 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 Guaranteed 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.
3. The address of the New Subsidiary for purposes of Section 11.1 of
the Credit Agreement is as follows:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
4. The New Subsidiary hereby waives acceptance by the Agent and the
Lenders of the guaranty by the New Subsidiary under the Credit Agreement upon
the execution of this Agreement by the New Subsidiary.
5. This 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.
6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF FLORIDA.
IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be
duly executed by its authorized officer, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.
[NEW SUBSIDIARY]
By:___________________________
Name:_________________________
Title:________________________
Acknowledged and accepted:
NATIONSBANK, N.A., as Agent
By:_____________________________
Name:___________________________
Title:__________________________
Schedule 11.1
to
Credit Agreement
NOTICES
Notices:
For any Credit Party to:
[name of Credit Party]
c/o Staff Leasing, Inc.
600 000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Agent:
NationsBank, N.A.
000 Xxxx Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Lenders:
See addresses on Schedule 1.1(d)
Schedule 11.3(b)
to
Credit Agreement
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to that certain Credit Agreement dated as of July 26,
1999 among Staff Leasing, Inc. (the "Borrower"), the Subsidiaries of the
Borrower, the Lenders party thereto and NationsBank, N.A., as Agent (as the same
may be amended, modified, extended or restated from time to time, the "Credit
Agreement"). All capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Credit Agreement.
1. The Assignor (as defined below) hereby sells and assigns, without
recourse, to the Assignee (as defined below), and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective as of effective date
of the assignment as designated below (the "Effective Date"), the interests set
forth below (the "Assigned Interest") in the Assignor's rights and obligations
under the Credit Agreement, including, without limitation, (a) the interests set
forth below in the Revolving Commitment Percentage of the Assignor on the
Effective Date and (b) the Loans owing to the Assignor in connection with the
Assigned Interest which are outstanding on the Effective Date. The purchase of
the Assigned Interest shall be at par and periodic payments made with respect to
the Assigned Interest which (i) accrued prior to the Effective Date shall be
remitted to the Assignor and (ii) accrue from and after the Effective Date shall
be remitted to the Assignee. From and after the Effective Date, the Assignee, if
it is not already a Lender under the Credit Agreement, shall become a "Lender"
for all purposes of the Credit Agreement and the other Credit Documents and, to
the extent of such assignment, the assigning Lender shall be relieved of its
obligations under the Credit Agreement.
2. The Assignor represents and warrants to the Assignee that it is the
holder of the Assigned Interest, and the Loans and Participation Interests
related thereto, and it has not previously transferred or encumbered such
Assigned Interest, Loans or Participation Interests.
3. The Assignee represents and warrants to the Assignor that it is an
Eligible Assignee.
4. This Assignment shall be effective only upon (a) the consent of the
Borrower and the Agent to the extent required under Section 11.3(b) of the
Credit Agreement and (b) delivery to the Agent of this Assignment Agreement
together with the transfer fees, if applicable, set forth in Section 11.3(b) of
the Credit Agreement.
5. This Assignment shall be governed by and construed in accordance
with the laws of the State of Florida.
6. Terms of Assignment
(a) Date of Assignment __________________
(b) Legal Name of Assignor __________________
(c) Legal Name of Assignee __________________
(d) Effective Date of Assignment __________________
(e) Revolving Commitment
Percentage assigned _____________%
(f) Total Revolving Loans
outstanding as of Effective Date $______________
(g) Principal Amount of Revolving
Loans assigned on Effective
Date (the amount set forth
in (f) multiplied by the
percentage set forth in (e)) $______________
(h) Revolving Committed Amount $______________
(i) Principal Amount of Revolving
Committed Amount Assigned on
the Effective Date (the amount
set forth in (h) multiplied by
the percentage set forth in (e)) $______________
The terms set forth above are hereby agreed to:
____________________________ , as Assignor
By:________________________________
Name:______________________________
Title:_____________________________
____________________________ , as Assignee
By:________________________________
Name:______________________________
Title:_____________________________
CONSENTED TO (if applicable):
STAFF LEASING, INC.
By:________________________________
Name:______________________________
Title:_____________________________
NATIONSBANK, N.A., as
Agent
By:________________________________
Name:______________________________
Title:_____________________________
