Exhibit (b)
[EXECUTION COPY]
CREDIT AGREEMENT
Dated as of December 19, 1995
among
XXXX MANUFACTURING CO.,
as Borrower,
THE SUBSIDIARIES
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N.A.,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................ 1
1.1 Definitions................................................................................. 1
1.2 Computation of Time Periods................................................................ 25
1.3 Accounting Terms........................................................................... 25
SECTION 2 CREDIT FACILITIES..................................................................... 26
2.1 Revolving Loans............................................................................ 26
2.2 Letter of Credit Subfacility............................................................... 28
2.3 Term Loan.................................................................................. 34
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................ 37
3.1 Default Rate............................................................................... 37
3.2 Extension and Conversion................................................................... 37
3.3 Prepayments................................................................................ 38
3.4 Termination and Reduction of Revolving Committed Amount.................................... 40
3.5 Fees....................................................................................... 41
3.6 Capital Adequacy........................................................................... 42
3.7 Inability To Determine Interest Rate....................................................... 42
3.8 Illegality................................................................................. 43
3.9 Requirements of Law........................................................................ 43
3.10 Taxes...................................................................................... 44
3.11 Indemnity.................................................................................. 47
3.12 Pro Rata Treatment......................................................................... 47
3.13 Sharing of Payments........................................................................ 48
3.14 Place and Manner of Payments............................................................... 49
3.15 Mandatory Assignment....................................................................... 50
SECTION 4 GUARANTY.............................................................................. 50
4.1 The Guarantee.............................................................................. 50
4.2 Obligations Unconditional.................................................................. 51
4.3 Reinstatement.............................................................................. 52
4.4 Certain Additional Waivers................................................................. 52
4.5 Remedies................................................................................... 52
4.6 Rights of Contribution..................................................................... 53
4.7 Continuing Guarantee....................................................................... 54
SECTION 5 CONDITIONS............................................................................ 54
5.1 Closing Conditions......................................................................... 54
5.2 Conditions to all Extensions of Credit..................................................... 55
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................ 57
6.1 Financial Condition........................................................................ 57
6.2 No Change.................................................................................. 58
6.3 Organization; Existence; Compliance with Law............................................... 58
6.4 Power; Authorization; Enforceable Obligations.............................................. 58
6.5 No Legal Bar............................................................................... 59
6.6 No Material Litigation..................................................................... 59
6.7 No Default................................................................................. 59
6.8 Ownership of Property; Liens............................................................... 59
6.9 Intellectual Property...................................................................... 59
6.10 No Burdensome Restrictions................................................................. 60
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6.11 Taxes...................................................................................... 60
6.12 ERISA...................................................................................... 60
6.13 Governmental Regulations, Etc.............................................................. 62
6.14 Subsidiaries............................................................................... 63
6.15 Purpose of Loans and Letters of Credit..................................................... 63
6.16 Environmental Matters...................................................................... 63
6.17 Schedule 13E-4..............................................................................64
SECTION 7 AFFIRMATIVE COVENANTS................................................................. 64
7.1 Information Covenants...................................................................... 65
7.2 Preservation of Existence and Franchises................................................... 68
7.3 Books and Records.......................................................................... 68
7.4 Compliance with Law........................................................................ 68
7.5 Payment of Taxes and Other Indebtedness.................................................... 68
7.6 Insurance.................................................................................. 68
7.7 Maintenance of Property.................................................................... 69
7.8 Performance of Obligations................................................................. 69
7.9 Use of Proceeds............................................................................ 69
7.10 Audits/Inspections......................................................................... 69
7.11 Financial Covenants........................................................................ 69
7.12 Additional Credit Parties.................................................................. 71
7.13 Ownership of Subsidiaries; Limitation of Foreign
Operations................................................................................. 72
SECTION 8 NEGATIVE COVENANTS.................................................................... 72
8.1 Indebtedness............................................................................... 72
8.2 Liens...................................................................................... 74
8.3 Nature of Business......................................................................... 74
8.4 Consolidation, Merger, Sale or Purchase
of Assets, etc............................................................................. 74
8.5 Advances, Investments, Loans, etc.......................................................... 75
8.6 Restricted Payments........................................................................ 75
8.7 Prepayments of Indebtedness, etc........................................................... 76
8.8 Transactions with Affiliates............................................................... 76
8.9 Fiscal Year................................................................................ 76
8.10 Limitation on Restrictions on Subsidiary
Dividends and Other Distributions, etc..................................................... 76
8.11 Issuance and Sale of Subsidiary Stock...................................................... 77
8.12 Sale Leasebacks............................................................................ 77
8.13 No Further Negative Pledges................................................................ 77
8.14 Operating Lease Obligations................................................................ 77
SECTION 9 EVENTS OF DEFAULT..................................................................... 78
9.1 Events of Default.......................................................................... 78
9.2 Acceleration; Remedies..................................................................... 80
SECTION 10 AGENCY PROVISIONS..................................................................... 81
10.1 Appointment................................................................................ 81
10.2 Delegation of Duties....................................................................... 82
10.3 Exculpatory Provisions..................................................................... 82
10.4 Reliance on Communications................................................................. 83
10.5 Notice of Default.......................................................................... 83
10.6 Non-Reliance on Agent and Other Lenders.................................................... 83
10.7 Indemnification............................................................................ 84
10.8 Agent in its Individual Capacity........................................................... 85
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10.9 Successor Agent............................................................................ 85
SECTION 11 MISCELLANEOUS......................................................................... 85
11.1 Notices.................................................................................... 85
11.2 Right of Set-Off........................................................................... 86
11.3 Benefit of Agreement....................................................................... 87
11.4 No Waiver; Remedies Cumulative............................................................. 89
11.5 Payment of Expenses, etc................................................................... 90
11.6 Amendments, Waivers and Consents........................................................... 90
11.7 Counterparts............................................................................... 91
11.8 Headings................................................................................... 91
11.9 Survival of Indemnification................................................................ 91
11.10 Governing Law; Submission to Jurisdiction; Venue........................................... 91
11.11 Severability............................................................................... 92
11.12 Entirety................................................................................... 92
11.13 Survival of Representations and Warranties................................................. 92
11.14 Binding Effect; Termination................................................................ 92
11.15 Confidentiality............................................................................ 93
11.16 Source of Funds............................................................................ 93
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SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 1.1C Schedule 13E-4
Schedule 2.1(a) Lenders
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.3(f) Form of Term Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(f) Form of Legal Opinion of Drinker Xxxxxx & Xxxxx
Schedule 5.1(g) Form of Local Counsel Opinion
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.9 Intellectual Property
Schedule 6.12 ERISA Disclosures
Schedule 6.14 Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 7.1(c) Form of Officer's Compliance Certificate
Schedule 7.12 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 11.3 Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of December 19, 1995 (the "Credit
Agreement"), is by and among XXXX MANUFACTURING CO., a Pennsylvania corporation
(the "Borrower"), the subsidiaries identified on the signature pages hereto and
such other subsidiaries as may from time to time become a party hereto (the
"Guarantors"), the several lenders identified on the signature pages hereto and
such other lenders as may from time to time become a party hereto (the
"Lenders") and 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
$130,000,000 credit facility consisting of (i) a $85,000,000 revolving credit
facility and (ii) a $45,000,000 term loan 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:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the equity
interest in such Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
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"Agent" shall have the meaning assigned to such term in
the heading hereof.
"Agent's Fee Letter" means that certain letter agreement,
dated as of December 19, 1995, between the Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(d).
"Alternative Assets" means, in connection with any proposed
Asset Sale pursuant to the terms of Section 8.4(b)(v)(B), assets
(including stock or other equity interests acquired in a transaction
contemplated by and permitted under Section 8.4(c) and whether new,
additional or replacement assets but exclusive of assets acquired in
the course of regular upkeep and maintenance) which are similar in
nature, purpose or business line to other assets owned or leased by the
Borrower and/or its Subsidiaries prior to or at the time of the
acquisition of such assets and useful in the conduct of the business of
the Borrower and its Subsidiaries as permitted to be conducted pursuant
to Section 8.3.
"Applicable Margin" means, for purposes of calculating the
applicable interest rate for any day for any Eurodollar Loan or the
applicable rate of the Standby Letter of Credit Fee for any day for
purposes of Section 3.5(b)(i), the appropriate applicable margin
corresponding to the Consolidated Leverage Ratio in effect as of the
most recent Calculation Date:
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===============================================================================================================================
Applicable
Margin for Applicable
Eurodollar Margin for Applicable
Loans which Eurodollar Margin for
Consolidated are Loans which Standby
Pricing Leverage Revolving are Term Letter of
Level Ratio Credit Loans Loans Credit Fee
-------------------------------------------------------------------------------------------------------------------------------
I Equal to or 40.0 bps 55.0 bps 40.0 bps
less than
2.00 to 1.00
-------------------------------------------------------------------------------------------------------------------------------
II Greater than 47.5 bps 62.5 bps 47.5 bps
2.00 to 1.00
but equal to
or less than
2.50 to 1.00
-------------------------------------------------------------------------------------------------------------------------------
III Greater than 60.0 bps 75.0 bps 60.0 bps
2.50 to 1.00
but equal to
or less than
3.00 to 1.00
-------------------------------------------------------------------------------------------------------------------------------
IV Greater than 72.5 bps 87.5 bps 72.5 bps
3.00 to 1.00
===============================================================================================================================
Determination of the appropriate Applicable Margins based on the
Consolidated Leverage Ratio shall be made as of each Calculation Date.
The Consolidated Leverage Ratio in effect as of a Calculation Date
shall establish the Applicable Margins that shall be effective as of
the date designated by the Agent as the Applicable Margin Change Date.
The Agent shall determine the Applicable Margins as of each Calculation
Date and shall promptly notify the Borrower and the Lenders of the
Applicable Margins so determined and of the Applicable Margin Change
Date. Such determinations by the Agent of the Applicable Margins shall
be conclusive absent demonstrable error. The initial Applicable Margins
shall be based on Pricing Level III until the first Applicable Margin
Change Date occurring after the Closing Date.
"Applicable Margin Change Date" means, with respect to any
Calculation Date, a date designated by the Agent that is not more than
five (5) Business Days after the date pursuant to the terms of Section
7.1(a) or (b), as applicable, that the Required Financial Information
for such Calculation Date is required to be delivered to the Agent and
the Lenders.
"Application Period" shall have the meaning assigned to such
term in Section 8.4(b)(v)(B)(1).
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"Asset Sale" means any sale, lease, transfer or other
disposition (including any such transaction effected by way of merger,
amalgamation or consolidation) by the Borrower or any of its
Subsidiaries subsequent to the date hereof of any asset (including
stock in Subsidiaries of the Borrower), including without limitation
any sale leaseback transaction (whether or not involving a Capital
Lease), but excluding (a) the sale of inventory in the ordinary course
of business for fair consideration, (b) the sale or disposition of
machinery and equipment no longer used or useful in the conduct of such
Person's business, (c) the sale of any asset having a book value of
less than $100,000, (d) the Fresno Asset Sale and (e) any Equity
Transaction.
"Attributed Principal Amount" means, on any day, with respect
to any Permitted Receivables Financing entered into by the Borrower,
the aggregate amount (with respect to any such transaction, the
"Invested Amount") paid to, or borrowed by, such Person as of such date
under such Permitted Receivables Financing, minus the aggregate amount
received by the applicable Receivables Financier and applied to the
reduction of the Invested Amount under such Permitted Receivables
Financing.
"Available Reinvestment Amount" means, at any time, the
aggregate amount of the Net Proceeds of all asset sales made pursuant
to Section 8.4(b)(v) with respect to which the related Application
Period has not yet expired, provided that such Net Proceeds (i) have
not been applied to the purchase, acquisition or construction of
Alternative Assets as contemplated by Section 8.4(b)(v)(B)(1) and (ii)
have been applied to prepay the Loans as contemplated by Section
8.4(b)(v)(B)(2) and Section 3.3(b)(iii).
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
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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.
"Xxxxxx Family" means the wife, children and descendants of
such children of the late Xxxxxx X. Xxxxxx III, their respective
spouses and estates, any trusts primarily for the benefit of any of the
foregoing and the administrators, executors and trustees of any such
estates or trusts.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Xxxxx" means Xxxxx Custom Furniture, Inc., an Alabama
corporation and a Wholly Owned Subsidiary of the Borrower.
"Borrower" means the Person identified as such in the heading
hereof, together with any successors and permitted assigns.
"Borrower's Obligations" means, without duplication, all (i)
of the obligations of the Borrower to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes or any of the other Credit Documents and (ii) all
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liabilities and obligations, whenever arising, owing from the Borrower
to any Lender or any affiliate of a Lender arising under interest rate
protection agreements, foreign currency exchange agreements, commodity
purchase or option agreements or other interest or exchange rate or
commodity price hedging agreements.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina are
authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in
London, England and New York, New York.
"Calculation Date" means the last day of each fiscal
quarter of the Borrower.
"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 accounted for as a capital lease on
the balance sheet of that Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is
at least P-1 or the equivalent thereof (any such bank being an
"Approved Lender"), in each case with maturities of not more than 270
days from the date of acquisition, (c) commercial paper and variable or
fixed rate notes issued by any Approved Lender (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed
by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P- 1 (or the equivalent thereof) or better by Moody's
and maturing within six months of the date of acquisition, (d)
repurchase agreements entered into by a Person with a bank or trust
company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of
America in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount
of the repurchase obligations, (e) obligations of any Xxxxx xx xxx
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Xxxxxx Xxxxxx 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-3 or AA- by
Moody's or S&P, respectively, and maturing within three years from the
date of acquisition thereof, (f) Investments in municipal auction
preferred stock (i) rated AAA (or the equivalent thereof) or better by
S&P or Aaa (or the equivalent thereof) or better by Moody's and (ii)
with dividends that reset at least once every 365 days and (g)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $100,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a), (b), (c), (e) and (f).
"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert, other than members of the Xxxxxx Family, 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 35%
or more of the combined voting power of all Voting Stock of the
Borrower, or (ii) during any period of up to 24 consecutive months,
commencing after the Closing Date, individuals who at the beginning of
such 24 month period were directors of the Borrower (together with any
new director whose election by the Borrower's Board of Directors or
whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors of the
Borrower then in office. 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 December 19, 1995
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed also to refer to
any successor sections.
"Commitment" means (i) with respect to each Lender, the
Revolving Commitment of such Lender and the Term Loan Commitment of
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such Lender and (ii) with respect to the Issuing Lender, the LOC
Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures (exclusive of expenditures for acquisitions
permitted pursuant to the terms of Section 8.4(a) or (c)) of the
Borrower and its consolidated Subsidiaries for such period, as
determined in accordance with GAAP.
"Consolidated EBIT" means, for any period, the sum of (i)
Consolidated Net Income for such period but excluding (A) non-cash
charges associated with exercise of stock options, (B) unusual items,
including but not limited to refinancing, restructuring or
reorganizational charges, (C) effects of changes in accounting
principles and (D) extraordinary items, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense for such period and (B)
total Federal, state, local and foreign income taxes of the Borrower
and its consolidated Subsidiaries for such period.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated EBIT for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for consolidated depreciation and amortization expense of the
Borrower and its consolidated Subsidiaries for such period.
"Consolidated Fixed Charge Coverage Ratio" means, as of any
Calculation Date, the ratio of (i) Consolidated EBITDA for the
four-quarter period ended as of such Calculation Date minus
Consolidated Capital Expenditures for the four-quarter period ended as
of such Calculation Date minus Restricted Payments by the Borrower and
its consolidated Subsidiaries for the four-quarter period ended as of
such Calculation Date, to (ii) Consolidated Interest Expense for the
four-quarter period ended as of such Calculation Date plus Consolidated
Scheduled Funded Indebtedness Payments for the four-quarter period
ended as of such Calculation Date.
"Consolidated Funded Indebtedness" means, at any time, the
outstanding principal amount of all Funded Indebtedness, without
duplication, of the Borrower and its consolidated Subsidiaries at such
time.
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"Consolidated Interest Coverage Ratio" means, for any period,
the ratio of (i) Consolidated EBIT for such period to (ii) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense" means, for any period, all
interest expense of the Borrower and its consolidated Subsidiaries for
such period, as determined in accordance with GAAP but including in any
event all imputed interest, whether in the form of "yield", "discount"
or other similar item, that accrues in respect of the Attributed
Principal Amount of any Permitted Receivables Financing.
"Consolidated Leverage Ratio" means, as of any Calculation
Date, the ratio of (i) Consolidated Funded Indebtedness as of such
Calculation Date at such time to (ii) Consolidated EBITDA for the four
fiscal-quarter period ended as of such Calculation Date.
"Consolidated Net Income" means, for any period, net income
after taxes for such period for the Borrower and its consolidated
Subsidiaries, as determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date, total
shareholders' equity of the Borrower and its consolidated Subsidiaries
as of such date, as determined in accordance with GAAP.
"Consolidated Scheduled Funded Indebtedness Payments" means,
as of any Calculation Date, the scheduled payments of principal on
Funded Indebtedness for the Borrower and its consolidated Subsidiaries
for the twelve month period ending on such Calculation Date.
"Controlled Group" means (i) the controlled group of
corporations as defined in Section 414(b) of the Code and the
applicable regulations thereunder, or (ii) the group of trades or
businesses under common control as defined in Section 414(c) of the
Code and the applicable regulations thereunder, of which the Borrower
or any of its Subsidiaries is a member.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter and all other related agreements and documents
issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"Credit Party" means any of the Borrower and the
Guarantors.
"Debt Transaction" means any issuance by the Borrower or any
of its Subsidiaries of Funded Indebtedness other than (i) purchase
money Indebtedness, (ii) Capital Leases and (iii) Loans and LOC
Obligations.
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"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" means dollars in lawful currency of
the United States of America.
"Domestic Credit Party" means any one of the Borrower and each
of the Guarantors which is a Domestic Subsidiary of the Borrower.
"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.
"Eligible Assignees" means (i) any Lender or any Affiliate or
Subsidiary of a Lender, and (ii) any other commercial bank, financial
institution or "accredited investor" (as defined in Regulation D of the
Securities and Exchange Commission) reasonably acceptable to the Agent
and the Borrower.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"Equity Transaction" means any issuance by the Borrower or any
of its Subsidiaries of (A) shares of its capital stock, other than the
issuance to the Borrower of the capital stock of any of its
Subsidiaries, (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, whether or not
incorporated, which is under common control with any Credit Party
- 10 -
within the meaning of Section 4001(a)(14) of ERISA, or is a member of a
group which includes the Borrower and which is treated as a single
employer under Sections 414(b), (c), (m), or (o) of the Code.
"Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"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 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.
"Excess Sale Event" means, with respect to any sale of assets
made pursuant to the terms of Section 8.4(c)(iv), the failure of the
Borrower to apply (or cause its applicable Subsidiary to apply) an
amount equal to the Net Proceeds of such asset sale to the purchase,
acquisition or construction of Alternative Assets during the
Application Period for such asset sale as contemplated by the terms of
Section 8.4(b)(v)(B)(1).
"Facility Fee" shall have the meaning assigned to such term in
Section 3.5(a).
- 11 -
"Facility Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(a).
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that (A) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day and (B) if no such rate is so
published on such next succeeding 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.
"Fiscal Year End" means, for any fiscal year of the Borrower
and its Subsidiaries, the Sunday nearest the last day of November.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary.
"Fresno Asset Sale" means the sale by the Borrower of its
former distribution center and related assets located in Fresno,
California and having a book value of not more than $1,950,000.
"Funded Indebtedness" 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 outstanding Funded Indebtedness of another
Person, (iv) with respect to the Borrower, the outstanding Attributed
Principal Amount under any Permitted Receivables Financing and (v) all
Funded Indebtedness of another Person secured by a Lien on any Property
of such Person, whether or not such Funded Indebtedness has been
assumed. The Funded Indebtedness of any Person shall include the Funded
Indebtedness of any partnership or joint venture in which such Person
is a general partner or joint venturer.
"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.
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"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of those Persons identified as a
"Guarantor" on the signature pages hereto, and each Additional Credit
Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters issued to a
creditor of any non-Affiliate 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.
"Xxxx Data" means Xxxx Data Products, Inc., a Delaware
corporation and a Wholly Owned Subsidiary of the Borrower.
"Xxxx Europe" means Xxxx Europe, Ltd., a U.K.
corporation and a Wholly Owned Subsidiary of the Borrower.
"Xxxx Holdings" means Xxxx Holdings, Inc., a Delaware
corporation and a Wholly Owned Subsidiary of the Borrower.
"Xxxx X-Acto" means Xxxx X-Acto, Inc., a Pennsylvania
corporation and a Wholly Owned Subsidiary of the Borrower.
"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
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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 twelve (12)
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, (x) the maximum amount of all 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) with respect to the Borrower, the
outstanding Attributed Principal Amount under any Permitted Receivables
Financing and (xii) 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. The Indebtedness of any
Person shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner or a joint venturer.
"Interbank Offered Rate" means, with respect to any Eurodollar
Loan for the Interest Period applicable thereto, the rate of interest
per annum as determined by the Agent to be the average (rounded
upwards, if necessary, to the nearest 1/100 of 1%) of the rates per
annum at which deposits in Dollars in immediately available funds are
offered to each Reference Bank two Business Days prior to the beginning
of such Interest Period by major banks in the interbank eurocurrency
market as at or about 10:00 A.M. Charlotte, North Carolina time for
delivery on the first day of such Interest Period, for the number of
days comprised therein and in an amount equal or comparable to the
amount of the related Eurodollar Loan of such Reference Bank.
"Interest Payment Date" means (i) as to any Revolving Loan or
portion of the Term Loan which is a Base Rate Loan, the last day of
each March, June, September and December, the date of repayment of
principal of such Loan and the Termination Date and (ii) as to any
Eurodollar Loan, the last day of each Interest Period for such Loan
- 14 -
and on the Termination Date, and in addition where the applicable
Interest Period is more than 3 months, then also on the date 3 months
from the beginning of the Interest Period, and each 3 months
thereafter. If an Interest Payment Date falls on a date which is not a
Business Day, such Interest Payment Date shall be deemed to be the next
succeeding Business Day, except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day.
"Interest Period" means as to Eurodollar Loans, a period of
one, two, three or six month's duration, as the Borrower may elect,
commencing in each case, on the date of the borrowing (including
conversions, extensions and renewals); provided, however, (A) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that 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 Termination Date, (C) with regard to the Term Loan, no
Interest Period shall extend beyond any principal amortization payment
date unless the portion of the Term Loan comprised of Base Rate Loans
together with the portion of the Term Loan comprised of Eurodollar
Loans with Interest Periods expiring prior to the date such principal
amortization payment is due, is at least equal to the amount of such
principal amortization payment due on such date, and (D) 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 day of such calendar month.
"Investment", in any Person, means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of such
Person, any capital contribution to such Person or any other investment
in such Person, including, without limitation, any Guaranty Obligation
incurred for the benefit of such Person.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(b)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Schedule 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
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"Lenders" means each of the Persons identified as a "Lender"
on the signature pages hereto, and each Person which may become a
Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans and/or the Term
Loan (or a portion of any Revolving Loan or Term 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 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.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any Credit Party to perform any
material obligation under the Credit Documents or (iii) the material
- 16 -
rights and remedies of the Lenders under the Credit
Documents.
"Material Subsidiary" means (i) each of Xxxxx, Xxxx Data, Xxxx
Holdings, Xxxx X-Acto and Seal and (ii) any other direct or indirect
Subsidiary of the Borrower which at any time on or after the Closing
Date has total assets (as determined in accordance with GAAP) equal to
or greater than $1,000,000, provided that the aggregate total assets
(as determined in accordance with GAAP) at any time of all Subsidiaries
of the Borrower excluded from this definition of "Material Subsidiary"
shall not exceed $5,000,000.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. and its
successors.
"Net Proceeds" means proceeds received by the Borrower or any
of its Subsidiaries from time to time in connection with any Asset
Sale, Equity Transaction or Debt Transaction, net of the actual costs
and taxes incurred by such Person in connection with and attributable
to such Asset Sale, Equity Transaction or Debt Transaction, as
applicable.
"Non-Excluded Taxes" means such term as is defined in
Section 3.10.
"Note" means any Revolving Note or any Term 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) or Section 2.3(b).
- 17 -
"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.
"Participation Interest" means, the extension of credit by a
Lender by way of a purchase of a participation in any Letters of Credit
or LOC Obligations as provided in Section 2.2(c), or in any Loans as
provided in Section 3.13.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made by the Borrower or any of its Subsidiaries in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of stock,
obligations, securities or other property received by the Borrower or
any of its Subsidiaries in settlement of accounts receivable (created
in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and set forth in Schedule
1.1A; (v) Investments in any Subsidiary of the Borrower which is a
Guarantor; (vi) Investments in any Subsidiary of the Borrower which is
not a Guarantor (A) not to exceed for all such Investments and all such
Subsidiaries, an aggregate principal amount of $5,000,000 at any one
time outstanding or (B) constituting accumulated retained earnings of
such Subsidiary; (vii) Guaranty Obligations permitted by Section 8.1;
(viii) acquisitions permitted by Section 6.15 and Section 8.4(c); (ix)
transactions permitted by Section 8.8; (x) loans to directors,
officers, employees, agents, customers or suppliers that do not exceed
an aggregate principal amount of $1,000,000 at any one time
outstanding; (xi) Investments received as consideration in connection
with or arising by virtue of any merger, consolidation, sale or other
transfer of assets permitted under Section 8.4; (xii) Investments by
the Borrower in a Subsidiary or Affiliate in connection with a
Permitted Receivables Financing; (xiii) intercompany Indebtedness of
Xxxxx, Seal and Xxxx Europe to the Borrower incurred in the ordinary
course of business and consistent with the past practices of such
Persons or for cash management purposes and, in the case of Xxxx
Europe, not exceeding $5,000,000 at any time outstanding; (xiv) in
- 18 -
the case of any Foreign Subsidiary of the Borrower, Investments which
may be demoninated in a currency other than Dollars, having similar
liquidity, duration and credit quality of issuer as Investments of the
types described in the definition of "Cash Equivalents" set forth in
this Section 1.1; and (xv) Investments in joint ventures and
partnerships that do not exceed an aggregate principal amount of
$5,000,000 at any one time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Agent on behalf of the
Lenders;
(ii) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers
and other liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary
course of business, provided that such Liens secure only
amounts not yet due and payable or, if due and payable, are
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);
(iv) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made by the Borrower or any of its
Subsidiaries in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment
of borrowed money);
(v) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the
judgments secured shall, within 60 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days
after the expiration of any such stay;
- 19 -
(vi) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or
irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use
of the encumbered Property for its intended purposes;
(vii) Liens on Property securing purchase money
Indebtedness (including Capital Leases) to the extent
permitted under Section 8.1(c), provided that any such Lien
attaches to such Property concurrently with or within 90 days
after the acquisition thereof;
(viii) leases or subleases granted to others not
interfering in any material respect with the business
of any Credit Party;
(ix) 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;
(x) Liens created or deemed to exist in connection
with a Permitted Receivables Financing (including any related
filings of any financing statements), but only to the extent
that any such Lien relates to the applicable receivables and
related property actually sold, contributed or otherwise
conveyed pursuant to such transaction;
(xi) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions; and
(xii) Liens existing as of the Closing Date and set
forth on Schedule 1.1B; provided that (a) no such Lien shall
at any time be extended to or cover any property of any Credit
Party other than the property subject thereto on the Closing
Date and (b) the principal amount of the Indebtedness secured
by such Liens shall not be increased.
"Permitted Receivables Financing" means any transaction
involving one or more sales, contributions or other conveyances by the
Borrower of any accounts receivable to a Subsidiary or Affiliate of the
Borrower (with respect to any such transaction, the "Receivables
Financing SPC"), which Receivables Financing SPC then (x) sells (as
determined in accordance with GAAP) any such receivables (or an
interest therein) to any Person that is not a Subsidiary or Affiliate
of the Borrower (with respect to any such transaction, the
- 20 -
"Receivables Financier"), (y) borrows from such Receivables Financier
and secures such borrowings by a pledge of such receivables or (z)
otherwise finances its acquisition of such receivables and, in
connection therewith, conveys an interest in such receivables to the
Receivables Financier, provided that (i) the aggregate Attributed
Principal Amount for all such receivables financings shall not at any
time exceed $35,000,000, (ii) such receivables financing shall not
involve any recourse to the Borrower or any of its Subsidiaries for any
reason other than (A) repurchases of non-eligible receivables or (B)
indemnifications for losses other than credit losses related to the
receivables sold in such financing, (iii) such receivables financing
shall not include any Guaranty Obligations of the Borrower or any of
its Subsidiaries, (iv) the Agent shall be reasonably satisfied with the
structure of and documentation for any such transaction and that the
terms of such transaction, including the discount at which receivables
are sold and any termination events, shall be (in the good faith
understanding of the Agent) consistent with those prevailing in the
market for similar transactions involving a receivables
originator/servicer of similar credit quality and a receivables pool of
similar characteristics and (v) the documentation for such transaction
shall not be amended or modified without the prior written approval of
the Agent.
"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 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 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 to any
debtor).
"Pro Forma Basis" means, with respect to any transaction, that
such transaction shall be deemed to have occurred as of the first day
of the four fiscal-quarter period ending as of the most recent
Calculation Date preceding the date of such transaction with respect to
which the Agent has received the Required Financial Information.
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As used herein, "transaction" means (i) any incurrence, assumption or
retirement of Indebtedness as referred to in Section 8.1(h)(i), (ii)
any sale or other disposition of assets as referred to in Section
8.3(b)(iv) or (iii) any acquisition of capital stock or securities or
any purchase, lease or other acquisition of Property as referred to in
Section 8.4(c). With respect to any transaction of the type described
in clause (i) above regarding Indebtedness which has a floating or
formula rate, the implied rate of interest for such Indebtedness for
the applicable period for purposes of this definition shall be
determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Receivables Financier" shall have the meaning assigned to
such term in the definition of "Permitted Receivables Financing" set
forth in this Section 1.1.
"Reference Banks" means (i) prior to primary syndication of
the credit facilities hereunder, NationsBank and (ii) thereafter,
NationsBank and two other Lenders mutually acceptable to the Agent and
the Borrower.
"Regulation D, G, U, or X" means Regulation D, G, 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.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
post-event notice requirement is waived under subsections .13, .14,
.18, .19, or .20 of PBGC Reg. ss. 2615.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Borrower required to be delivered pursuant to Section 7.1(a) or (b) for
the fiscal period or quarter ending as of such Calculation Date, and
(ii) the certificate of the chief financial officer, controller or
treasurer of the Borrower required by Section 7.1(c) to be delivered
with the financial statements described in clause (i) above.
"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
to make Revolving Loans and Term Loans or (ii) if the Commitments have
been terminated, the outstanding Loans and Participation Interests.
- 22 -
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of the Borrower or any of its Subsidiaries, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of the Borrower or any of its
Subsidiaries, now or hereafter outstanding and (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of the
Borrower or any of its Subsidiaries, now or hereafter outstanding.
"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, (A) to make Revolving Loans in
accordance with the provisions of Section 2.1(a) and (B) to purchase
participation interests in Letters of Credit in accordance with the
provisions of Section 2.2(c).
"Revolving Committed Amount" shall have the meaning assigned
to such term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" means a promissory note of the Borrower in
favor of a Lender delivered pursuant to Section 2.1(e) and evidencing
the Revolving Loans of such Lender, as such promissory note may be
amended, modified, restated 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.
"Seal" means Seal Products, Inc., a Delaware corporation and a
Wholly Owned Subsidiary of the Borrower.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
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realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or is to engage, (iv) the
fair value of the Property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (v) the present fair saleable value of
the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as
they become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(b)(i).
"Stock Repurchase" means the repurchase, if any, by the
Borrower on or after the Closing Date but no later than February 15,
1996 of up to $90,000,000 of the Borrower's common capital stock as
described in a Schedule 13E-4 in substantially the form of Schedule
1.1C attached hereto.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than 50%
equity interest at any time.
"Term Loan" shall have the meaning assigned to such term as
defined in Section 2.3(a).
"Term Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan in a
principal amount equal to such Lender's Commitment Percentage of the
Term Loan Committed Amount.
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"Term Loan Committed Amount" shall have the meaning assigned
to such term in Section 2.3(a).
"Term Loan Unused Fee" shall have the meaning assigned to such
term in Section 3.5(c).
"Term Note" means a promissory note of the Borrower in favor
of a Lender delivered pursuant to Section 2.3(f) and evidencing such
Lender's share of the Term Loan, as such promissory note may be
amended, modified, restated or replaced from time to time.
"Termination Date" means December 31, 2000.
"Termination Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (vi) the complete or partial withdrawal of the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a
Multiemployer Plan.
"Trade Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(b)(ii).
"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.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
100% of whose Voting Stock or other equity interests is at the time
owned by such Person directly or indirectly through other Wholly Owned
Subsidiaries.
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."
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1.3 Accounting Terms. Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis. All calculations made for the purposes of
determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 hereof (or, prior to the delivery of the first
financial statements pursuant to Section 7.1 hereof, consistent with the
financial statements as at November 27, 1994); 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 or application of
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. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Commitment Percentage of revolving credit loans
("Revolving Loans") from time to time from the Closing Date until the
Termination Date, or such earlier date as the Revolving Commitments
shall have been terminated as provided herein for the purposes
hereinafter set forth; provided, however, that Revolving Loans shall
not be made hereunder until the Term Loan shall have been advanced by
the Lenders pursuant to and in accordance with the terms of Section
2.2; provided further, however, that the sum of the aggregate principal
amount of outstanding Revolving Loans shall not exceed EIGHTY-FIVE
MILLION DOLLARS ($85,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 3.4, the "Revolving
Committed Amount"); provided, further, (i) with regard to each Lender
individually, such Lender's outstanding Revolving Loans shall not
exceed such Lender's Commitment Percentage of the Revolving Committed
Amount, and (ii) with regard to the Lenders collectively, the aggregate
principal amount of outstanding Revolving Loans plus LOC Obligations
outstanding shall not exceed 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
- 26 -
and reborrowed in accordance with the provisions hereof; provided,
however, that no more than 12 separate Eurodollar Loans shall be
outstanding hereunder at any time. For purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate
Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new Eurodollar Loan with a single Interest Period.
Revolving Loans hereunder may be repaid and reborrowed in accordance
with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall
request a Revolving Loan borrowing by written notice (or
telephone notice promptly confirmed in writing) to the Agent
not later than 12:00 Noon (Charlotte, North Carolina time) on
the Business Day 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, the contents thereof and each
such Lender's share of any borrowing to be made pursuant
thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or
Base Rate Loan that is a Revolving Loan shall be in a minimum
aggregate amount of $2,000,000 and integral multiples of
$1,000,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its
Commitment Percentage of each Revolving Loan borrowing
available to the Agent for the account of the Borrower at the
office of the Agent specified in Section 11.1, or at such
other office as the Agent may designate in writing, by
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1:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and
in funds immediately available to the Agent. Such borrowing
will then be made available to the Borrower by the Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the
Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1,
Revolving Loans shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as
Revolving Loans shall be comprised of Base Rate Loans, the
Base Rate.
(ii) Eurodollar Loans. During such periods as
Revolving Loans shall be comprised of Eurodollar Loans, the
Eurodollar Rate plus the Applicable Margin.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) Revolving Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
to each Lender in substantially the form of Schedule 2.1(e).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, the Lenders will participate
in the issuance by the Issuing Lender from time to time of such Letters
of Credit from the Closing Date until the Termination Date as the
Borrower may request, in a form acceptable to the Issuing Lender;
provided, however, that (i) the LOC Obligations outstanding shall not
at any time exceed TEN MILLION DOLLARS ($10,000,000) (the "LOC
Committed Amount") and (ii) the sum of the aggregate principal amount
of outstanding Revolving Loans plus LOC Obligations outstanding shall
not at any time exceed the aggregate 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 Termination Date.
Each Letter of Credit shall comply with the related LOC Documents.
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The issuance and expiry date of each Letter of Credit shall be a
Business Day.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
frequently upon request, disseminate to each of the Lenders and the
Borrower a detailed report specifying the Letters of Credit which are
then issued and outstanding and any activity with respect thereto which
may have occurred since the date of the prior report, and including
therein, among other things, the beneficiary, the face amount, expiry
date as well as any payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder, in each case in an amount equal to its
pro rata share of the obligations under such Letter of Credit (based on
the respective Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume, as primary obligor
and not as surety, and be obligated to pay to the Issuing Lender
therefor and discharge when due, its pro rata share of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Lender shall
pay to the Issuing Lender its pro rata share of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) hereof. The obligation of each Lender to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided.
(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
- 29 -
in subsection (e) hereof on the related Letter of Credit, the proceeds
of which will be used to satisfy the related reimbursement obligations.
The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a
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 Base Rate plus two percent
(2%). The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly
pay to the Agent for the account of the Issuing Lender in dollars and
in immediately available funds, the amount of such Lender's pro rata
share of such unreimbursed drawing. Such payment shall be made on the
day such notice is received by such Lender from the Issuing Lender if
such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from the
date of such drawing until such Lender pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two (2)
Business Days of the date of drawing, 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
- 30 -
Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to
the Issuing Lender) in the related unreimbursed drawing portion of the
LOC Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect
thereto.
(e) Repayment with 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 solely of Base Rate Loans shall be
immediately made to the Borrower by all Lenders (notwithstanding any
termination of the Commitments pursuant to Section 9.2) pro rata based
on the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to
Section 9.2) and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC 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 Borrowers on or after such date and prior to such purchase)
from the Issuing Lender such participation in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to
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share in such LOC Obligations ratably (based upon the respective
Commitment Percentages of the Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2)),
provided that at the time any purchase of participation pursuant to
this sentence is actually made, the purchasing Lender shall be required
to pay to the Issuing Lender, to the extent not paid to the Issuer by
the Borrowers in accordance with the terms of subsection (d) hereof,
interest on the principal amount of participation purchased for each
day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business
Days of the date of the Revolving Loan advance, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.
(f) 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.
(g) 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.
(h) Indemnification; Nature of Issuing Lender's Duties. (i) In
addition to its other obligations under this Section 2.2, the Borrower
hereby agrees to protect, indemnify, pay and save the Issuing Lender
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as
a consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing
under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(ii) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Lender shall
not be responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
- 32 -
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (C) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (E) for any
consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of the
above shall affect, impair, or prevent the vesting of the Issuing
Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any Letter
of Credit or the related certificates, if taken or omitted in good
faith, shall not put such Issuing Lender under any resulting liability
to the Borrower or any other Credit Party. It is the intention of the
parties that this Credit Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all risks
involved in the issuance of the Letters of Credit, all of which risks
are hereby assumed by the Borrower (on behalf of itself and each of the
other Credit Parties), including, without limitation, any and all
Government Acts. The Issuing Lender shall not, in any way, be liable
for any failure by the Issuing Lender or anyone else to pay any drawing
under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (h) shall
survive the termination of this Credit Agreement. No act or omissions
of any current or prior beneficiary of a Letter of Credit shall in any
way affect or impair the rights of the Issuing Lender to enforce any
right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing
Lender (A) arising solely out of the gross negligence or willful
- 33 -
misconduct of the Issuing Lender or (B) caused by the Issuing Lender's
unlawful failure to pay under any Letter of Credit.
(i) 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.
(j) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document, this Credit
Agreement shall control.
2.3 Term Loan.
(a) Term Commitment. Subject to and upon the terms and
conditions and relying upon the representations and warranties herein
set forth, each Lender agrees, severally and not jointly, to make
available to the Borrower, from time to time from the Closing Date
through and including February 15, 1996, or such earlier date as the
Term Loan Commitments shall have been terminated as provided herein,
such Lender's Commitment Percentage of a term loan (the "Term Loan") in
the aggregate amount of FORTY-FIVE MILLION DOLLARS ($45,000,000) (as
such aggregate maximum amount may be reduced from time to time as
provided in Section 3.4, the "Term Loan Committed Amount") for the
purposes hereinafter set forth. The Term Loan may consist of Base Rate
Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request; provided, however, that no more than 12 separate
Eurodollar Loans shall be outstanding hereunder at any time. For
purposes hereof, Eurodollar Loans with different Interest Periods shall
be considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period. Amounts repaid on the Term Loan may not be
reborrowed. In the event that for any reason the Borrower for any
reason shall not borrow by February 15, 1996 aggregate advances of the
Term Loan in an amount equal to the initial Term Loan Committed
- 34 -
Amount, then (without duplication of the effect of any reductions of
the Term Loan Committed Amount pursuant to Section 3.3(b)(ii) or
Section 3.4(b)(ii) or (iii)) the scheduled amortization payments on the
Term Loan required pursuant to the terms of Section 2.3(d) shall be
reduced ratably by the amount by which the initial Term Loan Committed
Amount exceeds the aggregate outstanding principal balance on the Term
Loan as of February 15, 1996 (after giving effect to any advances on
the Term Loan to be made on such date, but prior to giving effect to
any reduction of the Term Loan Committed Amount to be made on such date
pursuant to Section 3.3(b)(ii) or Section 3.4(b)(ii) or (iii)).
(b) Borrowing Procedures.
(i) Notice of Borrowing. The Borrower shall request a
Term Loan advance by written notice (or telephone notice promptly
confirmed in writing) to the Agent not later than 12:00 Noon
(Charlotte, North Carolina time) on the Business Day of the requested
borrowing in the case of Base Rate Loans, and on the third Business Day
of the requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Term Loan advance is requested, (B) the date of the requested advance
(which shall be a Business Day), (C) the aggregate principal amount to
be advanced and (D) whether the advance 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 Term Loan advance 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 2.3(b)(i), the contents thereof and
each such Lender's share of the Term Loan advance to be made pursuant
thereto.
(ii) Advances. Each Lender will make its Term Loan
Commitment Percentage of each Term Loan advance available to the Agent
for the account of the Borrower at the office of the Agent specified in
Section 11.1, or at such other office as the Agent may designate 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 advance will then be made
available to the Borrower by the Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the amounts
made available to the Agent by the Lenders and in like funds as
received by the Agent.
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(c) Minimum Amounts. Each Eurodollar Loan and Base Rate Loan
that is part of the Term Loan shall be in an aggregate principal amount
that is not less than the lesser of $5,000,000 and integral multiples
of $1,000,000 (or the then remaining principal balance of the Term
Loan, if less).
(d) Repayment of Term Loan. Subject to possible reduction
under the terms of subsection (a) of this Section 2.3 The principal
amount of the Term Loan shall be repaid in consecutive quarterly
installments as follows:
Payment Date Principal Amount
------------ ----------------
March 31, 1996 $1,250,000
June 30, 1996 $1,250,000
September 30, 1996 $1,250,000
December 31, 1996 $1,250,000
March 31, 1997 $1,750,000
June 30, 1997 $1,750,000
September 30, 1997 $1,750,000
December 31, 1997 $1,750,000
March 31, 1998 $2,500,000
June 30, 1998 $2,500,000
September 30, 1998 $2,500,000
December 31, 1998 $2,500,000
March 31, 1999 $2,750,000
June 30, 1999 $2,750,000
September 30, 1999 $2,750,000
December 31, 1999 $2,750,000
March 31, 2000 $3,000,000
June 30, 2000 $3,000,000
September 30, 2000 $3,000,000
Termination Date $3,000,000
(e) Interest. Subject to the provisions of Section 3.1, the
Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the
Term Loan (or any portion thereof) shall consist of Base Rate
Loans, the Base Rate.
(ii) Eurodollar Loans. During such periods as
the Term Loan (or any portion thereof) shall consist of
Eurodollar Loans, the Eurodollar Rate plus the Applicable
Margin.
Interest on the Term Loan shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(f) Term Notes. The portion of the Term Loan made by each
Lender shall be evidenced by a duly executed promissory note of the
Borrower to each such Lender dated as of the Closing Date in an
original principal amount equal to such Lender's Commitment Percentage
of the Term Loan and substantially
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in the form of Schedule 2.3(f) (such promissory note, as amended,
modified, extended, renewed or replaced from time to time is
hereinafter referred to individually as a "Term Note" and collectively,
the "Term Notes").
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate. Upon the occurrence, and during the continuance, of
an Event of Default, the principal of and, to the extent permitted by law,
interest on the Loans and any other amounts owing hereunder or under the other
Credit Documents shall bear interest, payable on demand, at a per annum rate 2%
greater than the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then 2%
greater than the Base Rate).
3.2 Extension and Conversion. Subject to the terms of Section 5.2, the
Borrower shall have the option, on any Business Day, to extend existing Loans
into a subsequent permissible Interest Period or to convert Loans into Loans of
another type; provided, however, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
shall be in such minimum amounts as provided in, with respect to Revolving
Loans, Section 2.1(b)(ii) or, with respect to the Term Loan, 2.3(c), (iv) no
more than 12 separate Eurodollar Loans shall be outstanding hereunder at any
time, and (v) any request for extension or conversion of a Eurodollar Loan which
shall fail to specify an Interest Period shall be deemed to be a request for an
Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephone notice promptly confirmed in writing) to the Agent prior to 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan and on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or conversion
shall constitute a representation and warranty by the Borrower of the matters
specified in subsections (ii), (iii), (iv) and (v) of Section 5.2(a). In the
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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 Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time without premium
or penalty; provided, however, that (i) Eurodollar Loans may only be
prepaid on three Business Days' prior written notice to the Agent and
specifying the applicable Loans to be prepaid; (ii) any prepayment of
Eurodollar Loans will be subject to Section 3.11; and (iii) each such
partial prepayment of Loans shall be in a minimum principal amount of
$2,000,000, in the case of Revolving Loans, and in a minimum principal
amount of $1,000,000, in the case of Term Loans, and integral multiples
of $1,000,000 in excess thereof. Subject to the foregoing terms,
amounts prepaid hereunder shall be applied as the Borrower may elect;
provided that if the Borrower fails to specify a voluntary prepayment
then such prepayment shall be applied first to Term Loans and then to
Revolving Loans, in each case first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities.
(b) Mandatory Prepayments.
(i) If at any time the sum of the aggregate amount of
outstanding Revolving Loans plus LOC Obligations outstanding shall
exceed the Revolving Committed Amount, the Borrower promises to prepay
immediately the outstanding principal balance on the Revolving Loans in
an amount sufficient to eliminate such excess.
(ii) (A) If the aggregate price paid by the Borrower for
the Stock Repurchase is less than $90,000,000, the Borrower immediately
shall prepay the Revolving Loans and reduce the Revolving Commitments
and prepay the Term Loan and reduce the Term Loan Commitments, pro rata
in accordance with the respective Term Loan Committed Amount (or, if
less, the outstanding principal amount of the Term Loan) and the amount
of the Revolving Committed Amount, in an aggregate amount equal to the
amount by which $90,000,000 exceeds such aggregate price; and (B) if
the Stock Repurchase shall not have been consummated on or prior to
February 15, 1996, the Borrower immediately shall prepay the Revolving
Loans and reduce the Revolving Commitments and prepay the Term Loan and
reduce the Term Loan Commitments, pro rata in accordance with the
respective Term Loan Committed Amount (or, if less, the outstanding
principal amount of the Term Loan) and the amount of the Revolving
Committed Amount, in an aggregate amount equal to $90,000,000.
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(iii) (A) Immediately upon the occurrence of any Excess
Sale Event, the Borrower shall prepay the Loans in an amount equal to
50% of the Net Proceeds of the related asset sale not applied (or
caused to be applied) by the Borrower during the related Application
Period to the purchase, acquisition or construction of Alternative
Assets as contemplated by the terms of Section 8.4(b)(v)(B)(1).
(B) Immediately upon the occurrence of the Fresno Asset Sale,
the Borrower shall prepay the Loans in an amount equal to 50% of the
Net Proceeds thereof in excess of $900,000.
(C) Any prepayment pursuant to this Section 3.3(b)(iii) shall
be applied first to the Term Loan and then to Revolving Loans.
(iv) To the extent that the aggregate cumulative amount
of cash (including cash received in respect of non-cash consideration)
Net Proceeds from Equity Transactions received by the Borrower or any
of its Subsidiaries during any fiscal year exceeds $500,000, the
Borrower shall, within 60 days of receipt of any such Net Proceeds at
any time that the Consolidated Leverage Ratio as of the most recent
fiscal quarter end with respect to which the Agent shall have received
the Required Financial Information is greater than 2.50 to 1.00, prepay
the Loans in an amount equal to 50% of the portion of such cash Net
Proceeds exceeding $500,000 not applied by the Borrower within such 60
day period to pay the purchase price in connection with any acquisition
permitted by the terms of Section 8.4(c). Any prepayment pursuant to
this Section 3.3(b)(iv) shall be applied first to the Term Loan and
then to Revolving Loans.
(v) Immediately upon the receipt by the Borrower or any
of its Subsidiaries of Net Proceeds from any Debt Transaction the
Borrower shall prepay the Loans in an amount equal to 100% of all such
Net Proceeds. Any prepayment pursuant to this Section 3.3(b)(v) shall
be applied first to the Term Loan and then to Revolving Loans.
(c) General. All prepayments made pursuant to this Section 3.3
shall be subject to Section 3.11, shall be applied first to Base Rate
Loans and then to Eurodollar Loans in direct order, shortest to
longest, of Interest Period maturities and shall be accompanied by
accrued interest on the principal amount being prepaid to the date of
prepayment and all other amounts due and payable hereunder with respect
to such Loans. All prepayments of the Term Loan pursuant to this
Section 3.3 shall be applied to principal installments thereof in
inverse order of maturity. Amounts prepaid on the Revolving Loans may
be reborrowed in accordance with the provisions hereof. Amounts
prepaid on the Term Loan may not be reborrowed.
- 39 -
3.4 Termination and Reduction of Revolving Committed Amount.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole
or in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount))
upon three Business Days' prior written notice to the Agent; provided,
however, no such termination or reduction shall be made which would
reduce the Revolving Committed Amount to an amount less than the
aggregate principal amount of outstanding Revolving Loans plus LOC
Obligations outstanding. The Agent shall promptly notify each of the
Lenders of receipt by the Agent of any notice from the Borrower
pursuant to this Section 3.4(a).
(b) Mandatory Reductions.
(i) On any date that the Revolving Loans are required to be
prepaid or the Revolving Commitments are required to be reduced
pursuant to the terms of Section 3.3(b), the Revolving Committed Amount
automatically shall be permanently reduced by the amount of such
required
prepayment.
(ii) On any date that the Term Loan is required to be prepaid
or the Term Loan Commitments are required to be reduced pursuant to the
terms of Section 3.3(b)(ii), the Term Loan Committed Amount
automatically shall be permanently reduced by the amount of such
required
prepayment.
(iii) Without duplication of any reductions of the Term Loan
Committed Amount effected pursuant to Section 3.3(b)(ii) or clause
(b)(ii) of this Section 3.4, the Term Loan Committed Amount
automatically shall be permanently reduced on February 15, 1996 by the
amount by which the Term Loan Committed Amount exceeds the outstanding
principal balance of the Term Loan (after giving effect to any
requested advance of the Term Loan to be made on such date).
(iv) On any date that the Borrower shall enter into a
Permitted Receivables Financing, the Revolving Committed Amount
automatically shall be permanently reduced by the facility commitment
amount of such Permitted Receivables
Financing.
(c) Termination Date. The Commitments of the Lenders and the
Issuing Lender shall automatically terminate on the Termination Date.
- 40 -
3.5 Fees.
(a) Facility Fee. In consideration of the Revolving
Commitments of the Lenders hereunder, the Borrower agrees to pay to the
Agent for the account of each Lender a fee (the "Facility Fee") on such
Lender's Commitment Percentage of the Revolving Committed Amount
(regardless of usage, but taking into account any permanent reductions
in the Revolving Committed Amount) computed at a per annum rate of 15
basis points for each day during the applicable Facility Fee
Calculation Period (hereinafter defined). The Facility Fee shall
commence to accrue on the Closing Date and shall be due and payable in
arrears on the fifteenth (15th) day of each January, April, July and
October (and the Termination Date) for the immediately preceding fiscal
quarter (or portion thereof) (each such fiscal quarter or portion
thereof for which the Facility Fee is payable hereunder being herein
referred to as an "Facility Fee Calculation Period"), beginning with
the first of such dates to occur after the Closing Date.
(b) Letter of Credit Fees.
(i) Issuance Fee. In consideration of the issuance of
Letters of Credit hereunder, the Borrower promises to pay to
the Agent for the account of the Lenders a fee (the "Standby
Letter of Credit Fee") on the average daily maximum amount
available to be drawn under each such standby Letter of Credit
computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable
Margin for the Standby Letter of Credit Fee. The Letter of
Credit Fee will be payable quarterly in arrears on the last
day of each March, June, September and December for the
immediately preceding fiscal quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of the Lenders a fee (the "Trade Letter of Credit
Fee") of 15 basis points on the amount of each drawing under
any such trade Letter of Credit. The Trade Letter of Credit
Fee will be payable on each date of drawing under a trade
Letter of Credit.
(iii) Issuing Lender Fees. In addition to the Standby
Letter of Credit Fee payable pursuant to clause (i) above and
the Trade Letter of Credit Fee payable pursuant to clause (ii)
above, the Borrower promises to pay to the Issuing Lender for
its own account without sharing by the other Lenders the
letter of credit fronting and negotiation fees agreed to by
the Borrower and the Issuing Lender from time to time and the
customary charges from time to time of the Issuing Lender
- 41 -
with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings
under, such Letters of Credit (collectively, the "Issuing
Lender Fees").
(c) Term Loan Unused Fee. In consideration of the Term Loan
Commitments of the Lenders hereunder, the Borrower agrees to pay to the
Agent for the account of each Lender a fee (the "Term Loan Unused Fee")
on an amount equal to such Lender's Commitment Percentage of the Term
Loan Committed Amount computed at a per annum rate of 15 basis points
for each day on and after the Closing Date until the first to occur of
(i) the date on which the Term Loan is fully advanced pursuant to the
terms of Section 2.3 and (ii) the date on which the Term Loan Committed
Amount is reduced to zero ($0) pursuant to the terms of Section 3.4(b).
(d) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account and for the account of NationsBanc Capital
Markets, Inc., as applicable, the fees referred to in the Agent's Fee
Letter (collectively, the "Agent's Fees").
3.6 Capital Adequacy. If, after the date hereof, any Lender has
determined 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 and detailed explanation 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.
3.7 Inability To Determine Interest Rate. If prior to the first day of
any Interest Period, the Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, the Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (y) any Loans that were to have been converted on the first
- 42 -
day of such Interest Period to or continued as Eurodollar Loans shall be
converted to or continued as Base Rate Loans and (z) any outstanding Eurodollar
Loans shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Base Rate Loans to Eurodollar Loans.
3.8 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof occurring after the Closing Date shall make it unlawful for
any Lender to make or maintain Eurodollar Loans as contemplated by this Credit
Agreement, (a) such Lender shall promptly give written notice of such
circumstances to the Borrower and the Agent (which notice shall be withdrawn
whenever such circumstances no longer exist), (b) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert a Base Rate Loan to Eurodollar Loans shall forthwith be canceled and,
until such time as it shall no longer be unlawful for such Lender to make or
maintain Eurodollar Loans, such Lender shall then have a commitment only to make
a Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans
then outstanding as Eurodollar Loans, if any, shall be converted automatically
to Base Rate Loans on the respective last days or the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 3.11.
3.9 Requirements of Law. If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Lender, or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Non- Excluded Taxes covered by Section 3.10 (including Non-
Excluded Taxes imposed solely by reason of any failure of such Lender
to comply with its obligations under Section 3.10(b)) and 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);
- 43 -
(b) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable,
provided that, in any such case, the Borrower may elect to convert the
Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving the
Agent at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Lender, upon demand, without duplication,
such amounts, if any, as may be required pursuant to Section 3.11. If any Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall provide prompt notice thereof to the Borrower, through the Agent,
certifying (x) that one of the events described in this paragraph (a) has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to the Borrower shall be conclusive and binding on the parties hereto in the
absence of manifest error. This covenant shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.10 Taxes.
(a) Except as provided below in this subsection, all payments
made by the Borrower under this Credit Agreement and any Notes shall be
made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
court, or governmental body, agency or other official, excluding taxes
measured by or imposed upon the overall net income of any Lender or its
applicable lending office, or any branch or affiliate thereof, and
- 44 -
all franchise taxes, branch taxes, taxes on doing business or taxes on
the overall capital or net worth of any Lender or its applicable
lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes, imposed: (i) by the jurisdiction
under the laws of which such Lender, applicable lending office, branch
or affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from
any amounts payable to the Agent or any Lender hereunder or under any
Notes, (A) the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in
this Credit Agreement and any Notes, provided, however, that the
Borrower shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable to
any Lender that is not organized under the laws of the United States of
America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as
possible thereafter the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to
the Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in
this subsection shall survive the termination of this Credit Agreement
and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such Lender,
deliver to the Borrower and the Agent (A) two (2) duly
completed copies of United States Internal Revenue Service
- 45 -
Form 1001 or 4224, or successor applicable form, as the case
may be, certifying that it is entitled to receive payments
under this Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (B)
an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding
tax;
(ii) deliver to the Borrower and the Agent two
(2) further copies of any such form or certification on or
before the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing
and complete such forms or certifications as may reasonably
be requested by the Borrower or the Agent; or
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (i)
represent to the Borrower (for the benefit of the Borrower and the
Agent) that it is not a bank within the meaning of Section 881(c)(3)(A)
of the Internal Revenue Code, (ii) agree to furnish to the Borrower on
or before the date of any payment by the Borrower, with a copy to the
Agent two (2) accurate and complete original signed copies of Internal
Revenue Service Form W-8, or successor applicable form certifying to
such Lender's legal entitlement at the date of such certificate to an
exemption from U.S. withholding tax under the provisions of Section
881(c) of the Internal Revenue Code with respect to payments to be made
under this Credit Agreement and any Notes (and to deliver to the
Borrower and the Agent two (2) further copies of such form on or before
the date it expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested by the
Borrower or the Agent for filing and completing such forms), and (iii)
agree, to the extent legally entitled to do so, upon reasonable request
by the Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably required
in order to 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
- 46 -
and such Lender so advises the Borrower and the Agent. Each Person that
shall become a Lender or a participant of a Lender pursuant to
subsection 11.3 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and statements
required pursuant to this subsection, provided that in the case of a
participant of a Lender the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and
statements to the Lender from which the related participation shall
have been purchased.
3.11 Indemnity. The Borrower promises to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan after the Borrower has given a notice thereof in
accordance with the provisions of this Credit Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. With respect to Eurodollar Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank Eurodollar market. The covenants of the Borrower set forth in this
Section 3.11 shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
3.12 Pro Rata Treatment. Except to the extent otherwise
provided herein:
(a) Loans. Each Revolving Loan, each payment or prepayment of
principal of any Revolving Loan or reimbursement obligations arising
from drawings under Letters of Credit, each payment of interest on the
Revolving Loans or reimbursement obligations arising from drawings
under Letters of Credit, each payment of Facility Fees, each payment
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of the Standby Letter of Credit Fee, each payment of the Trade Letter
of Credit Fee, each reduction of the Revolving Committed Amount and
each conversion or extension of any Revolving 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 Commitment Percentage 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. If such Lender's Commitment Percentage of
such borrowing is not made available to the Agent by such Lender within
two Business Days of the date of the related borrowing, (i) the Agent
shall notify the Borrower of the failure of such Lender to make such
amount available to the Agent and the Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum
applicable to Base Rate Loans hereunder, on demand, from the Borrower
and (ii) then the Borrower may, without waiving any rights it may have
against such Lender, borrow a like amount on an unsecured basis from
any commercial bank for a period ending on the date upon which such
Lender does in fact make such borrowing available, provided that at the
time such borrowing is made and at all times while such amount is
outstanding the Borrower would be permitted to borrow such amount
pursuant to Section 2.1 of this Credit Agreement.
3.13 Sharing of Payments. The Lenders agree among themselves that, in
the event that any Lender shall obtain payment in respect of any Loan, LOC
Obligations or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall promptly purchase from the other Lenders a participation in
such Loans, LOC Obligations and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares
- 48 -
as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan, LOC Obligations or other obligation in
the amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or the Agent shall fail to remit to the Agent or
any other Lender an amount payable by such Lender or the Agent to the Agent or
such other Lender pursuant to this Credit Agreement on the date when such amount
is due, such payments shall be made together with interest thereon for each date
from the date such amount is due until the date such amount is paid to the Agent
or such other Lender at a rate per annum equal to the Federal Funds Rate. If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.13 applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders under
this Section 3.13 to share in the benefits of any recovery on such secured
claim.
3.14 Place and Manner of Payments. 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 its offices at the Agent's office specified in
Schedule 2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Agent may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Borrower maintained with the Agent
(with notice to the Borrower). The Borrower shall, at the time it makes any
payment under this Credit Agreement, specify to the Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower hereunder
to which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof, the
Agent shall distribute such payment to the Lenders in such manner as the Agent
may determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 3.12(a)). The Agent will distribute
such payments to such Lenders, if any such payment is received prior to 12:00
Noon (Charlotte, North Carolina time) on a Business Day in like funds
- 49 -
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.
3.15 Mandatory Assignment. In the event any Lender delivers to the
Borrower any notice in accordance with Section 3.6 or any Lender requests
payment by the Borrower of any additional amounts pursuant to Section 3.10,
then, provided that no Default or Event of Default has occurred and is
continuing at such time, the Borrower may, at its own expense (such expense to
include any transfer fee payable to the Agent under Section 11.3(b)), and in its
sole discretion require such Lender to transfer and assign in whole or in part,
without recourse (in accordance with and subject to the terms and conditions of
Section 11.3(b)), all or part of its interests, rights and obligations under
this Credit Agreement to an Eligible Assignee which shall assume such assigned
obligations, provided that (i) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority and
(ii) the Borrower or such assignee shall have paid to the assigning Lender in
immediately available funds the principal of and interest accrued to the date of
such payment on the Loans made by it hereunder and all other amounts owed to it
hereunder.
SECTION 4
GUARANTY
4.1 The Guarantee. Each of the Guarantors hereby jointly and severally
guarantees to each Lender and the Agent as hereinafter provided the prompt
payment of the Borrower's Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Borrower's Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as mandatory cash collateralization or otherwise),
the Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Borrower's Obligations, the same will be
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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, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
4.2 Obligations Unconditional. The obligations of the Guarantors under
Section 4.1 hereof are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents, or any other agreement or instrument referred to
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Borrower's Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor of the Borrower's Obligations for amounts
paid under this Guaranty until such time as the Lenders 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. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Guarantor hereunder which shall remain absolute and unconditional as described
above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Borrower's Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any
of the Credit Documents or any other agreement or instrument referred
to therein shall be done or omitted;
(iii) the maturity of any of the Borrower's Obligations shall
be accelerated, or any of the Borrower's Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
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Credit Documents or any other agreement or instrument referred to
therein shall be waived or any other guarantee of any of the Borrower's
Obligations or any security therefor shall be released or exchanged
in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Agent or any
Lender or Lenders as security for any of the Borrower's Obligations
shall fail to attach or be perfected; or
(v) any of the Borrower's Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents
or any other agreement or instrument referred to therein, or against any other
Person under any other guarantee of, or security for, any of the Borrower's
Obligations.
4.3 Reinstatement. The obligations of the Guarantors under this Section
4 shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Borrower's Obligations
is rescinded or must be otherwise restored by any holder of any of the
Borrower's Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers. Without limiting the generality of the
provisions of this Section 4, each Guarantor hereby specifically waives the
benefits of N.C. Gen. Stat. xx.xx. 26- 7 through 26-9, inclusive. Each Guarantor
further agrees that such Guarantor shall have no right of recourse to security
for the Borrower's Obligations.
4.5 Remedies. The Guarantors agree that, to the fullest extent
permitted by law, as between the Guarantors, on the one hand, and the Agent and
the Lenders, on the other hand, the Borrower's Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 hereof (and shall be deemed
to have become automatically due and payable in the circumstances provided in
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said Section 9.2) for purposes of Section 4.1 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing the
Borrower's Obligations from becoming automatically due and payable) as against
any other Person and that, in the event of such declaration (or the Borrower's
Obligations being deemed to have become automatically due and payable), the
Borrower's Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
Section 4.1.
4.6 Rights of Contribution. The Guarantors hereby agree, as among
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below), each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence hereof and to subsection (b) below),
pay to such Excess Funding Guarantor an amount equal to such Guarantor's Pro
Rata Share (as defined below and determined, for this purpose, without reference
to the properties, assets, liabilities and debts of such Excess Funding
Guarantor) of such Excess Payment (as defined below). The payment obligation of
any Guarantor to any Excess Funding Guarantor under this Section 4.6 shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Guarantor under the other provisions of this Section 4, and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations. For purposes hereof, (i) "Excess Funding Guarantor" shall mean, in
respect of any obligations arising under the other provisions of this Section 4
(hereafter, the "Guaranteed Obligations"), a Guarantor that has paid an amount
in excess of its Pro Rata Share of the Guaranteed Obligations; (ii) "Excess
Payment" shall mean, in respect of any Guaranteed Obligations, the amount paid
by an Excess Funding Guarantor in excess of its Pro Rata Share of such
Guaranteed Obligations; and (iii) "Pro Rata Share", for the purposes of this
Section 4.6, shall mean, for any Guarantor, the ratio (expressed as a
percentage) of (a) the amount by which the aggregate present fair saleable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (b) the amount by which the aggregate present fair saleable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors, all as of the Closing Date (if any Guarantor becomes a
party hereto subsequent to the Closing Date, then for the purposes of this
Section 4.6 such subsequent Guarantor shall be deemed to have been a Guarantor
as of the Closing Date and the information pertaining to, and only pertaining
to, such Guarantor as of the date such Guarantor became a Guarantor shall be
deemed true as of the Closing Date).
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4.7 Continuing Guarantee. The guarantee in this Section 4 is a
continuing guarantee, and shall apply to all Borrower's Obligations whenever
arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions. The obligation of the Lenders to enter into
this Credit Agreement and to make the initial Loans (including the initial
advances on the Term Loan) or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) The Agent shall have received original counterparts of
this Credit Agreement executed by each of the parties hereto;
(b) The Agent shall have received an appropriate original
Revolving Note for each Lender, executed by the Borrower;
(c) The Agent shall have received an appropriate original Term
Note for each Lender, executed by the Borrower;
(d) The Agent shall have received all documents it may
reasonably request relating to the existence and good standing of each
of the Credit Parties, the corporate or other necessary authority for
and the validity of the Credit Documents, and any other matters
relevant thereto, all in form and substance reasonably satisfactory to
the Agent;
(e) The Agent shall have received a certificate executed by
the chief financial officer of the Borrower as of the Closing Date
stating that immediately after giving effect to this Credit Agreement
and the other Credit Documents, (i) the Borrower on a consolidated
basis is Solvent, (ii) no Default or Event of Default exists and (iii)
the representations and warranties set forth in Section 6 are true and
correct in all material respects;
(f) The Agent shall have received a legal opinion of Drinker
Xxxxxx & Xxxxx, counsel for the Credit Parties, dated as of the Closing
Date and substantially in the form of Schedule 5.1(f);
(g) The Agent shall have received a legal opinion of special
Alabama counsel for Xxxxx, dated as of the Closing Date and
substantially in the form of Schedule 5.1(g);
(h) The Agent shall have received a certificate in form and
substance satisfactory to the Agent executed by the chief financial
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officer of the Borrower as of the Closing Date stating that (i) there
does not exist any action, suit or proceeding, pending or, to the best
knowledge of such Person, threatened, in which there is a reasonable
possibility of an adverse decision, which would materially adversely
affect the ability of the Credit Parties taken as a whole to perform
their obligations under the Credit Documents or the ability of the
Lenders to exercise their rights thereunder; (ii) none of the Domestic
Subsidiaries of the Borrower has any assets or liabilities as of
December 3, 1995 or any cash flows for the 12 month period ended as of
December 3, 1995 other than as set forth on a schedule attached to such
certificate, except for (A) assets and cash flows of Xxxxx, Seal and
Xxxx Holding, (B) liabilities of Xxxxx or Seal to trade creditors in an
aggregate amount for both of such Persons not exceeding $7,000,000, (C)
liabilities of Xxxxx and Seal to the Borrower in respect of
intercompany loans and advances and (D) liabilities of Xxxx Europe to
the Borrower in respect of intercompany loans and advances in an
aggregate principal amount not to exceed $5,000,000; and (iii)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all other transactions contemplated by this Credit
Agreement to occur on such date, (A) each of the Credit Parties is
Solvent, (B) no Default or Event of Default exists and (C) the
representations and warranties set forth in Section 6 are true and
correct in all material respects;
(i) The Agent shall have received copies of insurance policies
or certificates of insurance of the Credit Parties evidencing liability
and casualty insurance meeting the requirements of the Credit
Documents;
(j) The Agent shall have received, for its own account and for
the accounts of the Lenders, all fees and expenses required by this
Credit Agreement or any other Credit Document to be paid on or before
the Closing Date; and
(k) The Agent shall have received such other documents,
agreements or information which may be reasonably requested by the
Agent.
5.2 Conditions to all Extensions of Credit. The obligations of each
Lender to make, convert or extend any Loan (including advances on the Term Loan)
and of the Issuing Lender to issue or extend Letters of Credit (including the
initial Loans (and the initial advance of the Term Loan) and the initial Letter
of Credit) are subject to satisfaction of the following conditions in addition
to satisfaction on the Closing Date of the conditions set forth in Section 5.1:
(i) The Borrower shall have delivered (A) in the case
of any Revolving Loan or any portion of the Term Loan, an
appropriate Notice of Borrowing or Notice of
Extension/Conversion or (B) in the case of any Letter of
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Credit, the Issuing Lender shall have received an appropriate
request for issuance in accordance with the provisions of
Section 2.2(b);
(ii) The representations and warranties set forth in
Section 6 shall be, subject to the limitations set forth
therein, true and correct in all material respects as of such
date (except for those which expressly relate to an earlier
date);
(iii) There shall not have been commenced against the
Borrower or any Guarantor an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or any case, proceeding or other action
for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and such involuntary
case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded;
(iv) No Default or Event of Default shall exist
and be continuing either prior to or after giving effect
thereto;
(v) No material adverse change shall have occurred
since November 27, 1994 in the condition (financial or
otherwise), business, management or prospects of the Borrower
and its Subsidiaries taken as a whole; and
(vi) Immediately after giving effect to the making of
such Loan (and the application of the proceeds thereof) or to
the issuance of such Letter of Credit, as the case may be, (A)
the sum of the aggregate principal amount of outstanding
Revolving Loans plus LOC Obligations outstanding shall not
exceed the aggregate Revolving Committed Amount, and (B) the
LOC Obligations shall not exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (ii), (iii), (iv), (v) and (vi) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
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6.1 Financial Condition. (a) The audited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as of November 27, 1994 and the
audited consolidated statements of earnings and statements of cash flows for the
years ended November 28, 1993 and November 27, 1994 have heretofore been
furnished to each Lender. Such financial statements (including the notes
thereto) (i) have been audited by Coopers & Xxxxxxx, (ii) have been prepared in
accordance with GAAP consistently, applied throughout the periods covered
thereby and (iii) present fairly in all material respects (on the basis
disclosed in the footnotes to such financial statements) the consolidated
financial position, results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such date and for such periods. The unaudited
interim balance sheets of the Borrower and its consolidated Subsidiaries as at
the end of, and the related unaudited interim statements of earnings and of cash
flows for, each fiscal quarterly period (other than the fourth quarter of fiscal
year 1995) ended after November 27, 1994 and prior to the Closing Date have
heretofore been furnished to each Lender. Such interim financial statements for
each such quarterly period, (i) have been prepared in accordance with the
requirements of the Securities and Exchange Commission for Form 10-Q and (ii)
present fairly in all material respects (on the basis disclosed in the footnotes
to such financial statements) the consolidated financial position, results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such date and for such periods. During the period from November 27, 1994 to
and including the Closing Date, there has been no sale, transfer or other
disposition by the Borrower or any of its Subsidiaries of any material part of
the business or property of the Borrower and its consolidated Subsidiaries,
taken as a whole, and no purchase or other acquisition by any of them of any
business or property (including any capital stock of any other person) material
in relation to the consolidated financial condition of the Borrower and its
consolidated Subsidiaries, taken as a whole, in each case, which, is not
reflected in the foregoing financial statements or in the notes thereto and has
not otherwise been disclosed in writing to the Lenders on or prior to the
Closing Date.
(b) The projected balance sheets and income statements of the Borrower
and its consolidated Subsidiaries for fiscal years 1996, 1997, 1998, 1999 and
2000, copies of which have heretofore been furnished to each Lender, are based
upon reasonable assumptions made known to the Lenders and upon information not
known to be incorrect or misleading in any material respect.
6.2 No Change. Since November 27, 1994, (a) there has been no
development or event relating to or affecting the Borrower or any of its
Subsidiaries which has had or would be reasonably expected to have a Material
Adverse Effect and (b) except as permitted under this Credit Agreement, no
dividends or other distributions have been declared, paid or made upon the
capital stock or other equity interest in the Borrower or any of its
Subsidiaries nor, except as otherwise permitted under this Credit Agreement,
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has any of the capital stock or other equity interest in the Borrower or any of
its Subsidiaries been redeemed, retired, purchased or otherwise acquired for
value by such Person.
6.3 Organization; Existence; Compliance with Law. Each of the Borrower
and its Subsidiaries (a) is a corporation duly organized, validly existing and
is in good standing under the laws of the jurisdiction of its incorporation or
organization, (b) has the corporate or other necessary power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
except to the extent that the failure to have such legal right would not be
reasonably expected to have a Material Adverse Effect, (c) is duly qualified as
a foreign entity and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not be reasonably expected to have
a Material Adverse Effect, and (d) is in compliance with all material
Requirements of Law, except to the extent that the failure to comply therewith
would not, in the aggregate, be reasonably expected to have a Material Adverse
Effect.
6.4 Power; Authorization; Enforceable Obligations. Each of the Credit
Parties has the corporate or other necessary power and authority, and the legal
right, to make, deliver and perform the Credit Documents to which it is a party,
and in the case of the Borrower, to borrow hereunder, and has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of the Credit Documents to which such Credit Party is a party,
except for consents, authorizations, notices and filings described in Schedule
6.4, all of which have been obtained or made or have the status described in
such Schedule 6.4. This Credit Agreement has been, and each other Credit
Document to which any Credit Party is a party will be, duly executed and
delivered on behalf of the Credit Parties. This Credit Agreement constitutes,
and each other Credit Document to which any Credit Party is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
such Credit Party enforceable against such party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
- 58 -
6.5 No Legal Bar. The execution, delivery and performance of the Credit
Documents by the Credit Parties, the borrowings hereunder and the use of the
proceeds thereof (a) will not violate any Requirement of Law or contractual
obligation of the Borrower or any of its Subsidiaries in any respect that would
reasonably be expected to have a Material Adverse Effect, (b) will not result
in, or require, the creation or imposition of any Lien on any of the properties
or revenues of the Borrower or any of its Subsidiaries pursuant to any such
Requirement of Law or contractual obligation and (c) will not violate or
conflict with any provision of any Credit Party's articles of incorporation or
by-laws.
6.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the best
knowledge of the Credit Parties, threatened by or against the Borrower or any of
its Subsidiaries or against any of their respective properties or revenues which
(a) relates to any of the Credit Documents or any of the transactions
contemplated hereby or thereby or (b) would be reasonably expected to have a
Material Adverse Effect.
6.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its contractual obligations in any
respect which would be reasonably expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its material real property, and good title to, or a
valid leasehold interest in, all its other material property, and none of such
property is subject to any Lien, except for Permitted Liens.
6.9 Intellectual Property. Each of the Borrower and its Subsidiaries
owns, or has the legal right to use, all United States trademarks, tradenames,
copyrights, technology, know-how and processes 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. Except as provided on
Schedule 6.9, 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. Except as previously disclosed in
writing to the Lenders on or prior to the Closing Date, no Requirement of Law or
contractual obligation of the Borrower or any of its Subsidiaries would be
reasonably expected to have a Material Adverse Effect.
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6.11 Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all United States federal income tax returns and all other
material tax returns which, to the best knowledge of the Credit Parties, are
required to be filed and has paid (a) all taxes shown to be due and payable on
said returns or (b) all taxes shown to be due and payable on any assessments of
which it has received notice made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any (i) taxes, fees or other charges with
respect to which the failure to pay, in the aggregate, would not have a Material
Adverse Effect or (ii) taxes, fees or other charges the amount or validity of
which are currently being contested and with respect to which reserves in
conformity with GAAP have been provided on the books of such Person), and no tax
Lien has been filed, and, to the best knowledge of the Credit Parties, no claim
is being asserted, with respect to any such tax, fee or other charge.
6.12 ERISA. Except as set forth in Schedule 6.12 attached hereto or as
could 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 Termination Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any Termination Event could reasonably
be expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the applicable provisions of ERISA, the
Code, and any other applicable federal or state laws; and (iv) no lien in favor
of the PBGC or a Plan has arisen or is reasonably likely to arise on account of
any Plan.
(b) The actuarial present value of all "benefit liabilities" under each
Single Employer Plan (determined within the meaning of Section 401(a)(2) of the
Code, utilizing the actuarial assumptions used to fund such Plans), whether or
not vested, did not, as of the last annual valuation date prior to the date on
which this representation is made or deemed made, exceed the current value of
the assets of such Plan allocable to such accrued liabilities.
(c) Neither the Borrower, any of the Subsidiaries of the Borrower nor
any ERISA Affiliate has incurred, or, to the best knowledge of the Credit
Parties, could be reasonably expected to incur, any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower,
any of the Subsidiaries of the Borrower nor any ERISA Affiliate would become
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subject to any withdrawal liability under ERISA if the Borrower, any of the
Subsidiaries of the Borrower or any ERISA Affiliate were to withdraw completely
from all Multiemployer Plans and Multiple Employer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. Neither the Borrower, any of the Subsidiaries of the Borrower nor
any ERISA Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated (within
the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or may subject the Borrower,
any of the Subsidiaries of the Borrower or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code,
or under any agreement or other instrument pursuant to which the Borrower, any
of the Subsidiaries of the Borrower or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability.
(e) 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 with such sections.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the financing transactions contemplated thereunder will involve
any transaction which is subject to the prohibitions of Section 406 of ERISA or
in connection with which a tax could be imposed pursuant to Section 4975 of the
Code. The representation by the Credit Parties in the preceding sentence is made
in reliance upon and subject to the accuracy of the Lenders' representation in
Section 11.16 with respect to their source of funds and is subject, in the event
that the source of the funds used by the Lenders in connection with this
transaction is an insurance company's general asset account, to the continued
validity of Department of Labor Interpretative Bulletin 75-2, 29 C.F.R. ss.
2509.75-2(b) (November 13, 1986) or the issuance of any other similar relief or
prohibited transaction exemption, to the effect that assets in an insurance
company's general asset account do not constitute assets of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan" within the meaning
of Section 4975(e)(1) of the Code.
6.13 Governmental Regulations, Etc.
(a) No part of the proceeds of the Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation G or Regulation U, or
for the purpose of purchasing or carrying or trading in any securities,
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except for the Stock Repurchase. If requested by any Lender or the
Agent, the Borrower will furnish to the Agent and each Lender a
statement to the foregoing effect in conformity with the requirements
of FR Form U-1 referred to in said Regulation U. No indebtedness being
reduced or retired out of the proceeds of the Loans was or will be
incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any "margin security" within the
meaning of Regulation T. "Margin stock" within the meanings of
Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Borrower and its Subsidiaries. None of the
transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans)
will violate or result in a violation of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, or
regulations issued pursuant thereto, or Regulation G, T, U or X.
(b) Neither the Borrower nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act or the Investment Company Act of 1940, each
as amended. In addition, neither the Borrower nor any of its
Subsidiaries is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, and
is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(c) As of the Closing Date, no director, executive officer or
principal shareholder of the Borrower or any of its Subsidiaries is a
director, executive officer or principal shareholder of any Lender. For
the purposes hereof the terms "director", "executive officer" and
"principal shareholder" (when used with reference to any Lender) have
the respective meanings assigned thereto in Regulation O issued by the
Board of Governors of the Federal Reserve System.
(d) Each of the Borrower and its Subsidiaries has obtained all
material licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its respective Property
and to the conduct of its business.
(e) Neither the Borrower nor any of its Subsidiaries is in
violation of any applicable statute, regulation or ordinance of the
United States of America, or of any state, city, town, municipality,
county or any other jurisdiction, or of any agency thereof (including
without limitation, environmental laws and regulations), which
violation could reasonably be expected to have a Material Adverse
Effect.
- 62 -
(f) Each of the Borrower and its Subsidiaries is current with
all material reports and documents, if any, required to be filed with
any state or federal securities commission or similar agency and is in
full compliance in all material respects with all applicable rules and
regulations of such commissions.
6.14 Subsidiaries. Schedule 6.14 sets forth all the Subsidiaries of the
Borrower at the Closing Date, the jurisdiction of their incorporation and the
direct or indirect ownership interest of the Borrower therein.
6.15 Purpose of Loans and Letters of Credit. The proceeds of the Loans
hereunder shall be used solely by the Borrower (i) to finance or refinance the
Stock Repurchase (if any), (ii) for the working capital and general corporate
purposes (other than acquisitions) of the Borrower and its Domestic Subsidiaries
and (iii) to finance acquisitions by the Borrower, provided that (A) the
aggregate cumulative amount of all Loan proceeds used to finance all such
acquisitions subsequent to the Closing Date shall not exceed $25,000,000 plus
the Available Reinvestment Amount and (B) no more than $15,000,000 of Loan
proceeds plus the Available Reinvestment Amount shall be used to finance any
single acquisition. 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 Borrower in the ordinary course of business.
6.16 Environmental Matters. Except as set forth in Schedule 6.16
attached hereto or as could not reasonably be expected to have a Material
Adverse Effect:
(a) Each of the facilities and properties owned, leased or
operated by the Borrower or any of its Domestic 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 Domestic Subsidiaries (the
"Businesses"), and there are no conditions relating to the Businesses
or Properties that could give rise to liability under any applicable
Environmental Laws.
(b) None of the Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Properties in amounts or concentrations that constitute a violation of,
or could give rise to liability under, Environmental Laws.
(c) Neither the Borrower nor any of its Domestic Subsidiaries
has received any written 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 that remains unresolved, nor does the Borrower or any
of its Domestic Subsidiaries have knowledge or reason to believe that
any such notice will be received or is being threatened.
- 63 -
(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, to the
best knowledge of the Credit Parties, any other location, in each case
by or on behalf of the Borrower or any of its Domestic Subsidiaries in
violation of, or in a manner that would be reasonably likely to give
rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party,
threatened, under any Environmental Law to which the Borrower or any of
its Domestic 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 Domestic Subsidiaries, the Properties or the
Businesses.
(f) There has been no release or, threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations (including, without
limitation, disposal) of the Borrower or any of its Domestic
Subsidiaries in connection with the Properties or otherwise in
connection with the Businesses, in violation of Environmental Laws.
6.17 Schedule 13E-4. The disclosure set forth in the Schedule 13E-4
attached hereto as Schedule 1.1C complies in all material respects with the
requirements for Schedule 13E-4 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants. The Borrower will furnish, or cause to be
furnished, to the Agent:
(a) Annual Financial Statements. As soon as available, and
in any event within 90 days after the close of each fiscal year of the
Borrower and its Subsidiaries, a consolidated balance sheet and income
statement of the Borrower and its Subsidiaries, as of the end of such
- 64 -
fiscal year, together with related consolidated statements of
operations and retained earnings and of cash flows for such fiscal
year, setting forth in comparative form consolidated figures for the
preceding fiscal year, all such financial information described above
to be in reasonable form and detail and audited by independent
certified public accountants of recognized national standing reasonably
acceptable to the Agent and whose opinion shall be to the effect that
such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not
be limited as to the scope of the audit or qualified as to the status
of the Borrower and its Subsidiaries as a going concern; provided that,
the delivery within the time period specified above of the Borrower's
Annual Report on Form 10-K for any fiscal year prepared in compliance
with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
subsection (a) for such period.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the
Borrower and its Subsidiaries (other than the fourth fiscal quarter, in
which case 90 days after the end thereof) a consolidated balance sheet
and income statement of the Borrower and its Subsidiaries, as of the
end of such fiscal quarter, together with related consolidated
statements of operations and retained earnings and of cash flows for
such fiscal quarter in each case setting forth in comparative form
consolidated figures for the corresponding period of the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of the chief financial officer of the
Borrower to the effect that such quarterly financial statements fairly
present in all material respects the financial position of the Borrower
and its Subsidiaries and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit
adjustments; provided that, the delivery within the time period
specified above of the Borrower's Annual Report on Form 10-Q for any
fiscal quarter prepared in compliance with the requirements therefor
and filed with the Securities and Exchange Commission shall be deemed
to satisfy the requirements of this subsection (a) for such period.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer of the Borrower;
substantially in the form of Schedule 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.11 by
calculation thereof as of the end of each such fiscal period and (ii)
stating that no Default or Event of Default exists, or if any Default
- 65 -
or Event of Default does exist, specifying the nature and extent
thereof and what action the Borrower proposes to take with respect
thereto.
(d) Annual Business Plan and Budgets. At least 90 days after
the end of each fiscal year of the Borrower, beginning with the fiscal
year ending December 1, 1996, an annual business plan and budget of the
Borrower containing, among other things, projected financial statements
for the next fiscal year.
(e) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed Section 7.11 of this Credit Agreement and stating
further whether, in the course of their audit, they have become aware
of any Default or Event of Default under such Section 7.11 and, if any
such Default or Event of Default exists, specifying the nature and
extent thereof.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to the Borrower or any of its Subsidiaries in connection
with any annual, interim or special audit of the books of such Person.
(g) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or, if
material, from, the Securities and Exchange Commission, or any
successor agency, and copies of all financial statements, proxy
statements, notices and reports as the Borrower or any of its
Subsidiaries shall send to its shareholders or to a holder of any
Indebtedness owed by the Borrower or any of its Subsidiaries in its
capacity as such a holder and (ii) upon the request of the Agent, all
reports and written information to and from the United States
Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.
(h) Notices. Upon a Credit Party obtaining knowledge thereof,
the Borrower will give written notice to the Agent immediately of (a)
the occurrence of an event or condition consisting of a Default or
Event of Default, specifying the nature and existence thereof and what
action the Credit Parties propose to take with respect thereto, and (b)
the occurrence of any of the following with respect to the Borrower or
any of its Subsidiaries (i) the pendency or commencement of any
litigation, arbitral or governmental proceeding against such Person
which if adversely determined is likely to have a Material Adverse
- 66 -
Effect, (ii) the institution of any proceedings against such Person
with respect to, or the receipt of notice by such Person of potential
liability or responsibility for violation, or alleged violation of any
federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, the violation of which would likely
have a Material Adverse Effect, or (iii) any notice or determination
concerning the imposition of any withdrawal liability by a
multiemployer Plan against such Person or any ERISA Affiliate, the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA or the
termination of any Plan.
(i) ERISA. Upon any of the Credit Parties obtaining knowledge
thereof, the Borrower will give written notice to the Agent promptly
(and in any event within five business days) of: (i) of any event or
condition, including, but not limited to, any Reportable Event, that
constitutes, or might reasonably lead to, a Termination Event; (ii)
with respect to any Multiemployer Plan, the receipt of notice as
prescribed in ERISA or otherwise of any withdrawal liability assessed
against the Borrower or any of its ERISA Affiliates, or of a
determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which the Borrower, any of the
Subsidiaries of the Borrower or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
that 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 principal financial officer
of the Borrower briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the Borrower shall furnish the
Agent and the Lenders with such additional information concerning any
Plan as may be reasonably requested, including, but not limited to,
copies of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(j) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the Borrower or any of its Subsidiaries as
the Agent or the Required Lenders may reasonably request.
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7.2 Preservation of Existence and Franchises. Except as otherwise
permitted pursuant to the terms of Section 8.4, the Borrower will, and will
cause each of its Subsidiaries to, do all things necessary to preserve and keep
in full force and effect its existence, material rights and franchises and
authority.
7.3 Books and Records. The Borrower will, and will cause each of its
Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with GAAP.
7.4 Compliance with Law. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities, applicable to
it and its property if noncompliance with any such law, rule, regulation, order
or restriction would have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness. The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge (i) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, (ii) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (iii) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that the Borrower and
its Subsidiaries shall not be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate accruals therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) would give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) would have a Material Adverse Effect.
7.6 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice.
7.7 Maintenance of Property. The Borrower will, and will cause each of
its Subsidiaries to, maintain and preserve its properties and equipment material
to the conduct of its business in good repair, working order and condition,
normal wear and tear excepted, and will make, or cause to be made, in such
properties and equipment from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper, to the extent and in the manner customary for companies in similar
businesses.
7.8 Performance of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, perform in all material respects all of its obligations
- 68 -
under the terms of all material agreements, indentures, mortgages, security
agreements or other debt instruments to which it is a party or by which it is
bound.
7.9 Use of Proceeds. The Borrower will use the proceeds of the Loans
and will use the Letters of Credit solely for the purposes set forth in Section
6.15.
7.10 Audits/Inspections. Upon reasonable notice and during normal
business hours, the Borrower will, and will cause each of its Subsidiaries to,
permit representatives appointed by the Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Agent or its representatives to
investigate and verify the accuracy of information provided to the Lenders and
to discuss all such matters with the officers, employees and representatives of
such Person.
7.11 Financial Covenants.
(a) Consolidated Net Worth. Consolidated Net Worth at all
times shall be no less than $__________ [85% of Consolidated Net Worth
as of the Closing Date], reduced on and after the date of the Stock
Repurchase by the amount of the reduction (not to exceed $93,000,000),
as determined in accordance with GAAP, in the net worth of the Borrower
and its consolidated Subsidiaries resulting from the Stock Repurchase
and increased on a cumulative basis by (i) as of the last day of each
fiscal year commencing with the last day of fiscal year 1996 by an
amount equal to the greater of (A) $0 or (B) 50% of the excess of (1)
Consolidated Net Income for the fiscal year then ended over (2)
dividends and other distributions to shareholders by the Borrower and
its consolidated Subsidiaries for the fiscal year then ended and (ii)
upon the consummation of any Equity Transaction on or after the Closing
Date, an amount equal to 85% of the Net Proceeds of such Equity
Transaction.
(b) Consolidated Leverage Ratio. The Consolidated Leverage
Ratio at each Calculation Date shall be no greater than the following
proportions:
Period Ratio
------ -----
For any first fiscal 3.25 to 1.00
quarter period, second
fiscal quarter period or
fourth fiscal quarter
period occurring from
the Closing Date
through the last day of
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fiscal year 1996 of the
Borrower
For any third fiscal 3.75 to 1.00
quarter period occurring
from the Closing Date
through the last day of
fiscal year 1996 of the
Borrower
For any first fiscal 3.00 to 1.00
quarter period, second
fiscal quarter period or
fourth fiscal quarter
period occurring from
the first day of fiscal
year 1997 of the Borrower
through the last day of
such fiscal year
For any third fiscal 3.50 to 1.00
quarter period occurring
from the first day of
fiscal year 1997 of the
Borrower through the last
day of such fiscal year
For any first fiscal 2.75 to 1.00
quarter period, second
fiscal quarter period or
fourth fiscal quarter
period occurring from
the first day of fiscal
year 1998 of the Borrower
through the last day of
such fiscal year
For any third fiscal 3.25 to 1.00
quarter period occurring
from the first day of
fiscal year 1998 of the
Borrower through the last
day of such fiscal year
For any first fiscal 2.50 to 1.00
quarter period, second
fiscal quarter period or
fourth fiscal quarter
period occurring from
the first day of fiscal
year 1999 of the Borrower
and thereafter
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For any third fiscal 3.00 to 1.00
quarter period occurring
from the first day of
fiscal year 1999 of the
Borrower and thereafter
(c) Consolidated Fixed Charge Coverage Ratio. The Consolidated
Fixed Charge Coverage Ratio at each Calculation Date shall be no less
than 1.45 to 1.00.
(d) Consolidated Interest Coverage Ratio. The Consolidated
Interest Coverage Ratio at each Calculation Date shall be no less than
2.50 to 1.00.
7.12 Additional Credit Parties. Within thirty (30) days of any Person
becoming a Material Subsidiary of the Borrower or in the event that the Borrower
elects to cause any other present or future direct or indirect Subsidiary of the
Borrower to become a Guarantor hereunder, the Borrower shall so notify the Agent
and shall cause such Person to (a) execute a Joinder Agreement in substantially
the same form as Schedule 7.12 attached hereto and (b) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, certified corporate resolutions and
other corporate documents of such Person and favorable opinions of counsel to
such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to above), all
in form, content and scope reasonably satisfactory to the Agent.
Notwithstanding any provision of this Credit Agreement to the contrary,
in the event that any Guarantor shall not be or that any Guarantor shall cease
to be a Material Subsidiary in accordance with the terms of this Credit
Agreement, then, upon written request of the Borrower to the Agent and provided
that no Default or Event of Default shall exist at such time (1) such Guarantor,
automatically and without further act on the part of the Agent or the Lenders,
shall cease to be a Guarantor and shall be released from its obligations
hereunder and (2) the Agent (on behalf of the Lenders) shall thereupon execute
such documents and take such other action reasonably requested by the Borrower
to cause such Guarantor to be released from its obligations arising hereunder.
7.13 Ownership of Subsidiaries; Limitation of Foreign Operations.
(a) Except to the extent otherwise provided in Section 8.4(b), Section 8.5 and
clause (xv) of the definition of "Permitted Investments" set forth in Section
1.1 and Section 8.11, the Borrower shall, directly or indirectly, own at all
times 100% of the capital stock of each of its Subsidiaries.
(b) (i) The Borrower and its Domestic Subsidiaries shall own
at all times at least 75% of Consolidated Total Assets and (ii) as of
each Calculation Date, the portion attributable to the Borrower and its
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Domestic Subsidiaries of Consolidated Net Income for the four quarter
then ended shall be at least 75% of Consolidated Net Income for such
period; provided, however, that the parties hereto hereby agree that,
at such time, if any, as the Foreign Subsidiaries of the Borrower shall
have obtained bank financing for their working capital and general
corporate needs in such amounts, on such terms (including without
limitation intercreditor arrangements between the provider(s) of such
financing and the Lenders) and from such lenders as shall be
satisfactory to the Lenders in their sole reasonable discretion, the
Credit Parties and the Lenders shall enter into an agreement amending
this Credit Agreement to eliminate this Section 7.13(b).
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness. The Borrower will not, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower and any of its Subsidiaries
existing as of the Closing Date set forth in Schedule 8.1 (and
renewals, refinancings and extensions thereof on terms and conditions
no less favorable to such Person than such existing Indebtedness);
(c) purchase money Indebtedness (including Capital Leases)
hereafter incurred by the Borrower or any of its Foreign Subsidiaries
to finance the purchase of fixed assets provided that (i) the aggregate
principal amount of such Indebtedness plus the aggregate outstanding
principal amount of Indebtedness permitted pursuant to clause (b) below
and clause (h)(i) below shall not exceed $6,000,000 at any time, (ii)
such Indebtedness when incurred shall not exceed the purchase price of
the asset(s) financed and (iii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(d) unsecured Indebtedness of the Borrower or any of its
Foreign Subsidiaries with respect to letters of credit (other than
Letters of Credit issued hereunder) provided that the aggregate maximum
amount available to be drawn under all such letters of credit, together
with all unreimbursed drawings with respect thereto, shall not exceed
$3,000,000 at any time outstanding;
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(e) obligations of the Borrower in respect of interest rate
protection agreements, foreign currency exchange, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements entered into in order to manage existing or
anticipated interest rate, exchange rate or commodity price risks and
not for speculative purposes;
(f) obligations in connection with any Permitted Receivables
Financing;
(g) intercompany Indebtedness of Xxxxx, Seal and Xxxx Europe
owing to the Borrower to the extent permitted by the definition of
"Permitted Investments" set forth in Section 1.1; and
(h) in addition to the Indebtedness otherwise permitted by
this Section 8.1,
(i) other Indebtedness hereafter incurred by the
Borrower or any of its Foreign Subsidiaries provided
that (A) in the case of any such Indebtedness
incurred by the Borrower, the loan documentation with
respect to such Indebtedness shall not contain
covenants or default provisions relating to the
Borrower and its Subsidiaries that are more
restrictive than the covenants and default provisions
contained in the Credit Documents, (B) on the date of
incurrence of such Indebtedness after giving effect
on a Pro Forma Basis to the incurrence of such
Indebtedness and to the concurrent retirement of any
other Indebtedness of the Borrower or any of its
Subsidiaries, no Default or Event of Default would
exist hereunder and (C) the aggregate principal
amount of such Indebtedness plus the aggregate
outstanding principal amount of Indebtedness
permitted pursuant to clauses (b) and (c) above shall
not exceed $6,000,000 at any time; and
(ii) (A) Guaranty Obligations of the Borrower with
respect to any Indebtedness of a Foreign Subsidiary
permitted under this Section 8.1 and (B) Guaranty
Obligations of any Subsidiary of the Borrower that is
a Guarantor with respect to any Indebtedness of the
Borrower permitted under this Section 8.1.
8.2 Liens. The Borrower will not, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or permit to exist any Lien
with respect to any of their Property, whether now owned or after acquired,
except for Permitted Liens.
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8.3 Nature of Business. Neither the Borrower nor any of its
Subsidiaries will substantively alter the character or conduct of the business
conducted by any such Person as of the Closing Date.
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc. The
Borrower will not, nor will it permit any of its Subsidiaries to:
(a) dissolve, liquidate or wind up their affairs, or enter
into any transaction of merger or consolidation; provided, however,
that, so long as no Default or Event of Default would be directly or
indirectly caused as a result thereof, (i) the Borrower may merge or
consolidate with any of its Subsidiaries provided that the Borrower is
the surviving corporation; (ii) any Domestic Subsidiary of the Borrower
may merge or consolidate with any other Domestic Subsidiary of the
Borrower; (iii) any Domestic Subsidiary of the Borrower may merge or
consolidate with any Foreign Subsidiary of the Borrower provided that
such Domestic Subsidiary is the surviving corporation; (iv) any Foreign
Subsidiary of the Borrower may merge or consolidate with any other
Foreign Subsidiary of the Borrower; and (v) any Wholly-Owned Subsidiary
of the Borrower may dissolve, liquidate or wind up its affairs at any
time;
(b) sell, lease, transfer or otherwise dispose of any Property
(including without limitation pursuant to any sale and leaseback
transaction) other than (i) the sale of inventory in the ordinary
course of business for fair consideration, (ii) the sale or disposition
of machinery and equipment no longer used or useful in the conduct of
such Person's business, (iii) in a Permitted Receivables Financing,
(iv) the Fresno Asset Sale, provided that the Borrower shall (A)
immediately repay or prepay in full the industrial revenue bond
financing in an outstanding principal amount as of the Closing Date of
approximately $1,600,000 relating to such assets and (B) prepay the
Loans in connection with such asset sale to the extent required by
Section 3.3(b)(iii)(B) and (v) other sales of assets, provided that (A)
after giving effect on a Pro Forma Basis to such sale or other
disposition, no Default or Event of Default would exist hereunder and
(B) the Borrower shall give notice to the Agent and each of the Lenders
specifying the anticipated or actual date of such asset sale, briefly
describing the assets sold or to be sold and setting forth the net book
value of such assets and the aggregate consideration and Net Proceeds
to be received for such assets in connection with such asset sale, and
thereafter the Borrower shall (1) within the period of twelve months
following the consummation of such asset sale (with respect to any such
asset sale, the "Application Period"), apply (or cause its applicable
Subsidiary to apply) an amount equal to the Net Proceeds of such asset
sale to the purchase, acquisition or, in the case of real property,
construction of Alternative Assets in a transaction complying with
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all of the terms and conditions of this Credit Agreement or (2) prepay
the Loans in connection with such asset sale to the extent required by
Section 3.3(b)(iii); or
(c) except as otherwise permitted by Section 8.4(a), acquire
all or any portion of the capital stock or securities of any other
Person or purchase, lease or otherwise acquire (in a single transaction
or a series of related transactions) all or any substantial part of the
Property of any other Person; provided that, subject to the terms of
Section 8.8, after giving effect on a Pro Forma Basis to such
transaction, the Consolidated Leverage Ratio shall not be greater than
3.00 to 1.00.
8.5 Advances, Investments, Loans, etc. The Borrower will not, nor will
it permit any of its Subsidiaries to, make Investments in or to any Person,
except for Permitted Investments.
8.6 Restricted Payments. The Borrower will not, nor will it permit any
of its Subsidiaries to, directly or indirectly declare, order, make or set apart
any sum for or pay any Restricted Payment, except (i) to make dividends payable
solely in the same class of capital stock of such Person, (ii) to make dividends
or other distributions payable to the Borrower (directly or indirectly through
Subsidiaries of the Borrower), (iii) as permitted by Section 8.7 and (iv) other
Restricted Payments made by the Borrower, provided that, after giving effect to
any such Restricted Payment on a pro forma basis (determined by calculating the
Consolidated Fixed Charge Coverage Ratio for the four quarter period ended as of
the last day of the most recent fiscal quarter with respect to which the Agent
shall have received the Required Financial Information, except that Restricted
Payments included in such calculation shall be the Restricted Payment proposed
to be made and all other Restricted Payments during the then current fiscal
quarter of the Borrower plus all Restricted Payments for the three quarters
ending as of the last day of the most recent fiscal quarter), no Default or
Event of Default would exist hereunder.
8.7 Prepayments of Indebtedness, etc. The Borrower will not, nor will
it permit any of its Subsidiaries to, (i) after the issuance thereof, amend or
modify (or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof, (ii)(A) if any Default or Event of
Default has occurred and is continuing or would be directly or indirectly caused
as a result thereof, make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment or redemption or acquisition for
value of (including without limitation, by way of depositing money or securities
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with the trustee with respect thereto before due for the purpose of paying when
due), refund, refinance or exchange of any other Indebtedness (other than
Subordinated Indebtedness) or (B) make (or give any notice with respect thereto)
any voluntary or optional payment or prepayment or redemption 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), refund, refinance or exchange of any Indebtedness subordinated to the
obligations of the Borrower or the Guarantors hereunder or (C) amend, modify or
change its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document) where such change
would have a Material Adverse Effect.
8.8 Transactions with Affiliates. The Borrower will not, nor will it
permit any of its Subsidiaries to, enter into or permit to exist any transaction
or series of transactions with any officer, director, shareholder, Subsidiary or
Affiliate of such Person other than (a) advances of working capital to the
Borrower, (b) transfers of cash and assets to the Borrower, (c) transactions
permitted by Section 8.1(g), Section 8.4(a), Section 8.5 or Section 8.6, (d)
normal compensation and reimbursement of expenses of officers and directors and
(e) except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transactions with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.9 Fiscal Year. Without the prior written approval of the Agent, the
Borrower will not, nor will it permit any of its Subsidiaries to, change its
fiscal year.
8.10 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions, etc. The Borrower will not, nor will it permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual encumbrance
or restriction of any kind on the ability of any such Person to (a) pay
dividends or make any other distribution on any of such Person's capital stock,
(b) subject to subordination provisions, pay any Indebtedness owed to the
Borrower or any other Credit Party, (c) make loans or advances to any other
Credit Party or (d) transfer any of its Property to any other Credit Party,
except for encumbrances or restrictions existing under or by reason of (i)
customary non-assignment provisions in any lease governing a leasehold interest
and (ii) this Credit Agreement and the other Credit Documents.
8.11 Issuance and Sale of Subsidiary Stock. The Borrower will not, nor
will it permit any of its Subsidiaries to, except to qualify directors where
required by applicable law and except as otherwise permitted under the terms
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of Section 8.4(b), sell, transfer or otherwise dispose of, any shares of capital
stock of any of its Subsidiaries or permit any of its Subsidiaries to issue,
sell or otherwise dispose of, any shares of capital stock of any of its
Subsidiary.
8.12 Sale Leasebacks. Except as otherwise permitted by Section 8.4(c),
the Borrower will not, nor will it permit any of its Subsidiaries to, directly
or indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed), whether now owned or hereafter
acquired, (i) which such Person has sold or transferred or is to sell or
transfer to any other Person other than 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.
8.13 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), the Borrower will not, nor will it permit any of its Subsidiaries to,
enter into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation.
8.14 Operating Lease Obligations. The Borrower will not, nor will it
permit any of its Subsidiaries to, enter into, assume or permit to exist any
obligations for the payment of rental under Operating Leases which in the
aggregate for all such Persons would exceed $10,000,000 in any fiscal year.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Loans or of any
reimbursement obligations arising from drawings
under Letters of Credit, or
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(ii) default, and such defaults shall continue for
five (5) or more days, in the payment when due of any interest
on the Loans or on any reimbursement obligations arising from
drawings under Letters of Credit, or of any Fees or other
amounts owing hereunder, under any of the other Credit
Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was deemed to have
been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.10, 7.12, 7.13 or 8.1 through 8.14, inclusive, or
(ii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) or this Section
9.1) contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a responsible officer of a Credit Party becoming
aware of such default or notice thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents (subject to applicable grace or
cure periods, if any), or (ii) any Credit Document shall fail to be in
full force and effect or to give the Agent and/or the Lenders the
liens, rights, powers and privileges purported to be created thereby;
or
(e) Guaranties. The guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on behalf
of such Guarantor shall deny or disaffirm such Guarantor's obligations
under such guaranty, or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to any guaranty; or
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(f) Bankruptcy Event. Any Bankruptcy Event shall occur with
respect to the Borrower or any of its Subsidiaries; or
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $10,000,000 in the aggregate for the Borrower
and its Subsidiaries taken as a whole, (i) the Borrower or any of its
Subsidiaries shall (A) default in any payment (beyond the applicable
grace period with respect thereto, if any) with respect to any such
Indebtedness, or (B) default in the observance or performance relating
to such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or
holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any notice or
lapse of time is required), any such Indebtedness to become due prior
to its stated maturity; or (ii) any such Indebtedness shall be declared
due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a
liability of $10,000,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such
event or condition could 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, any Subsidiary of the Borrower or any ERISA Affiliate
in favor of the PBGC or a Plan; (2) a Termination Event shall occur
with respect to a Single Employer Plan, which is, in the reasonable
opinion of the Agent, likely to result in the termination of such Plan
for purposes of Title IV of ERISA; (3) a Termination Event shall occur
with respect to a Multiemployer Plan or Multiple Employer Plan, which
is, in the reasonable opinion of the Agent, likely to result in (i) the
termination of such Plan for purposes of Title IV of ERISA, or (ii) the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
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incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan;
or (4) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability; or
(j) Stock Repurchase. (i) The aggregate price paid by the
Borrower for the Stock Repurchase, together with related transaction
costs, shall exceed $93,000,000, or (ii) on the date of the
consummation of the Stock Repurchase, if any, and immediately after
giving effect thereto (but not thereafter), there shall be less than
$30,000,000 of availability under the Revolving Commitments of the
Lenders; or
(k) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by the Required Lenders or cured to the satisfaction of the Required
Lenders (pursuant to the voting procedures in Section 11.6), the Agent shall,
upon the request and direction of the Required Lenders, by written notice to the
Credit Parties take any of the following actions without prejudice to the rights
of the Agent or any Lender to enforce its claims against the Credit Parties,
except as otherwise specifically provided for herein:
(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 any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower.
(iii) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
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occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(iv) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations arising from drawings under Letters
of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees
and other indebtedness or obligations owing to the Lenders hereunder
automatically shall immediately become due and payable without the giving of any
notice or other action by the Agent.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment. Each Lender hereby designates and appoints
NationsBank of North Carolina, N.A. as administrative agent (in such capacity as
Agent hereunder, the "Agent") of such Lender to act as specified herein and the
other Credit Documents, and each such Lender hereby authorizes the Agent as the
agent for such Lender, to take such action on its behalf under the provisions of
this Credit Agreement and the other Credit Documents and to exercise such powers
and perform such duties as are expressly delegated by the terms hereof and of
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
herein and in the other Credit Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. Except as otherwise expressly provided herein, the provisions
of this Section are solely for the benefit of the Agent and the Lenders and none
of the Credit Parties shall have any rights as a third party beneficiary of the
provisions hereof. In performing its functions and duties under this Credit
Agreement and the other Credit Documents, the Agent shall not 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 any Credit Party.
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10.2 Delegation of Duties. The Agent may execute any of their
respective duties hereunder or under the other Credit Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection herewith or in connection with any of the other Credit
Documents (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any of the Credit
Parties contained herein or in any of the other Credit Documents or in any
certificate, report, document, financial statement or other written or oral
statement referred to or provided for in, or received by the Agent under or in
connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency therefor of any of the other Credit Documents, or
for any failure of any Credit Party to perform its obligations hereunder or
thereunder. The Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower or any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the Credit
Parties to the Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Credit Parties.
10.4 Reliance on Communications. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any of the Credit Parties,
independent accountants and other experts selected by the Agent with reasonable
care). The Agent may deem and treat the Lenders as the owner of their respective
interests hereunder for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent in
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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 a Credit Party referring to the
Credit Document, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Agent or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party,
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 and the other
Credit Parties 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 the other Credit Parties. 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
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Lender with any credit or other information concerning the business, operations,
assets, property, financial or other conditions, prospects or creditworthiness
of the Borrower and the other Credit Parties which may come into the possession
of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7 Indemnification. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitments (or if the Commitments have expired or been terminated,
in accordance with the respective principal amounts of outstanding Loans and
Participation Interests of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the final payment of all of
the obligations of the Borrower hereunder and under the other Credit Documents)
be imposed on, incurred by or asserted against the Agent in its capacity as such
in any way relating to or arising out of this Credit Agreement or the other
Credit Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent. If any indemnity furnished to the Agent for any purpose
shall, in the opinion of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
10.8 Agent in its Individual Capacity. The Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Credit Party as though the Agent were not Agent hereunder. With respect
to the Loans made by and all obligations of the Borrower hereunder and under the
other Credit Documents owing to it, the Agent shall have the same rights and
powers under this Credit Agreement as any Lender and may exercise the same as
though they were not Agent, and the terms "Lender" and "Lenders" shall include
the Agent in its individual capacity.
10.9 Successor Agent. The Agent may, at any time, resign upon 20 days'
written notice to the Lenders and the Borrower, and be removed with or without
cause by the Required Lenders upon 30 days' written notice to the Agent. Upon
any such resignation or removal, the Required Lenders shall have the right, with
the prior consent of the Borrower, to appoint a successor Agent. If no
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successor Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the notice of
resignation or notice of removal, as appropriate, then the retiring Agent, with
the prior consent of the Borrower, shall select a successor Agent provided such
successor is a Lender hereunder or a commercial bank organized under the laws of
the United States of America or of any State thereof and has a combined capital
and surplus of at least $400,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations as Agent, as appropriate, under this Credit Agreement and the other
Credit Documents and the provisions of this Section 10.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (i) when delivered, (ii) when transmitted via telecopy (or other
facsimile device) to the number set out below, (iii) the day following the day
on which the same has been delivered prepaid to a reputable national overnight
air courier service, or (iv) the third Business Day following the day on which
the same is sent by certified or registered mail, postage prepaid, in each case
to the respective parties at the address, in the case of the Borrower,
Guarantors and the Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 2.1(a), or at such other address as such party may specify by
written notice to the other parties hereto:
if to the Borrower or the Guarantors:
Xxxx Manufacturing Co.
One Commerce Square
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxxx X. Xxxxxxxx
Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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if to the Agent:
NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
NationsBank, N.A.
NationsBank Corporate Center, 8th Floor
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: M. Xxxxxxx Xxxxxx
Senior Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 Right of Set-Off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind (all of which rights being hereby expressly
waived), to set-off and to appropriate and apply any and all deposits (general
or special) and any other indebtedness at any time held or owing by such Lender
(including, without limitation branches, agencies or Affiliates of such Lender
wherever located) to or for the credit or the account of any Credit Party
against obligations and liabilities of such Credit Party 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 of such Lender to such Credit
Party, 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. Each of the Credit Parties hereby agrees that any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 11.3(c) or Section 3.13 may exercise all rights of set-off with respect
to its participation interest as fully as if such Person were a Lender
hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that none of the Credit
Parties may assign and transfer any of its interests without prior
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written consent of the Lenders and the Borrower; provided
further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be
limited as set forth in this Section 11.3, provided however that
nothing herein shall prevent or prohibit any Lender from (i) pledging
its Loans hereunder to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank, or (ii) granting
assignments or participation in such Lender's Loans and/or Commitments
hereunder to its parent company and/or to any affiliate of such Lender
which is at least 50% owned by such Lender or its parent company.
(b) Assignments. Each Lender may assign all or a portion of
its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Schedule 11.3(b) to one or more
Eligible Assignees, provided that any such assignment shall be in a
minimum aggregate amount of $5,000,000 of the Commitments and in
integral multiples of $1,000,000 above such amount, that each such
assignment shall be of a constant not varying, percentage of all of the
assigning Lender's rights and obligations under this Credit Agreement.
Any assignment hereunder shall be effective upon delivery to the Agent
of written notice of the assignment together with a transfer fee of
$3,500 payable to the Agent for its own account. The assigning Lender
will give prompt notice to the Agent and the Borrower of any such
assignment. Upon the effectiveness of any such assignment (and after
notice to the Borrower as provided herein), the assignee shall become a
"Lender" for all purposes of this Credit Agreement and the other Credit
Documents and, to the extent of such assignment, the assigning Lender
shall be relieved of its obligations hereunder to the extent of the
Loans and Commitment components being assigned. Along such lines the
Borrower agrees that upon notice of any such assignment and surrender
of the appropriate Note or Notes, it will promptly provide to the
assigning Lender and to the assignee separate promissory notes in the
amount of their respective interests substantially in the form of the
original Note (but with notation thereon that it is given in
substitution for and replacement of the original Note or any
replacement notes thereof). By executing and delivering an assignment
agreement in accordance with this Section 11.3(b), the assigning Lender
thereunder and the assignee thereunder shall be deemed to confirm to
and agree with each other and the other parties hereto as follows: (i)
such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any
adverse claim; (ii) except as set forth in clause (i) above, such
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assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or the performance or
observance by any Credit Party of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such
assignee represents and warrants that it is legally authorized to enter
into such assignment agreement; (iv) such assignee confirms that it has
received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement and the other Credit
Documents; (vi) such assignee appoints and authorizes the Agent to take
such action on its behalf and to exercise such powers under this Credit
Agreement or any other Credit Document as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which
by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or
assign participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall
remain a "Lender" for all purposes under this Credit Agreement (such
selling Lender's obligations under the Credit Documents remaining
unchanged) and the participant shall not constitute a Lender hereunder,
(ii) no such participant shall have, or be granted, rights to approve
any amendment or waiver relating to this Credit Agreement or the other
Credit Documents except to the extent any such amendment or waiver
would (A) reduce the principal of or rate of interest on or Fees in
respect of any Loans in which the participant is participating, (B)
postpone the date fixed for any payment of principal (including
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extension of the Termination Date or the date of any mandatory
prepayment), interest or Fees in which the participant is
participating, or (C) release any Guarantor from its guaranty
obligations hereunder (except as expressly provided in the Credit
Documents), (iii) sub- participations by the participant (except to an
affiliate, parent company or affiliate of a parent company of the
participant) shall be prohibited and (iv) any such participations shall
be in a minimum aggregate amount of $5,000,000 of the Commitments and
in integral multiples of $1,000,000 in excess thereof. In the case of
any such participation, the participant shall not have any rights under
this Credit Agreement or the other Credit Documents (the participant's
rights against the selling Lender in respect of such participation to
be those set forth in the participation agreement with such Lender
creating such participation) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation, provided, however, that such participant shall be
entitled to receive additional amounts under Sections 3.6, 3.9, 3.10
and 3.11 on the same basis as if it were a Lender, except that all
claims and petitions for payment and all payments made pursuant to such
sections shall be made through such selling Lender and except that a
participant shall not be entitled to receive pursuant to such
provisions an amount larger than its share of the amount of which the
selling Lender would have been entitled.
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 any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Borrower or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 Payment of Expenses, etc. The Borrower agrees to: (i) pay all
reasonable out-of-pocket costs and expenses 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, special counsel to the Agent) and any
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amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by the
Credit Parties under this Credit Agreement and 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, 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 (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of gross negligence or willful misconduct on the part
of the Person to be indemnified).
11.6 Amendments, Waivers and Consents. Neither this Credit Agreement
nor any other Credit Document nor any of the terms hereof or thereof may be
amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing entered into by, or
approved in writing by, the Required Lenders, provided that no such amendment,
change, waiver, discharge or termination shall, without the consent of each
Lender, (i) extend the scheduled maturities (including the final maturity and
any mandatory prepayments) of any Loan, or any portion thereof, or 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 or reduce the principal amount thereof, or increase
the Commitments of the Lenders over the amount thereof in effect (it being
understood and agreed that a waiver of any Default or Event of Default or of a
mandatory reduction in the total commitments shall not constitute a change in
the terms of any Commitment of any Lender), (ii) release any Guarantor from its
guaranty obligations hereunder (except as expressly provided in the Credit
Documents), (iii) amend, modify or waive any provision of this Section or
Section 3.6, 3.10, 3.11, 3.12, 3.13, 5.1, 5.2, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(iv) reduce any percentage specified in, or otherwise modify, the definition of
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Required Lenders or (v) consent to the assignment or transfer by the Borrower
(or Guarantor) of any of its rights and obligations under (or in respect of)
this Credit Agreement. No provision of Section 2.2 may be amended without the
consent of the Issuing Lender, and no provision of Section 9 may be amended
without the consent of the Agent.
11.7 Counterparts. This Credit Agreement may be executed in any number
of counterparts, each of which where 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 of Indemnification. All indemnities set forth herein,
including, without limitation, in Section 2.2(h), 3.9, 3.11, 10.7 or 11.5 shall
survive the execution and delivery of this Credit Agreement, and the making of
the Loans, the issuance of the Letters of Credit, the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document may
be brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the
jurisdiction of such courts. Each of the Credit Parties further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to
it at the address set out notices pursuant to Section 11.1, such
service to become effective 30 days after such mailing. Nothing herein
shall affect the right of the Agent to serve process in any other
manner permitted by law or to commence legal proceedings or to
otherwise proceed against any Credit Party in any other jurisdiction.
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(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) EACH OF THE AGENTS, EACH OF THE LENDERS AND EACH OF THE
CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Severability. If any provision of any of the Credit Documents is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
11.12 Entirety. This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
11.13 Survival of Representations and Warranties. All representations
and warranties made by the Credit Parties herein shall survive delivery of the
Notes and the making of the Loans and the issuance of the Letters of Credit
hereunder.
11.14 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, the Guarantors 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 Guarantors, 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 and until all of the Commitments
hereunder shall have expired or been terminated.
11.15. Confidentiality. The Agent and the Lenders agree to keep
confidential (and to cause their respective affiliates, officers, directors,
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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 who have a need to know such Information in connection with
their work on 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 any of its Subsidiaries 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 11.15; provided, however, that disclosures of any Information shall
not be permitted pursuant to this clause (iv) prior to December 22, 1995; or (v)
to the extent that the Borrower shall have consented in writing to such
disclosure. Nothing set forth in this Section 11.15 shall obligate the Agent or
any Lender to return any materials furnished by the Borrower.
11.16 Source of Funds. Each of the Lenders hereby represents and
warrants to the Borrower that at least one of the following statements is an
accurate representation as to the source of funds to be used by such Lender in
connection with the financing hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any
employee benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such
Lender, such Lender has disclosed to the Borrower the name of
each employee benefit plan whose assets in such account exceed
10% of the total assets of such account as of the date of such
purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employee or
employee organization are deemed to be a single plan); or
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(c) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to
the Borrower.
As used in this Section 11.16, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
[Signature Page to Follow]
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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:
XXXX MANUFACTURING CO.
By____________________________
Title_________________________
GUARANTORS:
XXXXX CUSTOM FURNITURE, INC.
By____________________________
Title_________________________
XXXX DATA PRODUCTS, INC.
By____________________________
Title_________________________
XXXX HOLDINGS, INC.
By____________________________
Title_________________________
XXXX X-ACTO, INC.
By____________________________
Title_________________________
SEAL PRODUCTS, INC.
By____________________________
Title_________________________
S-1
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By_____________________________
Title__________________________
S-2
Schedule 1.1A
INVESTMENTS
1
Schedule 1.1B
LIENS
1
Schedule 1.1C
SCHEDULE 13E-4
1
Schedule 2.1(a)
LENDERS
1
Schedule 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N.A.,
as Agent for the Lenders
000 X. Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Xxxx Manufacturing Co. (the "Borrower") refers to the
Credit Agreement dated as of December 19, 1995 (as it may be amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the other Credit Parties party thereto, the Lenders party thereto and
NationsBank, N.A., as Agent.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
[The undersigned hereby gives you notice that it requests a Revolving
Loan advance in accordance with the provisions of Section 2.1 of the Credit
Agreement and in connection therewith sets forth below the terms on which such
Loan advance is requested to be made:
(A) Date of Borrowing
(which is a Business Day) _______________________
(B) Principal Amount of
Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the
last day thereof _______________________
The delivery of this Notice of Borrowing shall constitute a
representation and warranty by the Borrower of the correctness of the matters
specified in subsections (ii), (iii), (iv), (v) and (vi) of Sections 5.2.]
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[The undersigned hereby gives you notice that it requests an advance of
the Term Loan in accordance with the provisions of Section 2.3 of the Credit
Agreement and in connection therewith sets forth below the terms on which such
Loan advance is requested to be made:
(A) Date of Borrowing
(which is a Business Day) _______________________
(B) Principal Amount of
Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the
last day thereof _______________________
The delivery of this Notice of Borrowing shall constitute a
representation and warranty by the Borrower of the correctness of the matters
specified in subsections (ii), (iii), (iv), (v) and (vi) of Sections 5.2.]
Very truly yours,
XXXX MANUFACTURING CO.
By ___________________________
Title:
1
Schedule 2.1(e)
FORM OF REVOLVING NOTE
$_________________ December 19, 1995
FOR VALUE RECEIVED, XXXX MANUFACTURING CO., a Pennsylvania
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N.A., as Agent (the "Agent"), at 000 X. Xxxxx Xxxxxx,
Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such
other place or places as the holder hereof may designate), at the times set
forth in the Credit Agreement dated as of the date hereof among the Borrower,
the Lenders and the Agent (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"; all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Credit Agreement), but
in no event later than the Termination Date, in Dollars and in immediately
available funds, the principal amount of ________________________DOLLARS
($____________) or, if less than such principal amount, the aggregate unpaid
principal amount of all Revolving Loans made by the Lender to the Borrower
pursuant to the Credit Agreement, and to pay interest from the date hereof on
the unpaid principal amount hereof, in like money, at said office, on the dates
and at the rates selected in accordance with Section 2.1(d) of the Credit
Agreement.
Upon the occurrence and during the continuance of an Event of Default
the balance outstanding hereunder shall bear interest as provided in Section 3.1
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this 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 attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
1
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
XXXX MANUFACTURING CO.
By____________________________
Title_________________________
2
SCHEDULE A TO THE
REVOLVING NOTE
OF _______________
DATED DECEMBER 19, 1995
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
---- ---- -------- --------- -------- -------- --------
3
Schedule 2.3(f)
FORM OF TERM NOTE
$_________________ December 19, 1995
FOR VALUE RECEIVED, XXXX MANUFACTURING CO., a Pennsylvania
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N.A., as Agent (the "Agent"), at 000 X. Xxxxx Xxxxxx,
Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such
other place or places as the holder hereof may designate), at the times set
forth in the Credit Agreement dated as of the date hereof among the Borrower,
the Lenders and the Agent (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"; all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Credit Agreement), but
in no event later than the Termination Date, in Dollars and in immediately
available funds, the principal amount of ________________________DOLLARS
($____________), or, if less than such principal amount, the aggregate unpaid
principal amount of all Term Loan advances made by the Lender to the Borrower
pursuant to the Credit Agreement, and to pay interest from the date hereof on
the unpaid principal amount hereof, in like money, at said office, on the dates
and at the rates selected in accordance with Section 2.3(e) of the Credit
Agreement.
Upon the occurrence and during the continuance of an Event of Default
the balance outstanding hereunder shall bear interest as provided in Section 3.1
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this 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 attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
1
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
XXXX MANUFACTURING CO.
By____________________________
Title_________________________
2
SCHEDULE A TO THE
TERM NOTE
OF _______________
DATED DECEMBER 19, 1995
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
---- ---- -------- --------- -------- -------- --------
3
Schedule 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N.A.,
as Agent for the Lenders
000 X. Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Xxxx Manufacturing Co. (the "Borrower"), refers to the
Credit Agreement dated as of December 19, 1995 (as amended, modified, extended
or restated from time to time, the "Credit Agreement"), among the Borrower, the
Lenders and NationsBank, N.A., as Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The Borrower hereby gives notice pursuant to Section 3.2 of
the Credit Agreement that it requests an extension or conversion of a Loan
outstanding under the Credit Agreement, and in connection herewith sets forth
below the terms on which such extension or conversion is requested to be made:
(A) Type of Loan ______________________
(A) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(B) Principal Amount of
Extension or Conversion _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the
last day thereof _______________________
The delivery of this Notice of Extension/Conversion shall constitute a
representation and warranty by the Borrower of the correctness of the matters
specified in subsections (ii), (iii), (iv), (v) and (vi) of Sections 5.2.
Very truly yours,
XXXX MANUFACTURING CO.
By:__________________________________
Title:_______________________________
1
Schedule 5.1(f)
FORM OF LEGAL OPINION
1
Schedule 5.1(g)
FORM OF LOCAL COUNSEL OPINION
1
Schedule 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
1
Schedule 6.9
INTELLECTUAL PROPERTY
1
Schedule 6.12
ERISA DISCLOSURES
1
Schedule 6.14
SUBSIDIARIES
1
Schedule 6.16
ENVIRONMENTAL DISCLOSURES
1
Schedule 7.1(c)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ____________________, Chief Financial Officer, of Xxxx Manufacturing
Co. (the "Borrower") hereby certify that, to the best of my knowledge and
belief, with respect to that certain Credit Agreement dated as of December 19,
1995 (as 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 other Credit Parties party thereto,
the Lenders party thereto and NationsBank, N.A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, subject to
changes resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar
certification, or, if none, the Closing Date) no Default
or Event of Default has occurred under the Credit
Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by the
Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
XXXX MANUFACTURING CO.
--------------------------------
Title:
1
Attachment to Officer's Certificate
Computation of Financial Covenants
1
Schedule 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,
19__, is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N.A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of December 19, 1995, by
and among XXXX MANUFACTURING CO., a Pennsylvania corporation (the "Borrower"),
the other Credit Parties party thereto, the Lenders party thereto and
NationsBank, N.A., as Agent. All of the defined terms in the Credit Agreement
are incorporated herein by reference.
The Borrower is required by, or has otherwise elected pursuant to,
Section 7.12 of the Credit Agreement to cause the Subsidiary to become a
"Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to 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 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 (i) all of the
representations and warranties set forth in Section 6 of the Credit Agreement as
they relate to such Subsidiary, (ii) all of the affirmative and negative
covenants set forth in Sections 7 and 8 of the Credit Agreement and (iii) all of
the undertakings and waivers set forth in Section 3 of the Credit Agreement
(subject to the limitations set forth therein). Without limiting the generality
of the foregoing terms of this paragraph 1, the Subsidiary hereby (i) subject to
the limitation set forth in Section 4.1 of the Credit Agreement, jointly and
severally together with the other Guarantors, guarantees to each Lender and the
Agent, as provided in Section 4 of the Credit Agreement, the prompt payment and
performance of the Borrower's 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 (ii) agrees that if any of the Borrower's
Obligations are not paid or performed in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise), the
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
Borrower's Obligations, the same will be promptly paid in full when due (whether
1
at extended maturity, as a mandatory prepayment, by acceleration or otherwise)
in accordance with the terms of such extension or renewal.
2. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to
be duly executed by its authorized officers, 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.
[SUBSIDIARY]
By____________________________
Title_________________________
Acknowledged and accepted:
NATIONSBANK, N.A., as Agent
By______________________________
Title___________________________
2
Schedule 8.1
INDEBTEDNESS
1
Schedule 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of ________, 199_ is entered
into between ________________ ("Assignor") and ____________________
("Assignee").
Reference is made to the Credit Agreement dated as of December 19, 1995,
as amended and modified from time to time thereafter (the "Credit Agreement")
among Xxxx Manufacturing Co., the other Credit Parties party thereto, the
Lenders party thereto and NationsBank, N.A., as Agent. Terms defined in the
Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth below in the Commitments of the Assignor on the effective
date of the assignment designated below (the "Effective Date") and the Revolving
Loans owing to the Assignor which are outstanding on the Effective Date,
together with unpaid interest accrued on the assigned Loans to the Effective
Date and the amount, if any, set forth below of the Fees accrued to the
Effective Date for the account of the Assignor. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 11.3(b) of the Credit Agreement,
a copy of which has been received by each such party. From and after the
Effective Date (i) the Assignee, if it is not already a Lender under the Credit
Agreement, shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.
2. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of North
Carolina.
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3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Revolving Loan Commitment
Percentage Assigned (expressed
as a percentage set forth
to at least 8 decimals) %
(f) Revolving Loan Commitment
Percentage of Assignor after
Assignment (set forth to at
least 8 decimals) %
(g) Total Revolving Loans outstanding
as of Effective Date $_____________
(h) Principal Amount of Revolving
Loans assigned on Effective
Date (the amount set forth
in (g) multiplied by the
percentage set forth in (e)) $_____________
(i) Term Loan Commitment Percentage
Percentage Assigned (expressed
as a percentage set forth to
at least 8 decimals) %
(j) Term Loan Commitment
Percentage of Assignor after
Assignment (set forth to at
least 8 decimals) %
(k) Outstanding balance of
Assignor's portion of the
Term Loan as of as of
Effective Date $_____________
(l) Principal Amount of Assignor's
portion of Term Loan assigned
on Effective Date (the amount
set forth in (k) multiplied by
the percentage set forth in (i)) $_____________
2
The terms set forth above are hereby agreed to:
____________________, as Assignor
By:_____________________________________
Title:__________________________________
_____________________, as Assignee
By:_____________________________________
Title:__________________________________
CONSENTED TO:
NATIONSBANK, N.A., as Agent
By:____________________________________
Title:
XXXX MANUFACTURING CO.
By:____________________________________
Title:
3
