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EXHIBIT 10.9
EXECUTION
__________________________________________________________
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of May 14, 1998
by and among
CORPORATE STAFFING RESOURCES, INC.
as Borrower,
ING (U.S.) CAPITAL CORPORATION
and
CREDITANSTALT CORPORATE FINANCE, INC.,
as Co-Agents,
ING (U.S.) CAPITAL CORPORATION
CREDITANSTALT CORPORATE FINANCE, INC.,
SOCIETE GENERALE
as Lenders,
and
ING (U.S.) CAPITAL CORPORATION
as Administrative Agent
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TABLE OF CONTENTS
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Page
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1. DEFINITIONS, TERMS AND REFERENCES.............................. 1
1.1 Certain Definitions.................................... 1
1.2 Use of Defined Terms.................................. 27
1.3 Accounting Terms; Calculations........................ 27
1.4 Other Terms........................................... 28
1.5 Terminology........................................... 28
1.6 Exhibits.............................................. 28
1.7 Principles of Restatement............................. 28
1.8 Certain Transitional Matters.......................... 28
2. THE LOANS AND LETTERS OF CREDIT............................... 29
2.1 Loans................................................. 29
2.2 Borrowing Procedures.................................. 29
2.3 Loan Account; Statements of Account................... 30
2.4 Use of Proceeds....................................... 31
2.5 Several Obligations of the Lenders;
Remedies Independent.................................. 31
2.6 Letters of Credit..................................... 31
2.7 Term; Termination..................................... 36
2.8 Payments.............................................. 36
2.9 Pro Rata Treatment.................................... 37
2.10 Sharing of Payments, Etc.............................. 38
2.11 Prepayment; Commitment Reduction and Termination...... 39
2.12 Certain Notices; Minimum Amounts...................... 40
2.13 Security and Guarantees............................... 41
3. FEES AND INTEREST............................................. 41
3.1 Interest.............................................. 41
3.2 Interest Period....................................... 42
3.3 Limitations on Interest Periods....................... 43
3.4 Conversions and Continuations......................... 43
3.5 Commitment Fee........................................ 43
3.6 Letter of Credit Fees................................. 43
3.7 Illegality............................................ 44
3.8 Inability to Determine Eurodollar Rate................ 44
3.9 Increased Costs and Reduced Return.................... 44
3.10 Breakage Costs, Etc................................... 45
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3.11 Notice of Amounts Payable to the Lender............... 46
3.12 Interest Savings Clause............................... 46
4. REPRESENTATIONS AND WARRANTIES................................ 47
4.1 Corporate Existence and Qualification................. 47
4.2 Corporate Authority; Valid and Binding Effect......... 47
4.3 No Conflict........................................... 47
4.4 Governmental Action................................... 48
4.5 No Litigation......................................... 48
4.6 Solvency.............................................. 48
4.7 Taxes................................................. 48
4.8 Financial Information................................. 48
4.9 Title to Assets....................................... 49
4.10 Violations of Law..................................... 49
4.11 ERISA................................................. 49
4.12 Environmental Laws.................................... 50
4.13 Margin Stock.......................................... 51
4.14 No Default............................................ 51
4.15 Chief Executive Office; Collateral Locations.......... 51
4.16 Corporate and Trade or Fictitious Names............... 52
4.17 Adequacy of Intangible Assets......................... 52
4.18 Investment Property................................... 52
4.19 Indebtedness.......................................... 52
4.20 Existing Liens........................................ 52
4.21 Broker's or Finder's Fees............................. 53
4.22 Regulatory Matters.................................... 53
4.23 Disclosure............................................ 53
4.24 Employee Matters...................................... 53
4.25 Withholding and Other Taxes........................... 53
4.26 Deposit Accounts...................................... 54
4.27 Material Contracts.................................... 54
5. AFFIRMATIVE COVENANTS........................................... 54
5.1 Records Respecting Collateral; Lockbox or
Blocked Account Arrangements.......................... 54
5.2 Reporting Requirements................................ 54
5.3 Tax Returns........................................... 57
5.4 Compliance With Laws.................................. 57
5.5 Environmental Laws.................................... 57
5.6 ERISA................................................. 57
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5.7 Books and Records..................................... 58
5.8 Notifications to the Administrative Agent,
the Co-Agents and the Lenders......................... 58
5.9 Insurance............................................. 59
5.10 Maintenance of Intellectual Property.................. 60
5.11 Preservation of Corporate Existence................... 60
5.12 Additional Documents.................................. 60
5.13 Inspection Rights..................................... 60
5.14 Additional Collateral and Guarantees.................. 60
5.15 Interest Hedge Agreements............................. 61
6. NEGATIVE COVENANTS............................................ 61
6.1 Liens................................................. 61
6.2 Indebtedness and Earn-Outs............................ 61
6.3 Asset Sales........................................... 62
6.4 Guaranties............................................ 62
6.5 Investments and Acquisitions.......................... 62
6.6 Prohibition of Fundamental Changes.................... 63
6.7 Fiscal Year........................................... 63
6.8 ERISA................................................. 63
6.9 Relocations; Use of Name.............................. 64
6.10 Arm's-Length Transactions............................. 64
6.11 Hostile Tender Offers................................. 65
6.12 Pure Holding Company.................................. 65
6.13 Issuance of Subordinated Obligations and Earn-Outs.... 65
6.14 Earn-Outs............................................. 65
7. FINANCIAL COVENANTS........................................... 66
7.1 Senior Funded Debt to EBITDA.......................... 66
7.2 Total Funded Debt to EBITDA........................... 66
7.3 Interest Coverage Ratio............................... 67
7.4 Dividends and Management Fees......................... 67
7.5 Limitation on Voluntary Payments
and Modifications of Indebtedness..................... 67
8. EVENTS OF DEFAULT............................................. 68
8.1 Obligations........................................... 68
8.2 Misrepresentations.................................... 68
8.3 Certain Covenants..................................... 68
8.4 Other Covenants....................................... 68
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8.5 Other Debts........................................... 68
8.6 Tax Lien.............................................. 69
8.7 ERISA................................................. 69
8.8 Voluntary Bankruptcy.................................. 69
8.9 Involuntary Bankruptcy................................ 70
8.10 Suspension of Business................................ 70
8.11 Judgments............................................. 70
8.12 Failure of Security................................... 70
8.13 Guaranty.............................................. 70
8.14 Management............................................ 71
8.15 Change of Control..................................... 71
9. REMEDIES........................................................ 71
9.1 Default Rate.......................................... 71
9.2 Termination; Acceleration of the Obligations.......... 72
9.3 Set-Off............................................... 72
9.4 Rights and Remedies of a Secured Party................ 72
9.5 Take Possession of Collateral......................... 72
9.6 Sale of Collateral.................................... 72
9.7 Judicial Proceedings.................................. 73
9.8 Actions in Respect of the Letters of Credit
Upon Default.......................................... 73
9.9 Notice................................................ 74
9.10 Appointment of the Administrative Agent as
Borrower's Lawful Attorney............................ 74
10. CONDITIONS PRECEDENT............................................ 75
10.1 Conditions Precedent.................................. 75
10.2 All Loans and Letters of Credit....................... 77
11. THE AGENT....................................................... 78
11.1 Appointment, Powers and Immunities.................... 78
11.2 Reliance by Administrative Agent...................... 79
11.3 Defaults.............................................. 81
11.4 Rights as a Lender.................................... 81
11.5 Indemnification....................................... 81
11.6 Non-Reliance on Administrative Agent
and the other Lenders................................. 82
11.7 Failure to Act........................................ 82
11.8 Resignation or Removal of Administrative
Agent; Co- Administrative Agent....................... 82
11.9 Collateral Matters.................................... 83
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11.10 Borrower And Its Subsidiaries Not Beneficiaries...... 86
12. MISCELLANEOUS................................................. 86
12.1 Waiver............................................... 86
12.2 Survival............................................. 87
12.3 Assignments; Successors and Assigns.................. 87
12.4 Counterparts......................................... 90
12.5 Expense Reimbursement................................ 90
12.6 Severability......................................... 91
12.7 Notices.............................................. 91
12.8 Entire Agreement; Amendment.......................... 91
12.9 Time of the Essence.................................. 92
12.10 Interpretation....................................... 92
12.11 Lenders Not Joint Venturers.......................... 92
12.12 Cure of Defaults by Lenders.......................... 93
12.13 Indemnity............................................ 93
12.14 Consequential Damages................................ 94
12.15 Attorney-in-Fact..................................... 94
12.16 Termination Statements............................... 94
12.17 Confidentiality...................................... 95
12.18 Termination of Lenders............................... 95
12.19 Governing Law; Jurisdiction.......................... 96
12.20 Waiver of Jury Trial................................. 97
Schedule 1.1 - Existing Creditanstalt Letter of Credit
Schedule 1.2 - Historical EBITDA
Schedule 1.3 - Merger Distributions
Schedule 4.1 - Foreign Qualifications
Schedule 4.5 - Litigation and Related Proceedings
Schedule 4.7 - Taxes
Schedule 4.8 - Projections
Schedule 4.11 - ERISA Matters
Schedule 4.15 - Executive Offices; Business and Collateral
Locations
Schedule 4.16 - Corporate and Trade or Fictitious Names
Schedule 4.17 - Intangible Assets
Schedule 4.19 - Investments
Schedule 4.20 - Existing Liens
Schedule 4.21 - Existing Indebtedness
Schedule 4.26 - Deposit Accounts
Schedule 4.27 - Material Agreements
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Exhibit A - Form of Promissory Note
Exhibit B - Form of Request for Letter of Credit
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Permitted Acquisition Compliance Certificate
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Subordination Provisions
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AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (the "Agreement") is made and
entered into as of May 14, 1998, by and among CORPORATE STAFFING RESOURCES,
INC., a Delaware corporation formerly known as THE MEGA FORCE STAFFING
COMPANIES, INC. (the "Borrower"), ING (U.S.) CAPITAL CORPORATION, a
Delaware corporation, and CREDITANSTALT CORPORATE FINANCE, INC., a Delaware
corporation, as Co-Agents (in such capacity, together with their respective
successors and assigns, the "Co-Agents") and the LENDERS REFERRED TO HEREIN
(each a "Lender" and collectively, the "Lenders") and ING (U.S.) CAPITAL
CORPORATION, as Administrative Agent (in such capacity as Administrative
Agent for the benefit of the Lenders, together with its successors and
assigns, the "Administrative Agent").
WITNESSETH:
A. Pursuant to the Existing Loan Agreement referred to
herein, ING and Creditanstalt have previously provided a
$50,000,000 revolving credit facility to Borrower.
B. The parties desire to admit Societe Generale as an
additional Lender, with a lending commitment of $25,000,000 (a
Commitment Percentage of 33 1/3%), and to amend and restate the
Existing Loan Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt, adequacy and
sufficiency of which are acknowledged by the parties hereto, Borrower, the
Lenders, the Co-Agents and the Administrative Agent hereby agree to amend
and restate the Existing Loan Agreement in its entirety as set forth
herein:
1. DEFINITIONS, TERMS AND REFERENCES
1.1 CERTAIN DEFINITIONS. When used herein, the following terms shall
have the following respective meanings:
"Accounts" means any "account", as such term is defined in Section
9-106 of the UCC, now owned or hereafter acquired by Borrower or any of its
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Subsidiaries and, in any event, shall include all of the accounts, contract
rights, book debts and other forms of obligations (other than forms of
obligations evidenced by Chattel Paper, Documents or Instruments) of
Borrower or any of its Subsidiaries, whether now existing or hereafter
acquired or arising or in which Borrower or any of its Subsidiaries now
have or hereafter acquires any rights, including, without limitation, all
present and future rights to payments for goods, merchandise or Inventory
sold or leased or for services rendered, whether or not represented by
invoices or other billing, and whether or not earned by performance;
proceeds of any letter of credit on which Borrower or any of its
Subsidiaries is a beneficiary and all forms of obligations whatsoever owing
to Borrower or any of its Subsidiaries, together with all instruments and
documents of title representing any of the foregoing, all rights in any
goods, merchandise or Inventory which any of the foregoing may represent,
all rights in any returned or repossessed goods, merchandise or Inventory,
and all rights, security and guaranties with respect to each of the
foregoing, including, without limitation, any rights of stoppage in
transit.
"Account Debtor" means any "account debtor", as such term is
defined in Section 9-105(l)(a) of the UCC and, in any event, shall include
any Person who is or may become obligated to Borrower or any of its
Subsidiaries on any Account.
"Accrued Earn-Outs" means, as of each date of determination, the
amount of Borrower's and its Subsidiaries' accrued and unpaid obligations
with respect to Earn-Outs as of that date (whether or not such obligations
are then payable). As of each date of determination, Accrued Earn-Outs
shall be calculated by means of application of the related earn-out formula
(as specified in the purchase agreement for the Acquired Business) to
Borrower's and its Subsidiaries' EBITDA, income or other relevant financial
measure for the portion of the relevant period then ended.
"Acquired Business" means any Person, or any business, asset or
division of a Person, which is the subject of an Acquisition, and includes
any Subsidiaries of a Person which are concurrently acquired, in each case
effective only upon the consummation of such Acquisition.
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date hereof, by which (i) Borrower or
any of its Subsidiaries acquires, directly or indirectly, an ownership
interest in a Person or the business or assets of a Person, or a division
of a Person, whether through Investment, purchase of assets, merger,
capital contribution or otherwise, or (ii) any Person that was not
theretofore a Subsidiary of Borrower becomes a Subsidiary of Borrower.
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"Adjusted Company EBITDA" means, for any period, (a) the EBITDA
of Borrower and its consolidated Subsidiaries, minus (b) that portion of
such EBITDA associated with any Sold Businesses, plus (c) without
duplication, the Adjusted EBITDA of any Acquired Business acquired during
that period by Borrower and its Subsidiaries for that portion of such
period during which the Acquired Business was not owned by Borrower and its
Subsidiaries, plus (d) without duplication of the foregoing or of any
adjustments made pursuant to clause (b) of the definition of Adjusted
EBITDA, any and all charges during the 90 day period following the
acquisition of an Acquired Business that can be eliminated during future
periods through cost savings (by way of elimination of excess owners'
compensation, duplicative overhead, excess compensation, and the like) to
the extent that the same were taken into account in determining EBITDA of
Borrower and its Subsidiaries, to the extent demonstrated by Borrower to
the reasonable satisfaction of the Majority Lenders.
"Adjusted EBITDA" means, with respect to any Acquired Business
for any period, (a) EBITDA of the Acquired Business for that period (or, in
the case of an Acquired Business which consists of the assets or division
of a Person, the EBITDA reasonably associated therewith), plus (b) any and
all charges during such period for costs that can be eliminated during
future periods through cost savings (by way of elimination of excess
owners' compensation, duplicative overhead, excess compensation, and the
like) which are immediately available to Borrower or any of its
Subsidiaries in relation to the Acquired Business or which can be achieved
by them in the 90 day period following the acquisition of such Acquired
Business by Borrower and its Subsidiaries and any historical non-recurring
charges in each case to the extent that the same were taken into account in
determining the EBITDA of such Acquired Business, in each case demonstrated
by Borrower to the reasonable satisfaction of the Majority Lenders and
after reduction for minority interests.
"Administrative Agent" shall have the meaning given to such term
in the preamble of this Agreement.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, owns or controls, on an aggregate basis, including
all beneficial ownership and ownership or control as a trustee, guardian or
other fiduciary, at least ten percent of the outstanding shares of capital
stock having ordinary voting power to elect a majority of the board of
directors or other governing body (irrespective of whether, at the time,
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) of such
Person or at least ten percent of the partnership or other ownership
interest of such Person; or which
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controls, is controlled by or is under common control with such Person;
provided, however, that in no event shall Borrower or any of its
Subsidiaries be deemed or regarded to be Affiliates of the Administrative
Agent, the Co-Agents or any Lender. For the purposes of this definition,
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of management and policies, whether through
the ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Loan Agreement, as
amended, modified or supplemented from time to time.
"Applicable Law" means all provisions of statutes, rules,
regulations and orders of any Governmental Authority applicable to a
Person, and all orders and decrees of all courts and arbitrators in
proceedings or actions in which the Person in question is a party.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as may
be amended from time to time.
"Base Rate" means an interest rate per annum, fluctuating daily,
equal to the higher of (a) the arithmetic average of the rates publicly
announced by The Chase Manhattan Bank, Citibank and Xxxxxx Guaranty Trust
Company (or their respective successors) from time to time at their
respective principal offices in New York, New York, as their base, prime or
similar rate for domestic (United States) commercial loans in effect on
such day; and (b) the Federal Funds Rate in effect on such day plus
one-half of one percent. The Base Rate is not necessarily intended to be
the lowest rate of interest charged by such institutions in connection with
extensions of credit. Each change in the Base Rate shall result in a
corresponding change in the interest rate hereunder with respect to a Base
Rate Loan and such change shall be effective on the effective date of such
change in the Base Rate.
"Base Rate Loan" means a Loan bearing interest at a rate based on
the Base Rate.
"Base Rate Spread" means, during the Pricing Period immediately
following each Test Date, upon which the Senior Funded Debt to EBITDA Ratio
is (a) equal to or greater than 3.50:1.00, 1.25%, (ii) equal to or greater
than 3.00:1.00 and less than 3.50:1.00, 1.00%, (iii) equal to or greater
than 2.50:1.00 and less than 3.00:1.00, 0.75%, and (iv) less than 2.50 to
1.00, 0.50%.
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"Borrower" means Corporate Staffing Resources, Inc., its
successors and permitted assigns.
"Business Day" means a day on which banks are not required or
authorized to close in Greenwich, Connecticut and New York, New York and
upon which each of the Lenders is in fact open for business and, if such
day relates to a borrowing of, a payment or prepayment of principal or
interest on, a Continuation or Conversion of or into, or an Interest Period
for, a Eurodollar Loan or a notice by Borrower with respect to any such
borrowing, payment, prepayment, Continuation, Conversion or Interest
Period, which is also a day on which dealings by and between banks in U.S.
dollar deposits are carried out in the interbank Eurodollar market.
"Capital Expenditure" means any expenditure that is considered a
capital expenditure under GAAP, including any amount that is required to be
treated as an asset subject to a capital lease.
"Capital Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of
(or other agreement conveying the right to use) real and/or personal
property which obligations are required to be classified and accounted for
as a capital lease on a balance sheet of such Person under GAAP (including
Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board) and, for the purposes of this Agreement, the
amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP (including such Statement No. 13).
"Capital Stock" means, as to any Person, any and all shares,
interests, warrants, participations or other equivalents (however
designated) of corporate stock, partnership or membership interests, or
other equity securities of such Person.
"Cash Equivalents" means, when used in connection with any
Person, that Person's Investments in:
(a) Government securities due within one year after the date of
the making of the Investment entitled to the full faith and
credit of the United States;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any
such State given on the date of such Investment a credit
rating of at least Aa by Xxxxx'x Investors Service, Inc. or
AA by Standard & Poor's
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Ratings Service, in each case due within one year after the
date of the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and
reverse repurchase agreements covering government securities
of the type described in clause (a) executed by, any Lender
or any other bank, savings and loan or savings bank doing
business in and organized under the laws of the United
States of America or any State thereof and having on the
date of such Investment combined capital, surplus and
undivided profits of at least $250,000,000, in each case due
within one year after the date of the making of the
Investment;
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and
reverse repurchase agreements covering government securities
of the type described in clause (a) executed by, any branch
or office located in the United States of America of a bank
organized under the laws of any jurisdiction outside the
United States of America having on the date of such
Investment combined capital, surplus and undivided profits
of at least $500,000,000, in each case due within one year
after the date of the making of the Investment; and
(e) readily marketable commercial paper of corporations doing
business in and incorporated under the laws of the United
States of America or any State thereof given on the date of
such Investment the highest credit rating by Xxxxx'x
Investors Service, Inc. and Standard & Poor's Ratings
Service, in each case due within 270 days after the date of
the making of the Investment.
"Chattel Paper" means any "chattel paper", as such term is
defined in Section 9-105(l)(b) of the UCC, now owned or hereafter acquired
by Borrower or any of its Subsidiaries.
"Closing Date" means December 3, 1997.
"Co-Agent(s)" shall have the meaning given to such term in the
preamble of this Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder from time to time.
"Collateral" means the property of Borrower and its Subsidiaries
in which the Administrative Agent has, or is to have, a Lien on or security
interest in pursuant to this Agreement or the Loan Documents, or any of
them, as security for payment of the Obligations.
"Commitment" means the aggregate obligation of the Lenders to
make Loans to and to incur Letter of Credit Obligations in favor of
Borrower, subject to the terms and conditions hereof, in an aggregate
principal amount not to exceed $75,000,000 at any one time outstanding.
"Commitment Fee" means that amount due and payable to the Lenders
by Borrower pursuant to and in the amount specified in Section 3.5 hereof.
"Commitment Percentage" means, as to each Lender, (a) initially,
the amount, expressed as a percentage set forth opposite the name of such
Lender on the signature pages hereto under the heading "Commitment
Percentage", and (b) hereafter, the percentage necessary to reflect any
assignments made by the Lenders pursuant to Section 12.3(c) hereof.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 3.4 hereof of a Eurodollar Loan as a
Eurodollar Loan from one Interest Period to the next Interest Period.
"Contracts" means all contracts, undertakings, or other
agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which Borrower or any of its Subsidiaries may now
or hereafter have any right, title or interest, including, without
limitation, with respect to an Account, any agreement relating to the terms
of payment or the terms of performance thereof.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 3.4 hereof of a Base Rate Loan into a
Eurodollar Loan or of a Eurodollar Loan into a Base Rate Loan.
"Copyrights" means all of the following now or hereafter acquired
by Borrower or any of its Subsidiaries: (a) all copyrights, registrations
and applications therefor, (b) all renewals and extensions thereof, (c) all
income, royalties, damages and payments now and hereafter due or payable or
both with respect thereto, including,
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without limitation, damages and payments for past or future infringements
or misappropriations thereof, (d) all rights to xxx for past, present and
future infringements or misappropriations thereof, and (e) all other rights
corresponding thereto throughout the world.
"Default" means the occurrence of any event or condition which,
after satisfaction of any requirement expressly set forth in Article 8 for
the giving of notice or the lapse of time, or both, would become an Event
of Default.
"Default Rate" means (a) with respect to any Loan or portion
thereof, an interest rate per annum equal to two percent (2%) above the
interest rate set forth for such Loan in Section 3.1(a)(i) or (ii) hereof
or (b) with respect to any portion of the Obligations other than Loans, two
percent (2%) above the rate set forth in Section 3.1(a)(ii) hereof.
"Documents" means any "documents", as such term is defined in
Section 9-105(l)(f) of the UCC, now owned or hereafter acquired by Borrower
or any of its Subsidiaries.
"Drop-Down Note Pledge and Security Agreements" means the
Drop-Down Note Pledge and Security Agreements dated as of the Closing Date
(and each thereafter executed pursuant to Section 5.12), as the same may be
amended, restated, supplemented or otherwise modified from time to time,
executed by each of the Guarantors in favor of Borrower, pursuant to which
the Guarantors have granted a Lien in substantially all of their personal
property to secure their respective Drop-Down Notes.
"Drop-Down Notes" means the $75,000,000 promissory note made by
each Subsidiary of Borrower on the date hereof in favor of Borrower,
endorsed in blank by Borrower, and pledged by Borrower to the
Administrative Agent, and any Drop Down Note hereafter executed by any
Subsidiary of Borrower in accordance with Section 5.12 substantially in the
form thereof, either as originally executed or as it may from time to time
be supplemented, modified, amended, restated or extended.
"Earn-Out" means any amount payable to the seller of an Acquired
Business following the Acquisition thereof which is contingent upon the
financial performance of the Acquired Business, including without
limitation by way of any sharing of the income or profits of Borrower or
any of its Subsidiaries or an Acquired Business or any similar "earn-out"
provision.
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"EBITDA" means, as to any Person and for any fiscal period, that
Person's (a) Net Income, plus (b) Interest Expense, plus (c) income taxes
payable or accrued by that Person, plus (d) depreciation and amortization
expense, plus (e) non-cash compensation paid to officers and employees,
plus (f) all other non-cash charges (and minus any non-cash gains), in each
case which are reasonably acceptable to or reasonably specified by the
Majority Lenders, in each case for that fiscal period and to the extent
included in determining Net Income for that fiscal period, all determined
in accordance with GAAP, minus (g) any Management Fees paid in cash during
that period not deducted from Net Income in the calculation thereof, and
plus (h) any Management Fees accrued during that period and deducted in the
calculation of Net Income, but not actually paid in cash, provided that, as
to Borrower and its Subsidiaries, to the extent any such fiscal period
includes any month prior to the Closing Date described on SCHEDULE 1.2,
EBITDA for such months shall be the amount set forth opposite such months
on such Schedule.
"Eligible Assignee" has the meaning set forth in Section 12.3.
"Environmental Laws" means all federal, state, local and foreign
laws relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of any
Hazardous Substance into the environment (including without limitation
ambient air, surface water, ground water or land), or otherwise relating to
the generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Hazardous Substances and any
and all regulations, codes, standards, plans, orders, decrees, writs,
judgments, injunctions, notices or demand letters issued, entered,
promulgated or approved thereunder.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and all rules and regulations from time
to time issued or promulgated thereunder.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) which, together with Borrower or any of its Subsidiaries is
treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code.
"Eurodollar Loan" means that portion of a Loan bearing interest
at a rate based on the Eurodollar Rate.
"Eurodollar Rate" means, for any Interest Period for any
Eurodollar Loan, a rate per annum (rounded upwards to the nearest 1/100th
of 1%) equal to the
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offered rate for deposits in U.S. dollars (in the same approximate amount
and having approximately the same maturity as the Eurodollar Loan to be
made) in the London interbank eurodollar market at approximately 11:00 a.m.
(London time), quoted by the British Bankers' Association and appearing on
the relevant Bloomberg quotation screen (or, if such a rate is not then
quoted by the British Bankers' Association, the similar rate quoted by
Reuters), two Business Days prior to the first day of such Interest Period.
"Eurodollar Rate Spread" means, during the Pricing Period
immediately following each Test Date, upon which the Senior Funded Debt to
EBITDA Ratio is (a) equal to or greater than 3.50:1.00, 3.25%, (ii) equal
to or greater than 3.00:1.00 and less than 3.50:1.00, 3.00%, (iii) equal to
or greater than 2.50:1.00 and less than 3.00:1.00, 2.75%, and (iv) less
than 2.50 to 1.00, 2.50%.
"Event of Default" means any of the events or conditions
described in Article 8 hereof.
"Existing Loan Agreement" means the Loan Agreement dated as of
December 3, 1997, among the parties hereto (other than Societe Generale) as
amended.
"Federal Funds Rate" means, for any day, the overnight federal
funds rate in New York City, New York, as published for such day (or, if
such day is not a New York Business Day, for the next preceding Business
Day) in the Federal Reserve Statistical Release H.15 (519) or any successor
publication, or if such rate is not so published for any day which is a New
York Business Day, the average of the quotations for such day on overnight
federal funds transactions in New York City received by the Administrative
Agent from three federal funds brokers of recognized standing selected by
the Administrative Agent.
"Fee Letter" means a fee letter dated as of the Closing Date,
executed by Borrower and the Co-Agents.
"Fiscal Quarter" means each fiscal quarter of Borrower and its
Subsidiaries consisting of a three calendar month period ending on the last
day of each March, June, September and December (or, if Borrower changes
its Fiscal Year to another twelve month period in accordance with Section
6.7, the constituent fiscal quarters thereof).
"Fiscal Year" means, subject to Section 6.7, the fiscal year of
Borrower and its Subsidiaries ending each December 31.
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"Funded Debt" means, as of any date of determination, the sum of
(a) all principal Indebtedness of Borrower and its Subsidiaries for
borrowed money (including debt securities issued by Borrower or any of its
Subsidiaries but not including obligations in respect of letters of credit)
on that date, plus (b) without duplication, the aggregate amount of all
Capital Lease Obligations of Borrower and its Subsidiaries on that date,
plus (c) letters of credit and other Guarantees issued by or for the
account of Borrower and its Subsidiaries with respect to any of the
foregoing which are the primary obligation of a Person other than Borrower
or any of its Subsidiaries.
"GAAP" means generally accepted accounting principles
consistently applied and maintained throughout the period indicated and
consistent with the prior financial practice of Borrower and its
Subsidiaries, as reflected in the financial information referred to in
Section 4.8 hereof.
"General Intangibles" means any "general intangibles," as such
term is defined in Section 9-106 of the UCC, now owned or hereafter
acquired by Borrower or any of its Subsidiaries, and, in any event shall
include all general intangibles of Borrower and its Subsidiaries, whether
now existing or acquired or arising or in which Borrower or any of its
Subsidiaries now has or hereafter acquires any rights, including, without
limitation, all choses in action, causes of action, corporate or other
business records, inventions, designs, Patents, patent applications,
service marks, Trademarks, trade names, Trade Secrets, proprietary or
confidential information, inventions (whether patented or patentable or
not) and technical information, procedures, designs, knowledge, know-how,
software, data bases, data, skill, expertise, experience, processors,
models, drawings, materials, records, goodwill, Copyrights, registrations,
Licenses, franchises, customer lists, agency and other contracts, tax
refund claims, computer programs, all claims under guaranties, Liens or
other security held by or granted to Borrower or any of its Subsidiaries to
secure payment of any of the Accounts by an Account Debtor, all rights to
indemnification, and all other intangible personal property of every kind
and nature (other than Accounts).
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government.
"Guarantee" means a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance
of, or otherwise to be or become contingently liable under or with respect
to, the Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the
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payment of dividends or other distributions upon the stock or equity
interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) property, products, materials, supplies or services
primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a correlative meaning.
"Guarantors" means, collectively, Corporate Staffing Resources of
Indiana, Inc., an Indiana corporation, Corporate Staffing Resources, LLC,
an Indiana limited liability company ("CSR LLC"), The Xxxxxxxx-Xxxxx
Company, Inc, a North Carolina corporation ("HRC"), Mega Force Staffing
Services, Inc., a North Carolina corporation ("MFSS") and Corporate
Staffing Resources of St. Louis, Inc., a Missouri corporation ("CSRSL"),
Intranational Computer Consultants, Inc., NPS of Atlanta, Inc., and each
other Person which hereafter executes a joinder to the Guarantees executed
in connection herewith by the Guarantors pursuant to Section 5.12.
"Hazardous Substances" means any pollutant, contaminant,
hazardous, toxic or dangerous waste, substance or material, or any other
substance or material regulated or controlled pursuant to any Environmental
Law, including, without limiting the generality of the foregoing, asbestos,
PCB's, petroleum products (including crude oil, natural gas, natural gas
liquids, liquefied natural gas or synthetic gas) or any other substance
defined as a "hazardous substance," "extremely hazardous waste,"
"restricted hazardous waste," "hazardous material," "hazardous chemical,"
"hazardous waste," "regulated substance," "toxic chemical," "toxic
substance" or other similar term in any Environmental Law.
"Indebtedness" means, as to any Person, (a) all indebtedness of
such Person for borrowed money, (b) that portion of the Capital Lease
Obligations of such Person which are properly recorded as a liability on a
balance sheet of that Person prepared in accordance with GAAP, (c) any
obligation of such Person that is evidenced by a promissory note or other
instrument representing an extension of credit to such Person, whether or
not for borrowed money, (d) any obligation of such Person for the deferred
purchase price of property or services (excluding trade or other accounts
payable and accrued expenses arising in the ordinary course of business),
including without limitation (in the case of Borrower and its Subsidiaries)
any Accrued Earn-Outs but excluding any Earn-Outs which are not Accrued
Earn-Outs, (e) any obligation of such Person that is secured by a Lien on
assets of such Person (other than Permitted
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Liens), whether or not that Person has assumed such obligation or whether
or not such obligation is non-recourse to the credit of such Person, but
only to the extent of the lesser of such obligation or the fair market
value of the assets so subject to the Lien, (f) obligations of such Person
arising under acceptance facilities or under facilities for the discount of
accounts receivable of such Person, (g) obligations of such Person under
letters of credit issued for the account of such Person, (h) any
obligations of such Person under Interest Hedge Agreements, (i) any Capital
Stock of such Person to the extent that the same is subject to mandatory
redemption prior to the Maturity Date, and (j) Guarantees issued by or for
the account of such Person with respect to any of the foregoing which are
the primary obligation of an unaffiliated third Person.
"Instruments" means any "instrument", as such term is defined in
Section 9-105(l)(i) of the UCC, now owned or hereafter acquired by Borrower
or any of its Subsidiaries, other than instruments that constitute, or are
a part of a group of writings that constitute, Chattel Paper.
"Interest Coverage Ratio" means, as of each date of
determination, the ratio of (a) Adjusted Company EBITDA for the twelve
month fiscal period ending on such date, to (b) Interest Expense for
Borrower and its consolidated Subsidiaries to the extent payable in cash
during the same period, in each case calculated in accordance with GAAP.
"Interest Expense" means, as to any Person and for any period,
the total interest expense, whether paid, accrued or capitalized (including
the interest component of Capital Lease Obligations), of such Person, net
of interest income of such Person, including, but not limited to, all
letter of credit fees and expenses, commitment fees, all amortization of
original issue discount, and the net amount payable under any Interest
Hedge Agreement between such Person and any other Person, computed in each
case on a consolidated basis for such Person and its consolidated
subsidiaries in accordance with GAAP, but in any event excluding the fees
and other expenses payable to the Lenders on the Closing Date.
"Interest Hedge Agreement" means, for any Person, an interest
rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific
contingencies.
"Interest Period" means, in connection with any Eurodollar Loan,
the period beginning on the date such Eurodollar Loan is made, Continued or
Converted and continuing for one (1), two (2), three (3) or six (6) months
as selected by Borrower
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in the applicable Notice of Borrowing. Notwithstanding the foregoing,
however, (a) any applicable Interest Period which would otherwise end on a
day which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in
which case such Interest Period shall end on the immediately preceding
Business Day; and (b) any applicable Interest Period which begins on a day
for which there is no numerically corresponding day in the calendar month
during which such Interest Period is to end shall (subject to clause (a)
above) end on the last day of such calendar month.
"Inventory" means all "inventory", as such term is defined in
Section 9-109(4) of the UCC, now owned or hereafter acquired by Borrower
and any of its Subsidiaries, and, in any event, shall include all of the
inventory of Borrower and each of its Subsidiaries, whether now existing or
acquired or arising or in which Borrower and any of its Subsidiaries now
has or hereafter acquires any rights, including, without limitation, any
and all goods, merchandise and other personal property, wheresoever located
and whether or not in transit, which is or may at any time be held for sale
or lease or to be furnished under any contract of service or held as raw
materials, work in process, finished goods or materials, and supplies of
any kind, nature or description used or consumed in the business of
Borrower and its Subsidiaries, including, without limitation, all such
property, the sale or other disposition of which has given rise to an
Account and which may have been returned to or repossessed or stopped in
transit by Borrower or any of its Subsidiaries.
"Investment" means, for any Person: (a) the acquisition (whether
for cash, property, services or securities or otherwise) of Capital Stock,
bonds, notes, debentures or other securities of any other Person or any
agreement to make any such acquisition (including, without limitation, any
"short sale" or any sale of any securities at a time when such securities
are now owned by the Person entering into such short sale), (b) any deposit
with, or advance, loan or other extension of credit to, such Person (other
than any such advance, loan or extension of credit representing the
purchase price of goods, intangibles or services sold or supplied in the
ordinary course of business) or Guarantee of, or other contingent
obligation with respect to, Indebtedness or other liability of such Person
and (without duplication) any amount committed to be advanced, lent or
extended to such Person, (c) any Acquisition other than the acquisition of
goods, intangibles or services purchased in the ordinary course of business
and accounted for as an expense in accordance with GAAP or as a Capital
Expenditure or (d) the entering into of any Interest Hedge Agreement. The
amount of any Investment shall be the amount actually invested (minus any
return of capital with respect to such Investment which has actually been
received in cash or Cash
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Equivalents or has been converted into cash or Cash Equivalents), without
adjustment for subsequent increases or decreases in the value of such
Investment.
"Investment Property" means all "investment property" as such
term is defined in Section 9-115 of the Uniform Commercial Code, of
Borrower and its Subsidiaries, whether now owned or existing or hereafter
acquired or arising, and, in any event, shall include all of the following:
(a) all securities owned by Borrower or any of its Subsidiaries, whether
certificated or uncertificated; (b) any share, participation or other
interest in a Person or in property or in an enterprise of a Person held
directly or indirectly by Borrower or any of its Subsidiaries which is, or
is of a type, dealt in or traded on financial markets, or which is
recognized in any area in which it is issued or dealt in as a medium for
investment; (c) all commodity futures contracts owned by Borrower or any of
its Subsidiaries, options on any commodity futures contract held by
Borrower or any of its Subsidiaries, all commodity options or other
contracts owned by Borrower or any of its Subsidiaries that are traded on,
or subject to the rules of, a board of trade that has been designated as a
contract market for such contracts pursuant to the federal commodities laws
or which are traded on one or more foreign commodity boards of trade,
exchanges, or markets and are carried on the books of registered futures
commodity merchant or on the books of a Person providing clearance or
settlement services for a board of trade that has been designated as a
contract market for such a contract pursuant to the federal commodities
laws; (d) any of the foregoing held, directly or indirectly, in the name of
any other Person to the extent such other Person has expressly agreed to
treat Borrower or any of its Subsidiaries as the Person entitled to
exercise the rights comprising the foregoing; and (e) all right, title and
interest of Borrower or any of its Subsidiaries in any account to which any
of the foregoing have been credited.
"Issuing Lender" means, as to each Letter of Credit issued
following the date hereof, ING (U.S.) Capital Corporation or a bank
designated by ING (U.S.) Capital Corporation. One of the "Existing
Creditanstalt Letters of Credit" described in the Existing Loan Agreement
(the form of which is attached hereto as Schedule 1.1, remains outstanding,
and Creditanstalt is the issuing lender with respect thereto.
"Lenders" means (a) each Lender listed on the signature pages
hereof as a "Lender," (b) each person that becomes a Lender under Section
12.3(c), and (c) their respective successors.
"Letter of Credit" means any documentary or standby letter of
credit issued at the request and for the account of Borrower or for which
the Lenders have incurred Letter of Credit Obligations under Section 2.6 of
this Agreement.
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"Letter of Credit Documents" means, collectively, such
reimbursement agreements and other instruments, documents or agreements as
shall be executed by Borrower with or in favor of the Administrative Agent
or the Issuing Lender.
"Letter of Credit Obligations" means, as of each date of
determination, the sum of the effective face amount of all outstanding
Letters of Credit and all unpaid reimbursement obligations for amounts
previously paid by the Issuing Lender under any Letter of Credit.
"License" means any Patent License, Trademark License or other
license as to which the Administrative Agent has been granted a security
interest under any of the Loan Documents.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether voluntarily incurred or arising by operation of law or
otherwise, affecting any property, including any agreement to grant any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and/or the filing of or
agreement to give any financing statement under the Uniform Commercial Code
or comparable law of any jurisdiction with respect to any property (other
than precautionary filings with respect to true leases not prohibited by
this Agreement).
"Loan Account" means account no. 800285523, maintained by
Borrower at Key Bank (Cleveland) ABA No. 041-0001-039, ref: Corporate
Resources, or any other account designated by Borrower and reasonably
acceptable to the Administrative Agent.
"Loan Documents" means this Agreement, the Notes, the Trademark
Collateral Assignment, the Letter of Credit Documents, the Pledge and
Security Agreements, the Drop Down Notes, the Drop Down Note Pledge and
Security Agreements, each Guarantee of the Obligations issued by any
Subsidiary of Borrower, each Subordination Agreement, each lockbox
agreement entered into pursuant to the terms hereof, and the other
instruments, documents or agreements executed by Borrower or any of its
Subsidiaries or their Affiliates pursuant to the terms hereof and in
furtherance of the purposes of this Agreement, any financing statements
covering portions or all of the Collateral and any and all other
instruments, documents, and agreements now or hereafter executed and/or
delivered by Borrower, any of its Subsidiaries or their Affiliates in
connection herewith, and includes without limitation each Interest Hedge
Agreement entered into by any Lender with a Borrower.
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"Loans" means, collectively, the group of advances made by the
Lenders hereunder pursuant to Section 2.1.
"Major Acquisition" means each Permitted Acquisition in which the
aggregate cash consideration to be paid by Borrower and its Subsidiaries
for the Acquired Business at or prior to the closing of the acquisition
thereof is in excess of $10,000,000.
"Majority Lenders" means, at any time, the Lenders holding
Commitment Percentages aggregating at least sixty-six and two-thirds
percent of the Commitment or, if the Commitment has been terminated, the
Lenders holding at least sixty-six and two-thirds percent of the aggregate
outstanding principal amount of the outstanding Loans and risk
participations in the same percentage of the outstanding Letters of Credit.
"Management Agreement" means the Executive Management Agreement
dated of December 3, 1997 among Borrower, Xxxxxxx X. Xxxxx & Sons, L.L.C.
and Mellon Ventures, L.P.
"Management Fees" means any and all management fees, consulting
fees or other amounts (other than expense reimbursements) paid or payable
to Xxxxxxx X. Xxxxx & Sons LLC, Mellon Ventures, Inc. or any other
Affiliate of Borrower for management, advisory or other related services
for Borrower, or any of its Subsidiaries.
"Margin Stock" means "margin stock" as such term is defined from
time to time in Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System.
"Material Adverse Effect" means any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of the Loan
Documents, (b) is or could reasonably be expected to be material and
adverse to the condition (financial or otherwise) or business operations of
Borrower and its Subsidiaries, taken as a whole, (c) materially impairs or
could reasonably be expected to materially impair the ability of Borrower
and its Subsidiaries, taken as a whole, to perform the Obligations, (d)
materially impairs or could reasonably be expected to impair any portion of
the Collateral having a value in excess of $1,000,000 or the Liens of the
Administrative Agent or the Lenders therein, or (e) materially impairs or
could reasonably be expected
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to materially impair the ability of the Administrative Agent or the Lenders
to enforce their legal remedies pursuant to the Loan Documents.
"Maturity Date" means December 3, 2001.
"Merger Distributions" means the amounts described on Schedule
1.3 paid to the Persons described therein for the purposes therein stated.
"MPPAA" means the Multiemployer Pension Plan Amendments Act of
1980, amending Title V of ERISA.
"Multiemployer Plan" shall have the same meaning as set forth in
Section 4001(a)(3) of ERISA.
"Net Income" means, for any Person and with respect to any fiscal
period, the consolidated net income before extraordinary or non-recurring
items of that Person for that period, determined in accordance with GAAP.
"Note" shall have the meaning given such term in Section 2.1
hereof.
"Notice of Borrowing" shall have the meaning given such term in
Section 2.12(a) hereof.
"Obligations" means the Loans, the Letter of Credit Obligations
and any and all other indebtedness, liabilities and obligations of Borrower
or any of its Subsidiaries to the Administrative Agent, the Co-Agents, the
Issuing Lender or any Lender of any kind and nature (including, without
limitation, principal, interest, charges, expenses, attorneys' fees and
other sums chargeable to Borrower or any of its Subsidiaries by the
Administrative Agent, Co-Agents, Issuing Lender or any Lender and future
advances made to or for the benefit of Borrower), arising under this
Agreement or under any of the other Loan Documents, whether arising by
reason of an extension of credit, opening of a Letter of Credit, Loan,
Guaranty, indemnification, Interest Hedge Agreement or in any other manner,
direct or indirect, absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising.
"Patent License" means all of the following, whether now owned or
existing or hereafter acquired or arising or in which Borrower or any of
its Subsidiaries now has or hereafter acquires any rights: any written
agreement granting any right to
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make, use, sell, sublicense and/or practice any invention on which a Patent
is in existence.
"Patents" means all of the following, whether now owned or
existing or hereafter acquired or arising or in which Borrower or any of
its Subsidiaries now has or hereafter acquires any rights: (a) all patents
and patent applications, (b) all inventions and improvements described and
claimed therein, (c) all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, (d) all income, royalties,
damages and payments now and hereafter due and/or payable to Borrower or
any of its Subsidiaries with respect thereto, including without limitation,
damages and payments for past, present or future infringements or
misappropriations thereof, (e) all rights to xxx for past present and
future infringements or misappropriations thereof, and (f) all other rights
corresponding thereto throughout the world.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, or any successor agency or Person performing substantially the
same functions.
"Permitted Acquisition" means each Acquisition by Borrower or any
of its Subsidiaries of an Acquired Business which either (i) is approved by
the Majority Lenders or (ii) satisfies each of the following requirements:
(a) the Acquired Business consists primarily of, or operates in
the business of, staffing, outsourcing, permanent placement,
consulting, professional employer organizations and the like or
activities reasonably related or incidental thereto;
(b) if the Acquisition of a Person, Borrower and its
Subsidiaries shall acquire not less than 80% of the ownership
interests of the Acquired Business;
(c) if the Acquisition of a Person, the Acquired Business's
board of directors or other governing body has approved the
Acquisition of that Person by Borrower and its Subsidiaries;
(d) the EBITDA of the Acquired Business for the most recent
twelve month fiscal period ending on or prior to its Acquisition
shall be in excess of $0;
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(e) Not later than 15 Business Days prior to the proposed
Acquisition, Borrower shall have delivered a Permitted Acquisition
Compliance Certificate demonstrating that, giving effect to the
proposed Acquisition:
(i) no Default or Event of Default will exist;
(ii) Borrower shall be in pro forma compliance with
the financial covenants set forth in Sections 7.1 through
7.3 as of the last month for which such information is
available;
(iii) the Senior Funded Debt to EBITDA Ratio for the
most recent twelve calendar month period ending on or prior
to the date of the proposed Acquisition (calculated for
Borrower and its Subsidiaries and the Acquired Business on
a combined pro forma basis) is not in excess of (A)
4.00:1.00, if such Acquisition occurs during the period
from the Closing Date through and including December 31,
1998, (B), 3.50:1.00 if such Acquisition occurs during
1999, (C), 3.25:1.00, if such Acquisition occurs during
2000, and (D) 3.00:1.00 if such Acquisition occurs during
any remaining term of this Agreement;
(iv) if Borrower issues any Subordinated Obligations
in connection with such Permitted Acquisition which require
cash payments of principal or interest prior to the
Maturity Date, Borrower is in compliance with Section 6.13;
together with such supporting information and calculations as the
Co-Agents or the Majority Lenders may reasonably request; and
(f) if the acquisition of that Acquired Business is a Major
Acquisition then, giving effect to such Major Acquisition, the
Remaining Cash is not less than zero.
"Permitted Acquisition Compliance Certificate" means a
certificate of Borrower substantially in the form of Exhibit E
hereto.
"Permitted Liens" means, collectively:
(a) those Liens existing on the date hereof described on
SCHEDULE 4.20 hereto;
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(b) Liens in favor of the Administrative Agent;
(c) inchoate Liens incident to construction or maintenance of
real property, or Liens incident to construction or maintenance of
real property, now or hereafter filed of record for which adequate
accounting reserves have been set aside and which are being contested
in good faith by appropriate proceedings and have not proceeded to
judgment, provided that, by reason of nonpayment of the obligations
secured by such Liens, no such real property is subject to a material
risk of loss or forfeiture;
(d) Liens for taxes and assessments on real property which are
not yet delinquent, or Liens for taxes and assessments on real
property for which adequate reserves have been set aside and are
being contested in good faith by appropriate proceedings and have not
proceeded to judgment, provided that, by reason of nonpayment of the
obligations secured by such Liens, no such real property is subject
to a material risk of loss or forfeiture;
(e) minor defects and irregularities in title to any property
which in the aggregate do not materially impair the fair market value
or use of the property for the purposes for which it is or may
reasonably be expected to be held;
(f) easements, exceptions, reservations, or other agreements
granted or entered into after the date hereof for the purpose of
pipelines, conduits, cables, wire communication lines, power lines
and substations, streets, trails, walkways, drainage, irrigation,
water, and sewerage purposes, dikes, canals, ditches, the removal of
oil, gas, coal, or other minerals, and other like purposes affecting
real property which in the aggregate do not materially burden or
impair the fair market value or use of such real property for the
purposes for which it is or may reasonably be expected to be held;
(g) rights reserved to or vested in any governmental agency by
Applicable Law to control or regulate, or obligations or duties under
Applicable Law to any governmental agency with respect to, the use of
any real property;
(h) rights reserved to or vested in any governmental agency by
Applicable Law to control or regulate, or obligations or duties under
Applicable Law to any governmental agency with respect to, any right,
power, franchise, grant, license, or permit;
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(i) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of real
property;
(j) statutory Liens, other than those described in clauses (c)
or (d) above, arising in the ordinary course of business with respect
to obligations which are not delinquent or are being contested in
good faith by appropriate proceedings, provided that, if delinquent,
adequate reserves have been established with respect thereto in
accordance with GAAP and, by reason of nonpayment, no property is
subject to a material risk of loss or forfeiture;
(k) Liens consisting of pledges or deposits made in connection
with obligations under workers' compensation laws or similar
legislation, including Liens of judgments thereunder which are not
currently dischargeable;
(l) Liens consisting of pledges or deposits of property to
secure performance in connection with bids, tenders, contracts or
operating leases made in the ordinary course of business to which
Borrower or any of its Subsidiaries is a party as lessee, provided
the aggregate value of all such pledges and deposits in connection
with any such lease does not at any time exceed 20% of the annual
fixed rentals payable under such lease;
(m) Liens consisting of deposits of property to secure statutory
obligations of Borrower or any of its Subsidiaries in the ordinary
course of its business;
(n) Liens consisting of deposits of property to secure (or in
lieu of) surety, appeal or customs bonds in proceedings to which
Borrower or any of its Subsidiaries is a party in the ordinary course
of its business; and
(o) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or any of its Subsidiaries in the
ordinary course of its business which is currently being contested in
good faith by appropriate proceedings, provided that adequate
reserves have been set aside with respect thereto, and such Liens are
discharged or stayed within 30 days of creation and no property is
subject to a material risk of loss or forfeiture.
"Person" means any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated
organization, association, corporation, institution, entity, party or
government (whether national, federal, state,
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county, city, municipal, or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"Plan" means any "employee pension benefit plan" that is subject
to Title IV of ERISA and which is maintained for employees of Borrower or
any of its ERISA Affiliates, and includes any Multiemployer Plan.
"Pledge and Security Agreements" means the Pledge and Security
Agreements dated as of the Closing Date (and each Pledge and Security
Agreement thereafter executed pursuant to Section 5.12), as the same may be
amended, restated, supplemented or otherwise modified from time to time,
executed by Borrower and each of its Subsidiaries in favor of the
Administrative Agent, pursuant to which Borrower and all Guarantors have
(a) granted a Lien in substantially all of their personal property to
secure their respective Obligations, and (b) pledged to the Administrative
Agent, for the benefit of the Administrative Agent, Co-Agents and Lenders,
all of the issued and outstanding Capital Stock of each of their respective
Subsidiaries and the Drop-Down Notes to secure their respective
Obligations.
"Pricing Period" means (a) the period commencing on the Closing
Date and ending on February 13, 1998, and (b) each subsequent period of
approximately 90 days beginning forty-five days following a Test Date and
ending on the day which is forty-four days following the immediately
succeeding Test Date.
"Proceeds" means "proceeds", as such term is defined in Section
9-306(l) of the UCC and, in any event, shall include, without limitation,
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to Borrower or any of its Subsidiaries from time to time with
respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to Borrower or any of its Subsidiaries
from time to time in connection with any requisitions, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by
any Governmental Authority (or any Person acting under color of
Governmental Authority) and (c) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Projected Earn-Outs" means, as of the last day of any Fiscal
Quarter, the amount of the payments which are then projected to be payable
by Borrower and its Subsidiaries with respect to Earn-Outs following that
date pursuant to the most current projections delivered in accordance with
Section 5.2(k).
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"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as it may be amended from time to time.
"Remaining Cash" means, in respect of each Major Acquisition, and
giving effect thereto, as of each date of determination, (a) the net cash
proceeds received by Borrower or any of its Subsidiaries as of that date
from issuances of its Capital Stock and Subordinated Obligations following
the Closing Date, plus (b) the amount, not to exceed $1,000,000, of the net
cash proceeds received by Borrower and its Subsidiaries from dispositions
of operating assets following the Closing Date under Section 6.3(c) minus
(c) the amount by which (i) the aggregate cash consideration paid at or
prior to the closing of each Major Acquisition which has then occurred
exceeds (ii) the product of $10,000,000 times the number of Major
Acquisitions which have then occurred.
"Reportable Event" shall have the meaning set forth in Section
4043 of ERISA.
"Request for Letter of Credit" shall have the meaning given such
term in Section 2.6(b) hereof.
"Senior Funded Debt to EBITDA Ratio" means, as of each date of
determination, the ratio of (a) the aggregate outstanding principal Funded
Debt of Borrower and its Subsidiaries on that date other than Subordinated
Obligations, to (b) Adjusted Company EBITDA for the most recent twelve
calendar month period ending on or prior to that date.
"Senior Officer" means, with respect to any Person, the (a) chief
executive officer, (b) president, (c) chief financial officer, (d) any vice
president, (e) the controller, or (f) the treasurer of that Person, or any
Person who functions in any such capacity, however designated.
"Sold Business" means any Person, or any business, asset or
division of a Person, which is hereafter the subject of a sale, transfer or
other disposition by Borrower and its Subsidiaries, and includes any
Subsidiaries of a Person which are also the subject of such a sale,
transfer or other disposition, in each case effective only upon the
consummation of such sale, transfer or other disposition.
"Solvent" means, as to any Person, that such Person (a) is able
to pay its debts as they mature, (b) is not engaged in a business or
transaction for which any property or assets remaining with that Person are
"unreasonably small capital" or are
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"unreasonably small in relation to its business" or the transaction, and
(c) does not intend to incur, or believe that it will incur, debts that
would be beyond its ability to pay as such debts mature, in each case as
such quoted terms are used in Section 548 of the Bankruptcy Code of 1978,
the Uniform Fraudulent Conveyances Act and the Uniform Fraudulent Transfer
Act.
"Stockholders Agreement" means the Stockholders Agreement dated
as of the Closing Date among the shareholders of Borrower, as at any time
amended.
"Subordinated Obligations" means, subject to Section 12.18A,
Indebtedness and other liabilities (including any liabilities for Earn-Outs
which are subordinated) incurred by Borrower (and without recourse to any
of the Subsidiaries of Borrower), in each case which (i) are unsecured,
(ii) have been subordinated in right of payment to the payment in full of
the Obligations pursuant to a Subordination Agreement, (iii) provide for
payment of interest on a quarterly basis (and then only to the extent that
no Default or Event of Default has occurred and remains continuing), (iii)
provide for representations, warranties, covenants, defaults and other
terms which are less restrictive than those appertaining to the Obligations
(and in any event containing a cross-acceleration provision rather than a
cross-default provision), and (iv) to the extent that such Indebtedness or
other liabilities require any cash payment of principal or interest prior
to the Maturity Date, such Indebtedness or liabilities are issued in
compliance with Section 6.13.
"Subordination Agreement" means (a) each subordination agreement
hereafter entered into in favor of the Administrative Agent for the benefit
of the Lenders by the holders of Subordinated Obligations, fully
subordinating such Subordinated Obligations to the Obligations in a manner
which is reasonably acceptable to the Majority Lenders, provided that such
form shall not be deemed unacceptable by reason of its provision for the
making of payments (when no Default or Event of Default has occurred and
remains continuing) projected by Borrower to be made in respect of such
Subordinated Obligations in the written projections issued in accordance
with Section 6.13 in connection with the issuance of such Subordinated
Obligations, and (b) as to any Earn-Out, any subordination provisions which
are substantially in the form of Exhibit G hereto and incorporated in the
acquisition agreements governing the purchase of the related Acquired
Business.
"Subsidiary" means, as to any Person, any other Person, of which
more than fifty percent of the outstanding shares of Capital Stock or other
ownership interest having ordinary voting power to elect a majority of the
board of directors of such corporation or similar governing body of such
other Person (irrespective of whether or
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not at the time stock or other ownership interests of any other class or
classes of such other Person shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or by one or more
"Subsidiaries" of such Person.
"Tax" means and includes any tax, levy, cost or charge of any
nature imposed following the Closing Date by any Governmental Authority,
excluding taxes on or measured by the net income of the Lenders imposed by
any jurisdiction in which the principal or relevant lending office of that
Lender is located or to which such Lender is otherwise subject.
"Termination Date" means the earliest of (a) the Maturity Date;
(b) the date the Commitment is reduced to zero pursuant to Section 2.11
hereof; and (c) the date the Commitment is terminated pursuant to Section
9.2 hereof.
"Termination Event" means (a) a "reportable event" as defined in
Section 4043 of ERISA (other than a reportable event that is not subject to
the provision for 30 day notice to the PBGC), (b) the withdrawal of
Borrower or any of its ERISA Affiliates from a Plan during any plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (c) the filing of a notice of intent to terminate a Plan or the
treatment of an amendment to a Plan as a termination thereof pursuant to
Section 4041 of ERISA, (d) the institution of proceedings to terminate a
Plan by the PBGC or (e) any other event or condition which might reasonably
be expected to constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.
"Test Date" means the Closing Date and the last day of each
Fiscal Quarter of Borrower thereafter.
"Total Funded Debt to EBITDA Ratio" means, as of each date of
determination, the ratio of (a) the aggregate outstanding principal Funded
Debt of Borrower and its Subsidiaries on that date, to (b) Adjusted Company
EBITDA for the most recent twelve calendar month period ending on or prior
to that date.
"Trade Secrets" means (a) trade secrets, along with any and all
(b) income, royalties, damages and payments now and hereafter due and/or
payable to Borrower or any of its Subsidiaries with respect thereto,
including, without limitation, damages and payments for past or future
infringements or misappropriations thereof, (c) rights to xxx for past,
present and future infringements or misappropriations thereof, and (d) all
rights corresponding thereto throughout the world.
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"Trademark Collateral Assignment" means the agreement of the same
name entered into on the Closing Date by each of Borrower's Subsidiaries
which owned any Trademarks, Trademark Licenses, or Trade Secrets as of that
date, as at any time amended.
"Trademark License" means all of the following, whether now owned
or existing or hereafter acquired or arising or in which Borrower or any of
its Subsidiaries now has or hereafter acquires any rights: any written
agreement granting any right to use any Trademark or trademark
registration.
"Trademarks" means all of the following, whether now owned or
existing or hereafter acquired or arising or in which Borrower or any of
its Subsidiaries now has or hereafter acquires any rights: (a) all
trademarks (including service marks and trade names, whether registered or
at common law), registrations and applications therefor, and the entire
product lines and goodwill of the business of Borrower or any of its
Subsidiaries connected therewith and symbolized thereby, (b) all renewals
thereof, (c) all income, royalties, damages and payments now and hereafter
due or payable or both with respect thereto, including, without limitation,
damages and payments for past, present or future infringements or
misappropriations thereof, (d) all rights to xxx for past, present and
future infringements or misappropriations thereof, and (e) all other rights
corresponding thereto throughout the world.
"UCC" means the Uniform Commercial Code as in effect in the State
of New York.
1.2 USE OF DEFINED TERMS. All terms defined in this Agreement and
the Exhibits hereto shall have the same defined meanings when used in any
other Loan Document, unless the context shall require otherwise.
1.3 ACCOUNTING TERMS; CALCULATIONS. All accounting terms not
specifically defined herein shall have the meanings generally attributed to
such terms under GAAP. Calculations hereunder shall be made and financial
data required hereby shall be prepared, both as to classification of items
and as to amounts, in accordance with GAAP, consistently applied (except as
otherwise specifically required herein). In the event that GAAP changes
during the term of this Agreement such that the financial covenants
contained in Sections 7.1 through 7.3, inclusive, would then be calculated
in a different manner or with different components, (a) Borrower, the
Administrative Agent, the Co-Agents and the Lenders agree to amend this
Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating the financial condition of Borrower and its
Subsidiaries to substantially the same criteria as were
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effective prior to such change in GAAP and (b) until such amendment,
Borrower (i) shall be deemed to be in compliance with the financial
covenants contained in such Sections following any such change in GAAP if
and to the extent that Borrower would have been in compliance therewith
under GAAP as in effect immediately prior to such change, and (ii) shall
continue to deliver reports required under Article 6 prepared in accordance
with GAAP, as in effect before the relevant changes thereto.
1.4 OTHER TERMS. All other terms used in this Agreement which are
not specifically defined herein but which are defined in the UCC shall have
the meanings set forth therein.
1.5 TERMINOLOGY. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural, and the plural shall
include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of
this Agreement, and all references in this Agreement to Articles, Sections,
subsections, paragraphs, clauses, subclauses, Exhibits or Schedules shall
refer to the corresponding Article, Section, subsection, paragraph, clause,
subclause of, Exhibit or Schedule attached to, this Agreement, unless
specific reference is made to the articles, sections or other subdivisions
of, exhibits or schedules to, another document or instrument. All
references to any instrument document or agreement shall, unless the
context otherwise requires, refer to such instrument, document or agreement
as the same may be, from time to time, amended, modified, supplemented,
renewed, extended, replaced or restated.
1.6 EXHIBITS. All Exhibits and Schedules attached hereto are by
reference made a part hereof.
1.7 PRINCIPLES OF RESTATEMENT. This Agreement amends and restates
the Existing Loan Agreement in its entirety, and the Existing Loan
Agreement is superseded hereby, provided that the Lenders shall continue to
have the benefit of each of the Loan Documents executed and delivered in
connection with the Existing Loan Agreement, including without limitation
the guarantees, liens and security interests granted therein.
1.8 CERTAIN TRANSITIONAL MATTERS. Concurrently with the
effectiveness of this Agreement, (a) Societe Generale shall become an
additional Lender hereunder, (b) Societe Generale shall pay to the other
Lenders through the Administrative Agent, such amounts as necessary to
result in the outstanding principal amount of the Loans made by each Lender
being equal to its Commitment Percentage
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of the Commitment, and (c) shall be a risk participant in the outstanding
Letter of Credit Obligations to the extent of its Commitment Percentage in
the manner contemplated by Section 2.6.
2. THE LOANS AND LETTERS OF CREDIT
2.1 LOANS. Subject to the terms and conditions hereof and
provided that no Default or Event of Default exists, each Lender severally
agrees to make revolving loans (each a "Loan" and collectively, the
"Loans") to Borrower, upon Borrower's request therefor made in accordance
with the provisions of Section 2.2 hereof, from time to time on any
Business Day during the period from the date hereof and up to, but not
including, the Termination Date, which when aggregated with the outstanding
Letter of Credit Obligations, do not exceed the lesser of the Commitment or
the amount then permitted by Section 10.2(a). The Loans made by each Lender
shall be evidenced by a promissory note, substantially in the form of
Exhibit A hereto, payable to that Lender in the original principal face
amount of such Lender's Commitment Percentage of the Commitment (together
with any and all amendments, modifications and supplements thereto, and any
renewals, replacements or extensions thereof, in whole or in part,
individually, a "Note" and collectively, the "Notes"). Prior to the
Termination Date, Loans may be borrowed, repaid and reborrowed in
accordance with the terms hereof. All Loans shall be payable in full on
the Termination Date.
2.2 BORROWING PROCEDURES.
(a) Borrower shall give the Administrative Agent notice of each
request for a Loan hereunder in accordance with this Section. The
Administrative Agent shall promptly notify each Lender of any Notice
of Borrowing received hereunder. Not later than 1:00 p.m.
(prevailing Eastern time), on the date specified for each borrowing
hereunder, each Lender shall make available to the Administrative
Agent the amount of the Loan to be made by such Lender in accordance
with such Lender's Commitment Percentage of the Loan requested, in
immediately available funds at an account designated by the
Administrative Agent. The Administrative Agent shall, subject to the
terms and conditions of this Agreement, on the Business Day specified
for such borrowing, make such amount available to Borrower in same
day funds to the Loan Account.
(b) Unless the Administrative Agent shall have been notified by
any Lender at least one (1) Business Day prior to the date on which
any
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Eurodollar Loan is to be made and not later than 1:00 p.m. (prevailing
Eastern time) on the date any Base Rate Loan is to be made, that such
Lender does not intend to make available to the Administrative Agent such
Lender's Commitment Percentage of such Loan, the Administrative Agent may
assume that such Lender has made such amount available to the
Administrative Agent on the date of such Loan and the Administrative Agent
may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from
such Lender. If such Lender does not pay such a corresponding amount
forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify Borrower and Borrower shall pay
such corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover from such Lender interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to
Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a rate per annum equal to the Federal Funds Rate,
for the first two Business Days, and thereafter at the rate per annum then
in effect with respect to Base Rate Loans. Nothing herein shall be deemed
to relieve any Lender from its obligation to fulfill its Commitment
Percentage of the Commitment or to prejudice any rights which the
Administrative Agent or Borrower may have against any Lender as a result of
any default by such Lender hereunder.
2.3 LOAN ACCOUNT; STATEMENTS OF ACCOUNT. The Administrative Agent
will maintain one or more loan accounts for Borrower to which the
Administrative Agent will charge all amounts advanced to or for the benefit
of Borrower hereunder or under any of the other Loan Documents and to which
the Administrative Agent will credit all amounts collected from or on
behalf of Borrower. The Administrative Agent will account to Borrower
periodically with a statement of charges and payments made pursuant to this
Agreement. Any such accounting rendered to Borrower shall be deemed to be
an account stated unless Borrower objects thereto by written notice to the
Administrative Agent within 60 days following its receipt thereof. Any
such notice shall only be deemed an objection to those items specifically
objected to therein. The unpaid principal amount of the Loans, the unpaid
interest accrued thereon, the interest rates applicable to such unpaid
principal amount and the accrued and unpaid fees, premiums and other
amounts due hereunder shall at all times be ascertained from the records of
the Administrative Agent and such records shall constitute prima facie
evidence of the amounts so due and payable.
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2.4 USE OF PROCEEDS. The proceeds of the Loans and all Letters of
Credit shall be used for valid and legal corporate purposes of Borrower and
its Subsidiaries, including without limitation, the payment of the Merger
Distributions, the financing of working capital requirements of Borrower
and its Subsidiaries, and financing of Permitted Acquisitions.
2.5 SEVERAL OBLIGATIONS OF THE LENDERS; REMEDIES INDEPENDENT. The
failure of any Lender to advance its Commitment Percentage of any Loan to
be made by it on the date specified therefor shall not relieve any other
Lender of its obligation to advance its Commitment Percentage of any Loan
to be made by it on such date, but neither any Lender nor the
Administrative Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender. The amounts payable
by Borrower at any time hereunder and under the Note to each Lender shall
be a separate and independent debt and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and its Note,
and it shall not be necessary for any other Lender or the Administrative
Agent to consent to, or be joined as an additional party in, any proceeding
for such purposes, provided that the Liens granted pursuant to the Loan
Documents to the Administrative Agent may only be exercised by the
Administrative Agent in accordance with the terms of the Loan Documents.
2.6 LETTERS OF CREDIT.
(a) As of the date of this Agreement, Letters of Credit with an
aggregate effective face amount of $1,363,000 are outstanding under the
Existing Loan Agreement (including without limitation certain of the
"Existing Creditanstalt Letters of Credit" described therein), and each
such Letter of Credit shall deemed to have been issued hereunder. Subject
to the terms and conditions hereof and provided that there exists no
Default or Event of Default, at any time and from time to time from the
Closing Date to (but not including) the Maturity Date, the Issuing Lender
agrees, in reliance upon the agreement of the Lenders set forth in Section
2.6(c) below, to issue, for the account of Borrower, such Letters of Credit
as Borrower may request by a Request for Letter of Credit (in the manner
described in Section 2.6(b)), each in such form as may be requested from
time to time by Borrower and agreed to by the Administrative Agent;
provided, however, that after giving effect to the issuance of any such
Letter of Credit, (i) the aggregate amount of all outstanding Letter of
Credit Obligations shall not exceed $10,000,000 at any time, and (ii) the
aggregate amount of all outstanding Loans, together with all outstanding
Letter of Credit Obligations will not exceed the lesser of the
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Commitment or the amount then permitted by Section 10.2(a). No Letter of
Credit shall have an expiration date which extends beyond the earliest of
(i) one year from the date of issuance thereof, (ii) the Maturity Date, and
(iii) any date that, at the issuance of such Letter of Credit, has been
fixed for termination of the Commitment pursuant to Section 2.12 hereof.
(b) Each request by Borrower for a Letter of Credit shall be
submitted to the Administrative Agent in writing (which may be by telecopy)
substantially in the form of Exhibit B attached hereto (a "Request for
Letter of Credit") and shall be effective only if received by Issuing
Lender prior to 1:00 p.m. (prevailing Eastern time) at least three Business
Days prior to the date when such Letter of Credit is required, accompanied
by an appropriate letter of credit application on the Issuing Lender's
customary form and such other Letter of Credit Documents (including,
without limitation, a reimbursement agreement) in such form and containing
such terms and conditions as the Issuing Lender requires, executed by a
Senior Officer of Borrower. Promptly upon receipt of a Request for Letter
of Credit, the Administrative Agent will notify the Issuing Lender and each
Lender of such request.
(c) Simultaneously with the issuance by the Issuing Lender of
any Letter of Credit under Section 2.6(a) above, each Lender shall be
deemed to have irrevocably and unconditionally purchased and received from
the Issuing Lender, without recourse or warranty, an undivided interest and
participation in such Letter of Credit (including, without limitation, all
obligations of Borrower with respect thereto) and any security therefor or
guaranty pertaining thereto, equal to such Lender's Commitment Percentage
of such Letter of Credit. Each Lender severally agrees that it shall be
absolutely liable, without regard to the occurrence of any Default or Event
of Default or any other condition precedent whatsoever, to the extent of
such Lender's Commitment Percentage, to reimburse the Issuing Lender on
demand for the amount of each draft paid by the Issuing Lender under such
Letter of Credit to the extent that such amount is not reimbursed by
Borrower. The failure of any Lender to make available to the Issuing
Lender its Commitment Percentage of the unreimbursed amount of any such
payment shall not relieve any other Lender of its obligation hereunder to
make available to the Issuing Lender its Commitment Percentage of the
unreimbursed amount of any payment on the date such payment is to be made.
The obligations of each Lender to make payments to the Issuing Lender with
respect to any Letter of Credit and its participations therein pursuant to
the provisions of this Section or otherwise and the obligations of Borrower
to make payments to the Issuing Lender with respect to any Letter of Credit
shall be
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irrevocable, and shall not be subject to any qualification or exception
whatsoever.
In the event that any payment by Borrower received by the
Issuing Lender with respect to a Letter of Credit and distributed by
the Issuing Lender to the Lenders on account of their participations
is thereafter set aside, avoided or recovered from the Issuing Lender
in connection with any receivership, liquidation, reorganization or
bankruptcy proceeding, or otherwise, each Lender which received such
distribution shall, upon demand by the Issuing Lender, return to the
Issuing Lender such Lender's Commitment Percentage of the amount set
aside, avoided or recovered, together with interest at the rate
required to be paid by the Issuing Lender upon the amount required to
be repaid by it. Each Lender shall share, pro rata, in accordance
with its participating interest, in any interest (but not in the
processing, administration and similar fees charged by the Issuing
Lender, which fees shall be solely for the account of the Issuing
Lender) which accrues to the Issuing Lender pursuant to any
applicable reimbursement agreement.
(d) Borrower agrees to reimburse the Issuing Lender,
immediately upon demand therefor, a principal amount equal to any payment
made by the Issuing Lender in respect of any Letter of Credit in good faith
(which good faith will be presumed to exist in the absence of evidence to
the contrary), together with interest on such amount from the date of any
payment through the date of payment by Borrower at the per annum rate
applicable to Base Rate Loans; provided, however, that subject to the terms
and conditions hereof Borrower may substitute for such payment a request
made within the time permitted hereunder for a Loan in accordance with
Section 2.12. The principal amount of any such payment made by Borrower to
the Issuing Lender shall be used to reimburse the Issuing Lender, for the
payment made by it in respect of such Letter of Credit.
(e) If Borrower fails to make any payment as and when required
by Section 2.6(d), or if Borrower fails to request a Loan in an amount
sufficient to pay the outstanding Letter of Credit Obligations, the Issuing
Lender may, without notice to or the consent of Borrower, deliver a Notice
of Borrowing to the Administrative Agent for a Loan in an aggregate amount
equal to the amount paid by the Issuing Lender in respect of its Letter of
Credit Obligations pursuant to Section 2.6(c) above and, for this purpose,
the conditions precedent to the making of a Loan under this Agreement shall
not apply. The proceeds of such Loan shall be paid to the Issuing Lender
to
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reimburse it for any payments made by it in respect of such Letter of
Credit Obligations in good faith (which good faith shall be presumed to
exist in the absence of evidence to the contrary).
(f) The issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of a new Letter of Credit, and each such
Letter of Credit, and all Letter of Credit Obligations in respect thereof,
shall in each case remain subject to this Section 2.6.
(g) If any draft shall be presented or other demand for payment
shall be made under any Letter of Credit, the Issuing Lender shall notify
the Administrative Agent and Borrower of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to
pay such draft or honor such demand for payment. If Borrower fails to
reimburse the Issuing Lender pursuant to the applicable reimbursement
agreement as provided in Section 2.6(d) above, the Issuing Lender may at
any time thereafter notify the Administrative Agent and the Lenders of the
amount of any such unpaid reimbursement obligation. No later than 3:00
p.m. (prevailing Eastern time) on the Business Day of its receipt of such
notice, each Lender shall make available to the Issuing Lender at the
Issuing Lender's principal office in New York, New York, in immediately
available funds, such Lender's Commitment Percentage of such unpaid
reimbursement obligation, together with an amount equal to the product of
(i) the average, computed for the period referred to in clause (iii) below,
of the weighted average interest rate paid by the Issuing Lender for
federal funds acquired by the Issuing Lender during each day included in
such period, times (ii) an amount equal to such Lender's Commitment
Percentage of such unpaid reimbursement obligation, times (iii) a fraction,
the numerator of which is the number of days that elapse from and including
the date the Issuing Lender paid the draft presented for honor or otherwise
made payment to the date on which such Lender's Commitment Percentage of
such unpaid reimbursement obligation shall become immediately available to
the Issuing Lender and the denominator of which is 360; provided, however,
that if the Issuing Lender fails to give the Lenders notice of Borrower's
failure to reimburse the Issuing Lender within three (3) Business Days
following such failure, the Lenders shall be required to pay interest only
for the period from and including the date the Issuing Lender made payment
through and including the third Business Day following such failure. The
responsibility of the Issuing Lender to Borrower, the Administrative Agent,
the Co-Agents and the Lenders shall be only to determine that the documents
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(including each draft) delivered under each Letter of Credit in connection
with such presentment shall be in conformity in all material respects with
such Letter of Credit.
(h) Borrower's obligations under this Section 2.6 shall be
absolute and unconditional under any and all circumstances and irrespective
of the occurrence of any Default or Event of Default or any condition
precedent whatsoever or any setoff, counterclaim or defense to payment
which Borrower may have or have had against the Issuing Lender, the
Administrative Agent, the Co-Agents, any Lender or any beneficiary of a
Letter of Credit. Borrower further agrees with the Issuing Lender, the
Administrative Agent, the Co-Agents and the Lenders that the Issuing
Lender, the Administrative Agent, the Co-Agents and the Lenders shall not
be responsible for, and Borrower's reimbursement obligations under Section
2.6(d) shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among Borrower, the
beneficiary of any Letter of Credit or any financing institution or other
party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of Borrower against the beneficiary of any Letter of
Credit or any such transferee. Neither the Issuing Lender, the
Administrative Agent, the Co-Agents nor the Lenders shall be liable for any
error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. Borrower agrees that any action taken or omitted by
the Issuing Lender, the Administrative Agent, the Co-Agents or any Lender
under or in connection with each Letter of Credit and the related drafts
and documents, if done in good faith and without gross negligence, shall be
binding upon Borrower and shall not result in any liability on the part of
the Issuing Lender, the Administrative Agent, the Co-Agents or any Lender
to Borrower.
(i) The Issuing Lender shall be entitled to rely, and shall be
fully protected in relying, upon any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Issuing Lender. The Issuing Lender shall be fully
justified in failing or refusing to take any action under this Agreement
unless it shall first have received such advice or
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concurrence of the Majority Lenders as it reasonably deems appropriate or
it shall first be indemnified to its reasonable 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.
(j) As between Borrower, on the one hand, and the
Administrative Agent, the Co-Agents and the Lenders, on the other, the
provisions of this Agreement, to the extent in conflict with any provision
of any Letter of Credit Documents, shall control.
2.7 TERM; TERMINATION. This Agreement shall terminate upon the
latest to occur of (a) the Termination Date; (b) the repayment and
satisfaction of all Obligations (other than any unsecured surviving
contingent indemnification obligations which survive the repayment of the
Obligations in accordance with Section 12.2); and (c) the termination or
expiration of all Letters of Credit (or the provision of cash collateral
therefor in a manner which is reasonably acceptable to the Issuing Lender).
2.8 PAYMENTS.
(a) Each payment by Borrower on the Loans shall be made prior
to 1:00 p.m. (prevailing Eastern time) on the date due and shall be made
without set-off or counterclaim to the Administrative Agent's account
No. 9301035763 Ref: Corporate Staffing Resources maintained in the name
of the Administrative Agent at The Chase Manhattan Bank (ABA #021 000
021) or at such other place or places as the Administrative Agent may
designate from time to time in writing to Borrower. Each such payment
shall be in lawful currency of the United States of America and in
immediately available funds. The Administrative Agent shall promptly
remit to each Lender such Lender's share of any payment received by the
Administrative Agent from Borrower.
(b) Each payment made by Borrower hereunder to the Issuing
Lender, the Administrative Agent or any Lender shall either (i) be
exempt from, and be made without reduction by reason of, any Tax or (ii)
to the extent that any such payment shall be subject to any Tax, be
accompanied by an additional payment by Borrower of such amount as may
be necessary so that the net amount received by the Issuing Lender, the
Administrative Agent and each Lender (after deducting all applicable
Taxes) is the same as the Issuing Lender, the Administrative Agent and
each such Lender would have received had such payment not been subject
to such Tax. Upon any payment of Tax by Borrower,
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Borrower shall promptly (and in any event within thirty days) furnish to
the Administrative Agent such tax receipts, certificates and other
evidence of such payment as Borrower may have or the Administrative
Agent, the Issuing Lender or any Lender may reasonably request. Each
Lender hereby certifies to the Borrower that, as of the Closing Date, it
is not subject to any Taxes which would require the making by Borrower
of any payment under this Section.
(c) If the due date of any payment hereunder or under the Notes
would otherwise fall on a day which is not a Business Day, then such
payment shall be due on the next succeeding Business Day and interest
shall be payable on the principal amount of such payment for the period
of such extension. If the Administrative Agent has not received any
payment due hereunder by the close of business on the date such payment
is due, Borrower authorizes the Administrative Agent, at its option, to
charge such payment as a Loan.
2.9 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Sections 2.1 hereof shall
be made from the Lenders and each payment of its Commitment Fee under
Section 3.5 hereof and of the Letter of Credit fee under Section 3.6 hereof
shall be made to the Administrative Agent for the account of the Lenders
pro rata according to their respective Commitment Percentages; (b) each
termination or reduction of the amount of the Commitments under Section
2.11 hereof shall be applied to the Lenders, pro rata according to their
respective Commitment Percentages; (c) the making, Conversion and
Continuation of Loans of a particular type shall be made pro rata among the
Lenders according to their respective Commitment Percentages; (d) each
payment or prepayment of principal of Loans by Borrower shall be made for
the account of the Lenders pro rata in accordance with their respective
Commitment Percentages; provided, that if immediately prior to giving
effect to any such payment in respect of any Loans the outstanding
principal amount of the Loans shall not be held by the Lenders pro rata in
accordance with their respective Commitment Percentages in effect at the
time such Loans were made (by reason of a failure of a Lender to make a
Loan hereunder in the circumstances described in the last paragraph of
Section 12.8 hereof), then such payment shall be applied to the Loans in
such manner as shall result, as nearly as is practicable in the judgment of
the Administrative Agent, in the outstanding principal amount of the Loans
being held by the Lenders pro rata in accordance with their respective
Commitment Percentages; and (e) each payment of interest on Loans by
Borrower shall be made for the account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable
to the Lenders.
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2.10 SHARING OF PAYMENTS, ETC.
(a) Borrower agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a
Lender may otherwise have, each Lender shall be entitled, at its option
(but only when an Event of Default has occurred and remains continuing),
to offset balances held by it for the account of Borrower at any of its
offices, in dollars or in any other currency, against any principal of
or interest on any of such Lender's Loans or any other amount payable to
such Lender hereunder, that is not paid when due (regardless of whether
such balances are then due to Borrower), in which case it shall promptly
notify Borrower and the Administrative Agent thereof, provided that such
Lender's failure to give such notice shall not affect the validity
thereof.
(b) If any Lender shall obtain from Borrower or any of its
Subsidiaries payment of any principal of or interest on any Loan owing
to it or payment of any other amount under this Agreement through the
exercise of any right of set-off, banker's lien or counterclaim or
similar right or otherwise (other than from the Administrative Agent as
provided herein), and, as a result of such payment, such Lender shall
have received more than its Commitment Percentage of the principal of or
interest on the Loans or such other amounts then due hereunder by
Borrower or its Subsidiaries, it shall promptly notify the
Administrative Agent of such payment and promptly purchase from such
other Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Loans or such other amounts,
respectively, owing to such other the Lenders (or in interest due
thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all
the Lenders shall share the benefit of such excess payment (net of any
expenses that may be incurred by such Lender in obtaining or preserving
such excess payment) pro rata in accordance with the unpaid principal of
and/or interest on the Loans or such other amounts, respectively, owing
to each of the Lenders; provided, that if at the time of such payment
the outstanding principal amount of the Loans shall not be held by the
Lenders in accordance with their respective Commitment Percentages in
effect at the time such Loans were made (by reason of a failure of a
Lender to make a Loan hereunder in the circumstances described in the
last paragraph of Section 12.8 hereof), then such purchases of
participations and/or direct interests shall be made in such manner as
will result, as nearly as is practicable in the judgment of the
Administrative Agent, in the outstanding principal amount of the Loans
being held by the Lenders according to each Lender's Commitment
Percentage. To such end all the Lenders shall make appropriate
adjustments among
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themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
(c) Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans
or other amounts (as the case may be) owing to such Lender in the amount
of such participation.
(d) Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to
exercise and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of Borrower or of its
Subsidiaries. If, under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 2.10 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 entitled under this
Section 2.10 to share in the benefits of any recovery on such secured
claim.
2.11 PREPAYMENT; COMMITMENT REDUCTION AND TERMINATION.
(a) If, as of the last day of any calendar month (a "Month End
Test"), Borrower is not in compliance with the terms of Sections 7.1 and
7.2 then Borrower shall, within 45 days following such Month End Test,
prepay the Loans (or shall provide cash collateral for Letters of Credit
acceptable to the Issuing Lender) in the amount necessary to cause
Borrower to be in pro forma compliance with such covenants.
(b) Subject to the other terms and conditions hereof, upon
written notice to the Administrative Agent in accordance with Section
12.7, Borrower may, at any time, at its option and without premium or
penalty, either terminate the Commitment or reduce the Commitment in
integral multiples of $100,000, on the date specified in such notice, by
paying to the Administrative Agent for the benefit of each Lender the
accrued amount of the Commitment Fee applicable to the amount of the
Commitment so reduced or terminated.
(c) In no event may Borrower reduce the Commitment below the sum
of (i) the principal amount of Loans outstanding hereunder and (ii)
the Letter of Credit Obligations (unless, in connection with a
termination of the entire Commitment, cash collateral for such Letter
of Credit Obligations has
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been provided to the Issuing Lender in a manner which is reasonably
acceptable to the Issuing Lender).
(d) The Commitment shall be automatically reduced to zero on
the Maturity Date.
(e) The Commitment, once terminated or reduced, may not be
reinstated or increased without the consent of all of the Lenders.
(f) Borrower may prepay the outstanding Loans, in whole or in
part, as provided in Section 2.12, provided, however, that if Borrower
prepays any Loan which is a Eurodollar Loan prior to the last day of the
Interest Period applicable to such Eurodollar Loan, Borrower shall
concurrently pay to the Lenders all amounts payable to the Lenders
pursuant to Section 3.10 hereof.
2.12 CERTAIN NOTICES; MINIMUM AMOUNTS.
(a) All notices given by Borrower to the Administrative Agent
hereunder of terminations or reductions of the Commitment or of
borrowings, Conversions, Continuations or prepayments of Loans hereunder
shall either be oral, with prompt written confirmation, which may be by
telecopy, or in writing, with such written confirmation or writing, in
the case of a borrowing, to be substantially in the form of Exhibit C
attached hereto (a "Notice of Borrowing"); shall be irrevocable; shall
be effective only if received by the Administrative Agent prior to 11:30
a.m. (prevailing Eastern time) on a Business Day which is: (i) at least
two Business days prior to the termination or any reduction of the
Commitment, (ii) not later than the Business Day on which such Loan is
to be made as, Converted to, or Continued as, a Base Rate Loan, (iii) at
least three Business Days prior to the date such Loan is to be made as,
Converted to, or Continued as, a Eurodollar Loan, or the prepayment of
any Eurodollar Rate Loan, and (iv) not later than the date of any such
prepayment, in the case of a prepayment of a Base Rate Loan. Each such
notice to reduce the Commitment or to prepay the Loans shall specify the
amount of the Commitment to be reduced or of the Loans to be prepaid and
the date of such reduction or prepayment. Each such notice of borrowing,
Conversion or Continuation shall specify: (1) the amount of such
borrowing, Conversion or Continuation; (2) that the amount of the Loan
to be made, Converted or Continued, when aggregated with all other Loans
to be outstanding following the funding, Conversion or Continuation of
such Loan, and all outstanding Letters of Credit, does not exceed the
Commitment, (3) whether such Loan will
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be made, Converted or Continued as a Eurodollar Loan or as a Base Rate
Loan, (4) the date such Loan is to be made, Converted or Continued
(which shall be a Business Day and, if such Loan is to Convert or
Continue a Eurodollar Loan then outstanding, shall not be prior to the
last day of then current Interest Period for such outstanding Loan), and
(5) if such Loan is a Eurodollar Loan, the duration of the Interest
Period with respect thereto. If Borrower fails to specify the duration
of the Interest Period for any Eurodollar Loan, Borrower shall instead
be deemed to have requested that such Loan be made as, Converted to, or
Continued, as a Base Rate Loan. If on the last day of the Interest
Period of any Eurodollar Loan hereunder, the Administrative Agent has
not received a timely notice hereunder to Convert, Continue or prepay
such Loan, such Loan shall be converted to a Base Rate Loan.
(b) Except for mandatory prepayments made pursuant to Section
2.11(a) hereof, each borrowing, Conversion and partial prepayment of
principal of Loans shall be in a minimum principal amount of $100,000
and shall be in an integral multiple of $100,000 (borrowings,
Conversions or prepayments of or into Loans of different types or, in
the case of Eurodollar Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings, Conversions and
prepayments for purposes of the foregoing, one for each type of Loan or
Interest Period).
2.13 SECURITY AND GUARANTEES. This Agreement, the Obligations
hereunder and the Obligations under the other Loan Documents shall have the
benefit of the Guarantees and the Pledge and Security Agreements, and shall
be secured by the Liens granted by the other Loan Documents. Each of the
Lenders shall be entitled to the ratable benefit of the Liens created by
the Loan Documents to secure all Obligations under the Loan Documents owed
to that Lender, provided that the Obligations owed to each Lender under
Interest Hedge Agreements shall be entitled to the pari passu benefit of
such Liens (in relation to the other Obligations) only to the extent of the
Administrative Agent's standard risk assessment factor for such Interest
Hedge Agreements, and shall be entitled to the subordinate benefit of such
Liens to the extent of any excess.
3. FEES AND INTEREST
3.1 INTEREST.
(a) Unless the Default Rate applies, the average daily
outstanding principal amount of the Obligations (other than Obligations
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representing the undrawn amount of outstanding Letters of Credit) shall
bear interest from the date thereof until paid in full at the following
rates:
(i) the outstanding principal amount of each
Eurodollar Loan shall bear interest at a fixed rate of interest
per annum equal to the Eurodollar Rate for the then current
Interest Period for such Loan plus the applicable Eurodollar
Spread calculated daily on the basis of a 360-day year and actual
days elapsed;
(ii) the outstanding principal amount of each Base
Rate Loan, Letter of Credit Obligations and all other sums payable
by Borrower hereunder shall bear interest at a fluctuating rate
per annum. equal to the Base Rate plus the applicable Base Rate
Spread, calculated daily on the basis of a 360-day year and actual
days elapsed; and
(iii) the amount of any payment of principal and, to
the extent permitted by Applicable Law, interest or other amount
payable hereunder which is not paid when due, shall bear interest
at the Default Rate.
(b) Accrued interest shall be payable (i) in the case of Base
Rate Loans, monthly on the last day of each month hereafter for the
current month, commencing with the first such date following the Closing
Date; (ii) in the case of a Eurodollar Loan, on the last day of each
Interest Period, provided, however, that if any Interest Period in
respect of a Eurodollar Loan is longer than three months, such interest
prior to maturity shall be paid on the last Business Day of each three
month interval within such Interest Period as well as on the last day of
such Interest Period; (iii) in the case of any Eurodollar Loan, upon the
prepayment thereof, (iv) in the case of any other sum payable hereunder
as set forth elsewhere in this Agreement or, if not so set forth, on
demand; and (v) in the case of interest payable at the Default Rate, on
demand.
3.2 INTEREST PERIOD. The Interest Period for any Eurodollar Loan
shall commence on the date such Loan is made, Converted or Continued as
specified in the notice delivered pursuant to Section 2.12 hereof
applicable thereto and shall continue for a period of one, two, three or
six months, as specified in such notice for such Eurodollar Loan. If
Borrower fails to specify the duration of the Interest Period for any
Eurodollar Loan in the notice therefor delivered pursuant to Section 2.12
hereof, such Loan shall instead be made or Converted, as appropriate, as a
Base Rate Loan.
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3.3 LIMITATIONS ON INTEREST PERIODS. Borrower may not select any
Interest Period for any Eurodollar Loan which extends beyond the Maturity
Date. Notwithstanding any other provision hereof to the contrary, Borrower
shall not have, in the aggregate for all Loans outstanding, more than five
different Interest Periods at any given time during the term of this
Agreement.
3.4 CONVERSIONS AND CONTINUATIONS. So long as there then exists
no Default or Event of Default hereunder, Borrower shall have the right, on
any Business Day, from time to time, upon written notice in accordance with
Section 2.12 hereof, to Convert Loans of one type to Loans of the other
type and to Continue Loans of one type as Loans of the same type; provided
that a Eurodollar Loan may not be Converted to a Base Rate Loan prior to
the end of the Interest Period applicable thereto.
3.5 COMMITMENT FEE. From the Closing Date, Borrower hereby
agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee (the "Commitment Fee"), calculated on the basis of a 360-day
year and actual days elapsed, equal to 0.50% per annum of the average daily
amount of the Commitment not utilized for Loans or Letters of Credit,
payable on the last Business Day of each calendar month following the
Closing Date for that calendar month or portion thereof and on the
Termination Date.
3.6 LETTER OF CREDIT FEES. With respect to each Letter of
Credit, Borrower shall pay the following fees to the Administrative Agent:
(a) a letter of credit fee equal to the then applicable
Eurodollar Rate Spread per annum of the face amount of such Letter of
Credit, payable monthly in arrears on the last Business Day of each
calendar month for the portion of that calendar month in which such
Letter of Credit was outstanding, which fee shall be for the ratable
account of the Lenders in accordance with their Commitment Percentages.
(b) concurrently with the issuance of each Letter of Credit
(and concurrently with each amendment thereto which increases the amount
thereof), a letter of credit fee in an amount equal to the greater of
(i) $500 or .125% of the face amount of such Letter of Credit (or in the
case of any such amendment, of the increased amount thereof), in each
case, for the sole account of the Issuing Lender, as a fronting fee.
Each of the fees payable with respect to Letters of Credit under this
Section is earned when due and is nonrefundable.
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3.7 ILLEGALITY. Notwithstanding any other provision of this
Agreement to the contrary, in the event that it shall become unlawful for
any Lender to obtain funds in the London interbank market or for such
Lender to maintain a Eurodollar Loan, then such Lender shall promptly
notify the Administrative Agent and Borrower whereupon, for the duration of
such condition (a) the portion of that Eurodollar Loan to be made by the
affected Lender shall instead be funded and treated as a Base Rate Loan,
and (b) to the extent that the maintenance by such Lender of its portion of
any outstanding Eurodollar Loan is illegal, then such portion shall
commence to bear interest at the rate applicable to Base Rate Loans on the
last day of the then applicable Interest Period or at such earlier time as
may be required by Applicable Law.
3.8 INABILITY TO DETERMINE EURODOLLAR RATE. In the event that
the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that, by reason of circumstances
affecting the London interbank market, quotation of interest rates for the
relevant deposits referred to in the definition of the "Eurodollar Rate"
herein are not being provided in the relevant amounts or for the relevant
maturities for the purpose of determining rates of interest for a
Eurodollar Loan, the Administrative Agent will give notice of such
determination to Borrower and each Lender at least one day prior to the
date specified in such notice of borrowing, Conversion or Continuation for
such Loan to be made. If any such notice is given, no Lender shall have
any obligation to make available, maintain, Convert or Continue Eurodollar
Loans. Until the earlier of the date any such notice has been withdrawn by
the Administrative Agent or the date when the Administrative Agent, the
Lenders and Borrower have mutually agreed upon an alternate method of
determining the rates of interest payable on a Eurodollar Loan, as the case
may be, Borrower shall not have the right to request any Eurodollar Loan.
3.9 INCREASED COSTS AND REDUCED RETURN.
(a) If following the date hereof any event shall occur (whether
in the form of a reserve requirement, exchange control regulations,
governmental charges, compliance with any guideline or request from any
central bank or other Governmental changes in the interbank eurodollar
market or the position of any Lender in such market or otherwise) and
the result of any such event is, in any Lender's reasonable judgment, to
increase the costs which such Lender determines are attributable to its
making or maintaining any Eurodollar Loan, or its obligation to make
available any Eurodollar Loan or to reduce the amount of any sum
received or receivable by such Lender under this Agreement or the Note
with respect to any Eurodollar Loan, then, within ten
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days after demand by such Lender, Borrower agrees to pay to such Lender
such additional amount or amounts as will compensate such Lender for
such increased cost or reduction.
(b) In addition to any amounts payable pursuant to Section 3.9
(a), if any Lender shall have determined that the adoption following the
date hereof of any law, rule, regulation or guideline regarding capital
adequacy, or any change after the date hereof in any of the foregoing or
in the enforcement or interpretation or administration of any of the
foregoing by any court or any central bank or other Governmental
Authority charged with the enforcement or interpretation or
administration thereof, or compliance by the Issuing Lender or any
Lender (or any lending office of any Lender) or the Issuing Lender's or
such Lender's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) issued after
the date hereof by any such authority, central bank or comparable
agency, has the effect of reducing the rate of return on the Issuing
Lender's or such Lender's capital or on the capital of the Issuing
Lender's or such Lender's holding company, if any, as a consequence of
its making or maintaining any Loan, its incurring any Letter of Credit
Obligations, or its incurring any obligations under this Agreement to a
level below that which the Issuing Lender or such Lender or the Issuing
Lender's or such Lender's holding company could have achieved but for
such adoption, change or compliance (taking into consideration the
Issuing Lender's or such Lender's policies and the policies of the
Issuing Lender's or such Lender's holding company with respect to
capital adequacy) by an amount deemed by the Issuing Lender or such
Lender to be material, then, upon demand by the Issuing Lender or such
Lender, Borrower agrees to pay to the Issuing Lender or such Lender from
time to time such additional amount or amounts as will compensate the
Issuing Lender or such Lender or the Issuing Lender's or such Lender's
holding company for any such reduction suffered. Borrower's obligations
under this Section shall survive the termination of this Agreement and
the repayment of the Obligations.
3.10 BREAKAGE COSTS, ETC. Borrower hereby agrees to pay to the
Administrative Agent, the Co-Agents and each Lender, and reimburse each
such Person for, all losses or expenses which it may sustain or incur as a
consequence of failure by Borrower to consummate any notice of prepayment,
borrowing, Conversion or Continuation made by Borrower, including, without
limitation, any such loss or expense arising from interest or fees payable
by any Lender to lenders of funds obtained by it in order to maintain any
Eurodollar Loan. Borrower hereby agrees to pay to the Administrative
Agent, the Co-Agents and each Lender, and to reimburse
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each such Person for, any and all losses or expenses which it may sustain
or incur as a consequence of prepayment of any Eurodollar Loan on other
than the last day of the Interest Period for such Loan (including, without
limitation, any prepayment pursuant to Section 2.11 or any Conversion of a
Eurodollar Loan to a Base Rate Loan pursuant to Section 3.7). Borrower's
obligations under this Section shall survive the termination of this
Agreement and the repayment of the Obligations.
3.11 NOTICE OF AMOUNTS PAYABLE TO THE LENDER. If the
Administrative Agent, the Issuing Lender or any Lender shall seek payment
of any amounts from Borrower pursuant to Sections 2.8(b), 3.9 or 3.10
hereof, it shall notify the Administrative Agent and Borrower of the amount
payable by Borrower thereunder within three months following the date upon
which it first becomes aware that any such amount is owing. A certificate
of the Administrative Agent, the Issuing Lender or such Lender seeking
payment pursuant to Sections 2.8(b), 3.9 or 3.10 hereof, setting forth in
reasonable detail the factual basis for and the computation of the amounts
specified, shall be presumptive evidence, absent manifest error, as to the
amounts owed. Borrower's obligations under this Section shall survive the
termination of this Agreement and the repayment of the Obligations.
3.12 INTEREST SAVINGS CLAUSE. Nothing contained in this
Agreement or in the Notes or in any Letter of Credit Documents or in any of
the other Loan Documents shall be construed to permit any Lender to receive
at any time interest, fees or other charges in excess of the amounts which
such Lender is legally entitled to charge and receive under any law to
which such interest, fees or charges are subject. In no contingency or
event whatsoever shall the compensation payable to such Lender by Borrower,
howsoever characterized or computed, hereunder or under the Note or under
any other agreement or instrument evidencing or relating to the
Obligations, exceed the highest rate permissible under any law to which
such compensation is subject. There is no intention that any Lender shall
contract for, charge or receive compensation in excess of the highest
lawful rate, and, in the event it should be determined that any excess has
been charged or received, then, ipso facto, such rate shall be reduced to
the highest lawful rate so that no amounts shall be charged which are in
excess thereof, and such Lender shall apply such excess against the Loans
then outstanding (with such application being made first against the Base
Rate Loans, to the extent thereof, second against the Eurodollar Loans, to
the extent thereof, and then to any other Obligations hereunder) and, to
the extent of any amounts remaining thereafter, refund such excess to
Borrower.
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4. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, the Co-Agents and
the Lenders to enter into this Agreement and to make Loans and issue or
cause the issuance of Letters of Credit hereunder, Borrower hereby makes
the following representations and warranties to the Administrative Agent,
the Co-Agents and the Lenders, which shall be true and correct in all
material respects on the date hereof and (except to the extent that any
such representation or warranty expressly relates to a particular date)
shall continue to be true and correct in all material respects at the time
of the making of each Loan and upon the issuance of each Letter of Credit:
4.1 CORPORATE EXISTENCE AND QUALIFICATION. Borrower and its
Subsidiaries are each corporations duly organized, validly existing and in
good standing under the laws of their respective states of incorporation.
Borrower and each of its Subsidiaries are duly qualified as foreign
corporations and in good standing in each state wherein the conduct of
their business or the ownership of their property requires such
qualification, except where the failure to be so qualified and in good
standing may not reasonably be expected to have a Material Adverse Effect.
As of the Closing Date, SCHEDULE 4.1 is a listing of each state where
Borrower or any of its Subsidiaries are duly qualified as foreign
corporations.
4.2 CORPORATE AUTHORITY; VALID AND BINDING EFFECT. Borrower and
each of its Subsidiaries have the corporate power and authority to execute,
deliver and perform under this Agreement and the other Loan Documents to
which it is a party, and to borrow and incur the other Obligations, and
each such party has taken all necessary and appropriate corporate action to
authorize the execution, delivery and performance of this Agreement and
such other Loan Documents to which it is a party. This Agreement and the
other Loan Documents to which Borrower and its Subsidiaries are a party
constitute the valid and legally binding obligations of each such party,
enforceable against them in accordance with their respective terms; except
that enforceability may be limited by bankruptcy, insolvency and other laws
affecting creditor's rights generally and except that the availability of
certain remedies may be limited by general principles of equity.
4.3 NO CONFLICT. The execution, delivery and performance by
Borrower and its Subsidiaries of this Agreement and the other Loan
Documents to which it is a party (a) are not in contravention of any
provisions of Applicable Law applicable to Borrower or its Subsidiaries;
(b) will not violate or result in a default under any agreement or
indenture to which Borrower or its Subsidiaries is a party or by which
Borrower or its Subsidiaries is bound; (c) do not contravene the Articles
of
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Incorporation or By-laws of Borrower or its Subsidiaries; and (d) will not
result in or require the creation or imposition of any Lien on any of the
property or assets of Borrower or any of its Subsidiaries other than Liens
in favor of the Administrative Agent under the Loan Documents.
4.4 GOVERNMENTAL ACTION. The execution, delivery and performance
of this Agreement and the other Loan Documents by Borrower and its
Subsidiaries do not require any registration with, consent or approval of,
or any notice to, or other action to, with or by any Governmental Authority
except (a) filings, consent or notices which have been obtained and a copy
thereof furnished to each Lender; and (b) filings necessary to perfect the
Liens granted by this Agreement and the Loan Documents.
4.5 NO LITIGATION. Except as set forth on SCHEDULE 4.5 hereto,
as of the Closing Date there are no proceedings pending or threatened
against Borrower or any of its Subsidiaries before or by any court or
administrative agency.
4.6 SOLVENCY. As of the Closing Date and as of the date hereof,
after giving effect to the execution and delivery of this Agreement and the
other Loan Documents, the consummation of the transactions contemplated
hereby and thereby and the making of each Loan and Letter of Credit
hereunder, Borrower and each of its Subsidiaries are Solvent.
4.7 TAXES. Borrower and each of its Subsidiaries have filed all
federal, state, local and foreign tax returns, reports and estimates which
are required to be filed by it and all taxes (including penalties and
interest, if any) shown on such returns, reports and estimates as being due
and payable or which are otherwise due and payable have been fully paid
(other than taxes contested in good faith by appropriate proceedings
diligently pursued and as to which appropriate reserves have been
established and maintained in conformity with GAAP). Such tax returns
properly and correctly reflect, in all material respects, the income and
taxes of Borrower or such Subsidiary for the periods covered thereby. The
federal tax identification number of Borrower and each of its Subsidiaries
is set forth on SCHEDULE 4.7 attached hereto.
4.8 FINANCIAL INFORMATION.
(a) As of the date hereof, Borrower has provided the Lenders
with the audited consolidated financial statements of Borrower and its
consolidated Subsidiaries for the fiscal year ended December 31, 1996,
including consolidated balance sheets, consolidated income statements
and consolidated statements of cash flow. Such financial statements
have been
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prepared in accordance with GAAP and fairly present, as of the date
thereof and for the periods covered thereby the financial position and
results of operations of Borrower and its Subsidiaries. The Lenders
hereby waive the failure of Borrower to deliver its audited annual
financial statements for its 1997 Fiscal Year on a timely basis
pursuant to the terms of the Existing Loan Agreement, provided this
waiver shall not be construed in derogation of Section 5.2(b).
(b) As of the date hereof, the forecasted financial statements
of Borrower and its Subsidiaries, consisting of balance sheets,
income statements and cash flow statements for Borrower and its
Subsidiaries, and the projected schedules of excess availability,
giving effect to the consummation of the transactions contemplated by
this Agreement covering the four-year period commencing on the date
hereof, prepared on an annual basis and attached hereto as Schedule
4.8 (the "Projections"): (i) are based on reasonable estimates and
assumptions; and (ii) reflected, as of the date prepared, and
continue to reflect, as of the date of this Agreement, the reasonable
estimate of Borrower of the results of operations and other matters
projected therein for the periods covered thereby, it being
understood that the Projections are subject to the uncertainty
inherent in all financial forecasts, and do not constitute a
representation or warranty that the results and other matters
projected therein will in fact be achieved.
4.9 TITLE TO ASSETS. Borrower and each of its Subsidiaries has
good and marketable title to and ownership of the Collateral and all of its
other assets, free and clear of any and all Liens whatsoever except for
Permitted Liens.
4.10 VIOLATIONS OF LAW. Neither Borrower nor any of its
Subsidiaries is in violation of any applicable statute, rule, regulation or
ordinance of any Governmental Authority, the violation of which may be
reasonably expected to have a Material Adverse Effect.
4.11 ERISA. Except as disclosed on SCHEDULE 4.11 attached hereto
and incorporated herein by reference:
(a) Identification of Plans. Neither Borrower nor any ERISA
Affiliate maintains or contributes to, or has maintained or
contributed to, any Plan or Multiemployer Plan that is subject to
regulation by Title IV of ERISA;
(b) Compliance. Each Plan has at all times been maintained,
by its terms and in operation, in accordance with all Applicable
Laws; except
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for such noncompliance (when taken as a whole) that may not
reasonably be expected to have a Material Adverse Effect;
(c) Liabilities. Neither Borrower nor any ERISA Affiliate is
currently or, to the best knowledge of Borrower or any ERISA
Affiliate, will become subject to any liability (including withdrawal
liability), tax or penalty whatsoever to any person whomsoever with
respect to any Plan, including, but not limited to, any tax, penalty
or liability arising under Title I or Title IV of ERISA or Chapter 43
of the Code, except such liabilities (when taken as a whole) which
may not reasonably be expected to have a Material Adverse Effect;
(d) Funding. Except where the same may not reasonably be
expected to have a Material Adverse Effect, Borrower and each ERISA
Affiliate has made full and timely payment of (i) all amounts
required to be contributed under the terms of each Plan and
Applicable Law and (ii) all material amounts required to be paid as
expenses of each Plan. No Plan has any "amount of unfunded benefit
liabilities" (as defined in Section 4001(a)(18) of ERISA); and
(e) Insolvency; Reorganization. No Plan is insolvent (within
the meaning of Section 4245 of ERISA) or in reorganization (within
the meaning of Section 4241 of ERISA).
4.12 ENVIRONMENTAL LAWS. Except as to any matter which does not
have and may not reasonably be expected to have a Material Adverse Effect:
(a) Borrower and each of its Subsidiaries have obtained all
permits, licenses and other authorizations, if any, which are
required under Environmental Laws for the operation of Borrower's and
its Subsidiaries' business and Borrower and each of its Subsidiaries
are in compliance with all terms and conditions of required permits,
licenses and authorizations, and are also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, notifications, schedules and timetables
contained in the Environmental Laws;
(b) Neither Borrower nor any of its Subsidiaries is aware of or
has received notice of, the disposal or release or presence of
Hazardous Substances on any of its properties, or of any past,
present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or
prevent compliance or continued compliance on the part
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of Borrower or any such Subsidiary with Environmental Laws, or may
give rise to any common law or legal liability, or otherwise form the
basis of any claim, action, demand, suit, Lien, proceeding, hearing,
study or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any Hazardous Substance;
(c) All assets of Borrower and its Subsidiaries are free from
Hazardous Substances except for Hazardous Substances used, maintained
or handled by Borrower or such Subsidiary in the ordinary course of
business and the use and disposal of any and all such Hazardous
Substances is effected by Borrower or such Subsidiary in compliance
with all applicable Environmental Laws; and
(d) There is not pending or threatened against Borrower or any
of its Subsidiaries and neither Borrower nor any of its Subsidiaries
knows of any facts or circumstances that might give rise to, any
civil, criminal or administrative action, suit, demand, claim,
hearing, notice or demand letter, notice of violation, environmental
Lien, investigation, or proceeding relating in any way to
Environmental Laws.
4.13 MARGIN STOCK. Neither Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for buying or carrying Margin Stock, and no part of the
proceeds of any Loan shall be used, directly or indirectly, to purchase or
carry Margin Stock.
4.14 NO DEFAULT. No Default or Event of Default has occurred and
remains continuing.
4.15 CHIEF EXECUTIVE OFFICE; COLLATERAL LOCATIONS. As of the date
hereof Borrower's and each of its Subsidiaries' principal place of business,
chief executive office and location of its books and records is set forth on
SCHEDULE 4.15 attached hereto and neither Borrower, any of its Subsidiaries nor
any of their respective predecessors has had any other chief executive office or
principal place of business except as set forth on SCHEDULE 4.15 during the five
(5) years immediately preceding the date hereof. As of the date hereof,
SCHEDULE 4.15 attached hereto and incorporated herein by reference sets forth a
true, correct and complete list of all places of business and all locations at
which any Collateral is located.
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4.16 CORPORATE AND TRADE OR FICTITIOUS NAMES. As of the Closing
Date, except as set forth on SCHEDULE 4.16 hereof, during the five (5) years
immediately preceding the date of this Agreement, neither Borrower, any of its
Subsidiaries, nor any of their respective predecessors has been known as or used
any corporate, trade or fictitious name other than its current corporate or
individual name as such name is set forth in this Agreement.
4.17 ADEQUACY OF INTANGIBLE ASSETS. Borrower and each of its
Subsidiaries possesses all intellectual property licenses, patents, patent
applications, copyrights, Trademarks, Trademark Licenses, trademark
applications, and trade names and, as of the date hereof, all governmental
registrations and licenses reasonably necessary to continue to conduct its
business as heretofore conducted by it, and all such intellectual property
licenses, patents, patent applications, copyrights, Trademarks, Trademark
Licenses, trademark applications, trade names, licenses and registrations which
have been registered with any Governmental Authority are listed on SCHEDULE 4.17
hereto.
4.18 INVESTMENT PROPERTY. As of the date hereof, SCHEDULE 4.18 is
a complete list of all Subsidiaries, Investment Property and other Investments
in any Person, including but not limited to, all interests in any partnership or
joint venture. As of the date hereof, except as otherwise disclosed on SCHEDULE
4.18, all shares of stock in any corporation held by Borrower or any of its
Subsidiaries are evidenced by stock certificates issued in the name of Borrower
or such Subsidiary and all other Investment Property of Borrower or any
Subsidiary is held directly in the name of Borrower or such Subsidiary and is
not held in any brokerage or similar account, in the name of any financial
institution or in any nominee name.
4.19 INDEBTEDNESS. SCHEDULE 4.19 hereto is a complete and correct
list, as of the date hereof, of each credit agreement, loan agreement,
indenture, note purchase agreement, Guarantee, Interest Hedge Agreement or other
arrangement providing for or otherwise relating to any Indebtedness to, or
Guarantee by, Borrower or any of its Subsidiaries (other than Indebtedness
inadvertently omitted from that Schedule in an aggregate principal amount which
does not exceed $100,000) and the aggregate principal or face amount outstanding
as of the date hereof or which may become outstanding under each such
arrangement is correctly described in said SCHEDULE 4.19. Neither Borrower nor
its Subsidiaries has any such Indebtedness other than as set forth on SCHEDULE
4.19 or as permitted by Section 6.2 hereof.
4.20 EXISTING LIENS. SCHEDULE 4.20 hereto is a complete and
correct list, as of the date hereof, of each Lien existing on the date hereof
securing
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Indebtedness of Borrower or any of its Subsidiaries and the aggregate principal
amount of such Indebtedness secured by each such Lien is correctly described in
such SCHEDULE 4.20.
4.21 BROKER'S OR FINDER'S FEES. Except for fees to Xxx Xxxxx in
the amount of $300,000, no broker's or finder's fees or commissions have been
incurred or will be payable by Borrower or any of its Subsidiaries to any Person
in connection with the transactions to occur on the Closing Date or the date
hereof contemplated by this Agreement.
4.22 REGULATORY MATTERS. Neither Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, the
Federal Power Act, the Interstate Commerce Act or any other federal or state
statute or regulation which limits its ability to incur Indebtedness or its
ability to consummate the transactions contemplated hereby.
4.23 DISCLOSURE. Neither this Agreement nor any other instrument,
document, agreement, financial statement or certificate furnished to the
Administrative Agent, the Co-Agents or any Lender by or on behalf of Borrower or
any of its Subsidiaries in connection herewith contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
4.24 EMPLOYEE MATTERS. As of the date hereof, there is no strike
or work stoppage in existence or threatened against or by any employees of
Borrower or its Subsidiaries. As of each subsequent date, there is no strike or
work stoppage in existence involving fifteen percent or more of the total
workforce of Borrower and its Subsidiaries.
4.25 WITHHOLDING AND OTHER TAXES. Borrower and its Subsidiaries have
properly withheld and currently paid all applicable federal and state
unemployment taxes and other federal and state taxes payable with respect to
the income of their employees (including without limitation, all taxes and
other amounts withheld pursuant to their employees' IRS form W-4, all social
security, all Federal Insurance Contribution Act ("FICA") contributions and all
Federal Unemployment Tax Act contributions), and have currently paid all
workers compensation insurance, disability and insurance benefits properly
payable with respect to their employees, other than immaterial amounts not paid
through oversight and promptly corrected.
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4.26 DEPOSIT ACCOUNTS. Each deposit, brokerage or similar account
maintained by Borrower or its Subsidiaries is described on SCHEDULE 4.26 or has
been disclosed in writing to the Administrative Agent.
4.27 MATERIAL CONTRACTS. As of the date hereof, SCHEDULE 4.27
lists each material instrument, document and agreement to which Borrower or any
of its Subsidiaries are party to purchase or sell products having a value in
excess of $100,000 or calling for performance of services having a value in
excess of $100,000 per annum, other than routine purchase orders in the ordinary
course of the business of Borrower and its Subsidiaries.
5. AFFIRMATIVE COVENANTS
Borrower hereby covenants to the Administrative Agent, the
Co-Agents, the Issuing Lender and the Lenders that from and after the date
hereof, and until the termination of this Agreement in accordance with Section
2.7 hereof, unless the Majority Lenders otherwise consent in writing, Borrower
shall, and shall cause each of its Subsidiaries to:
5.1 RECORDS RESPECTING COLLATERAL; LOCKBOX OR BLOCKED ACCOUNT
ARRANGEMENTS. Keep all records with respect to the Collateral at its respective
office set forth on SCHEDULE 4.15 hereof and not remove such records from such
addresses without the prior written consent of the Co-Agents and, upon request
of the Co-Agents or the Majority Lenders, enter into such lockbox or blocked
account arrangement with respect to its deposit accounts and the collection of
the Accounts and execute and deliver such documents in connection therewith as
the Co-Agents or the Majority Lenders may reasonably require, provided that such
arrangements shall permit Borrower and its Subsidiaries to withdraw, direct the
disbursement of, and exercise sole dominion and control over, any and all of
their cash and Cash Equivalents except as otherwise directed by the
Administrative Agent (with the consent of the Majority Lenders) at any time when
an Event of Default has occurred and remains continuing, with any notice thereof
by the Administrative Agent to the depositary to be conclusive upon the
depositary.
5.2 REPORTING REQUIREMENTS. Furnish or cause to be furnished to the
Co-Agents and each Lender:
(a) As soon as practicable, and in any event within thirty days
after the end of each month (except in the case of December, with
respect to
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which forty five days shall be allowed), interim unaudited
consolidated and consolidating financial statements of Borrower and
its Subsidiaries, for Borrower and its consolidated Subsidiaries,
including a balance sheet, income statements and statements of cash
flow, for the month and year-to-date period then ended, prepared in
accordance with GAAP (subject to the absence of footnotes and year
end adjustments allowed by GAAP) and certified by the chief financial
officer of Borrower, together with a comparison of such financial
statements to budget and the financial statements for the prior year,
together with a narrative management discussion and analysis of such
financial results;
(b) Not later than May 20, 1998 (with respect to Borrower's
Fiscal Year 1997), and as soon as available, and in any event within
ninety days after the end of each subsequent Fiscal Year, audited
consolidated annual financial statements of Borrower and its
consolidated Subsidiaries, including consolidated balance sheets,
consolidated income statements and consolidated statements of cash
flow for the Fiscal Year then ended, prepared in accordance with
GAAP, in comparative form and accompanied by the unqualified opinion
of a nationally recognized firm of independent certified public
accountants retained by Borrower and its Subsidiaries;
(c) Together with the financial statements referred to in
clauses (a) and (b) above, (i) a compliance certificate of the chief
financial officer of Borrower, in substantially the form of Exhibit D
hereto (the "Compliance Certificate"), setting forth the calculations
for determining compliance with the financial covenants set forth in
Article 7 hereof and certifying that such calculations are true and
accurate and that no Default or Event of Default has occurred and is
continuing or, if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which
is proposed to be taken with respect thereto;
(d) Together with the financial statements described in clause
(a) above, a summary accounts receivable aging as of the date of such
financial statements, showing separately for Borrower and each
Subsidiary, in summary form, the aggregate dollar value of the
Accounts of each and indicating the aggregate value of the Accounts
that are past due and whether such Accounts are thirty, sixty or
ninety or more days past due and containing such other information
regarding such Accounts as the Co-Agents or the Majority Lenders may
request, all as of the last day of the preceding month (and, if
requested by either Co-Agent not more often than once each calendar
quarter, a full aging of accounts receivable by customer);
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(e) As soon as practicable, and in any event within thirty
days after the end of each calendar quarter, a report showing
profitability by each branch office of Borrower and its Subsidiaries;
(f) Within 15 days after the sending or filing thereof, as the
case may be, copies of any definitive proxy statements, financial
statements or reports which Borrower sends to its shareholders and
copies of any regular periodic and special reports or registration
statements which Borrower files with the Securities and Exchange
Commission (or any Governmental Authority substituted therefor),
including, but not limited to, all Form 10-K and Form 10-Q reports,
if any, or any report or registration statement which Borrower files
with any national securities exchange;
(g) At least fifteen Business Days prior to the time any
consent by the Majority Lenders or the Co-Agents will be necessary,
Borrower shall furnish to the Co-Agents and the Lenders all pertinent
information regarding any proposed Acquisition which is reasonably
necessary or appropriate to permit the Lenders to evaluate whether
such proposed is a Permitted Acquisition in a manner consistent with
prudent banking standards;
(h) At least fifteen days prior to the end of each Fiscal
Year, a consolidating budget and projection for the coming Fiscal
Year, in form and detail reasonably satisfactory to the
Administrative Agent;
(i) At least 10 days prior to the beginning of each Pricing
Period, a pricing certificate in a form reasonably acceptable to the
Administrative Agent setting forth the Senior Funded Debt to EBITDA
Ratio as of the immediately preceding Test Date; and
(j) Such other information respecting the condition or
operations, financial or otherwise, of Borrower and its Subsidiaries
as any the Lenders may from time to time reasonably request.
(k) As soon as practicable, and in any event within thirty
days after the end of each Fiscal Quarter, (a) a report of Earn-Out
payments theretofore made in Borrower's Fiscal Year to date, and (b)
updates to the projections delivered pursuant to clause (e) of the
definition of "Permitted Acquisition" showing the amount of Earn-Outs
reasonably projected to be payable by Borrower and its Subsidiaries
with respect to each Acquired Business. Each such projection and
calculation shall be certified by the chief
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financial officer of Borrower and shall be reasonably acceptable to
the Majority Lenders.
5.3 TAX RETURNS. File all federal, state and local tax returns
and other reports that Borrower and its Subsidiaries are required by law to
file, maintain adequate reserves for the payment of all taxes, assessments,
governmental charges and levies imposed upon its income, or its profits, or upon
any property belonging to it, and pay and discharge all such taxes, assessments,
governmental charges and levies prior to the date on which penalties attach
thereto, except where the same may be contested in good faith by appropriate
proceedings and for which adequate reserves have been established to the extent
required by GAAP.
5.4 COMPLIANCE WITH LAWS. Comply with all laws, statutes, rules,
regulations and ordinances of any Governmental Authority applicable to Borrower
or its Subsidiaries, including, without limitation, any such laws, statutes,
rules, regulations or ordinances regarding the collection, payment, and deposit
of employees' income, unemployment, and Social Security taxes and with respect
to pension liabilities, the violation of which may reasonably be expected to
have a Material Adverse Effect.
5.5 ENVIRONMENTAL LAWS. Comply with all Environmental Laws, the
violation of which may reasonably be expected to have a Material Adverse Effect,
and, in the event of any "release" or "threatened release" of any Hazardous
Substance onto, at or under the property of Borrower or any of its Subsidiaries
which requires or may require notification, response, assessment, investigation
or remedial action pursuant to any Environmental Law, notify the Lenders and all
appropriate Governmental Authorities thereof, and proceed with due diligence
and, at the cost and expense of Borrower or such Subsidiary, to respond
appropriately, in material compliance with the requirements of the Environmental
Laws.
5.6 ERISA. Cause itself and each of its ERISA Affiliates to:
(a) At all times make prompt payment of contributions
required to meet the minimum funding standards set forth in Sections
302 and 305 of ERISA with respect to each Plan and otherwise comply
with ERISA and all rules and regulations promulgated thereunder;
(b) Promptly after the occurrence thereof with respect to any
Plan, or any trust established thereunder, notify the Administrative
Agent and the Lenders of (i) a "reportable event" described in
Section 4043 of ERISA and
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the regulations issued from time to time thereunder (other than a
"reportable event" not subject to the provisions for 30-day notice to
the PBGC under such regulations), or (ii) any other event which could
subject Borrower or any ERISA Affiliate to any material tax, penalty
or liability under Title I or Title IV of ERISA or Chapter 43 of the
Code;
(c) At the same time and in the same manner as such notice
must be provided to the PBGC, or to a Plan participant, beneficiary
or alternative payee, give the Administrative Agent and the Lenders
any notice required under Section 101(d), 302(f)(4), 303, 307,
4041(b)(1)(A) or 4041(c)(1)(A) or ERISA or under Section 401(a)(29)
or 412 of the Code with respect to any Plan;
(d) Furnish to the Lenders, promptly upon the request of any
Lender, (i) true and complete copies of any and all documents,
government reports and determination or opinion letters for any Plan;
and (ii) a current statement of withdrawal liability, if any, for
each Multiemployer Plan; and
(e) Furnish to the Lenders, promptly upon the request of any
Lender therefor, such additional information concerning any Plan as
may be reasonably requested.
5.7 BOOKS AND RECORDS. Keep adequate records and books of account
with respect to its business activities in which proper entries are made in
accordance with GAAP reflecting all its financial transactions.
5.8 NOTIFICATIONS TO THE ADMINISTRATIVE AGENT, THE CO-AGENTS AND
THE LENDERS. Notify the Administrative Agent, the Co-Agents and the Lenders
promptly by telephone (with each such notice to be confirmed in writing within
ten Business Days): (a) upon any Senior Officer of Borrower or its Subsidiary
learning of any litigation affecting Borrower or any of its Subsidiaries
claiming damages of $500,000 or more, individually or when aggregated with other
litigation pending against Borrower or any of its Subsidiaries, in excess of the
amount covered by insurance, and of the threat or institution of any suit or
administrative proceeding against Borrower or any of its Subsidiaries which may
reasonably be expected to have a Material Adverse Effect (and, in any such event
Borrower and its Subsidiaries shall establish such reasonable reserves with
respect thereto as are required by GAAP); (b) upon occurrence thereof, of any
Default or Event of Default hereunder; (c) upon any Senior Officer of Borrower
or its Subsidiaries learning of the occurrence thereof, of any event or
condition which may reasonably be expected to have a Material
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Adverse Effect; and (d) upon any Senior Officer of Borrower or its Subsidiaries
learning of the occurrence thereof, of Borrower's or any of its Subsidiaries'
default under (i) any note, indenture, loan agreement, mortgage, lease, deed or
other similar agreement relating to any Indebtedness of Borrower or such
Subsidiary which is in an amount which is in excess of $100,000 or (ii) any
other instrument, document or agreement to which Borrower or any of its
Subsidiaries is a party or by which Borrower or any of its Subsidiaries or any
of their respective properties is bound, the default of which may reasonably be
expected to have a Material Adverse Effect.
5.9 INSURANCE.
(a) Keep all of its property insured by insurance companies
having A.M. Best ratings of not less than A- which are licensed to
do business in all jurisdictions in which the Collateral is located
against loss or damage by fire or other risk usually insured against
under extended coverage endorsement and theft, burglary, and
pilferage, together with such other hazards as the Majority Lenders
may reasonably from time to time request, in amounts satisfactory to
the Majority Lenders and naming the Administrative Agent, for the
benefit of the Administrative Agent, the Co-Agents and the Lenders,
as loss payee thereon pursuant to a loss payee clause satisfactory to
the Co-Agents;
(b) Maintain at all times liability insurance coverage against
such risks and in such amounts as are customarily maintained by
others in similar businesses, such insurance to be carried by
insurance companies having A.M. Best ratings of not less than A-
which are licensed to do business in the states in which Borrower and
its Subsidiaries conduct business, including without limitation
statutory limits of worker's compensation insurance including
employer's liability to the extent required by Applicable Law; and
(c) Deliver certificates of insurance for such policy or
policies to the Administrative Agent, containing endorsements, in
form satisfactory to the Lenders, providing that the insurance shall
not be cancelable, except upon thirty days' prior written notice to
the Administrative Agent. In the event of any termination or notice
of nonpayment by any insurer with respect to any policy or any lapse
in the coverage thereunder, Borrower shall cause such insurer to give
prompt written notice to the Administrative Agent of the occurrence
of such termination, nonpayment or lapse.
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5.10 MAINTENANCE OF INTELLECTUAL PROPERTY. Keep all General
Intangibles in full force and effect except where the failure to do so may not
reasonably be expected to have a Material Adverse Effect.
5.11 PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain
its corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified as a foreign corporation
in each instance to the extent necessary in view of its business and operations
or the ownership of its properties.
5.12 ADDITIONAL DOCUMENTS. Upon formation or Acquisition by
Borrower or any Subsidiary of Borrower of any new Subsidiary, deliver, or cause
to be delivered to the Administrative Agent, for the benefit of the
Administrative Agent, the Issuing Lender and the Lenders, each in form and
substance satisfactory to the Co-Agents, a Guarantee, Pledge and Security
Agreement and Drop-Down Note and Drop Down Note Pledge and Security Agreement
executed by such new Subsidiary, and 100% of the issued and outstanding capital
stock of such new Subsidiary in pledge to the Administrative Agent to secure the
Obligations, together with all other instruments, documents or agreements
reasonably necessary or desirable to create, evidence or perfect a lien on or
security interest in favor of the Administrative Agent, for the benefit of the
Administrative Agent, the Co-Agents, the Issuing Lender and the Lenders, in the
personal property assets of such new Subsidiary (and, where required by Section
5.14, the other assets thereof) and/or to reaffirm the Obligations of Borrower
and its Subsidiaries.
5.13 INSPECTION RIGHTS. Upon reasonable notice, at any time during
regular business hours and as often as requested (but not so as to materially
interfere with the business of Borrower and its Subsidiaries), permit the
Administrative Agent or any Lender, or any authorized employee, agent or
representative thereof (a) to examine, audit and make copies and abstracts from
the records and books of account of Borrower and its Subsidiaries, (b) to visit
and inspect the Properties of Borrower and its Subsidiaries, and (c) to discuss
the affairs, finances and accounts of Borrower and its Subsidiaries with any of
their officers, key employees, accountants and customers; and, upon request,
furnish promptly to the Administrative Agent or any Lender true copies of all
financial information made available to the senior management of Borrower.
5.14 ADDITIONAL COLLATERAL AND GUARANTEES. Upon the acquisition
after the Closing Date by Borrower and its Subsidiaries of any real property or
tangible
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personal property having an aggregate value in excess of $500,000 grant to the
Administrative Agent first priority Liens thereon upon request of the Majority
Lenders.
5.15 INTEREST HEDGE AGREEMENTS. On or prior to September 30, 1998,
Borrower shall enter into Interest Hedge Agreements reasonably acceptable to the
Administrative Agent covering not less than $11,000,000 of the principal
Indebtedness evidenced by this Agreement (as set forth in the Projections) for a
period of three years from such date, and against changes in market interest
rates of 150 basis points or more. Borrower hereby agrees it they shall provide
the Co-Agents with the identity of any proposed provider of any such Interest
Hedge Agreement and the price at which Borrower proposes to enter into such
Interest Hedge Agreement with that provider, and that it shall instead enter
into a similar Interest Hedge Agreement with the Co-Agents (at their option
ratably or with either willing Co-Agent) if the price proposed by the Co-Agents
or willing Co-Agent is not greater than that proposed by the alternative
provider.
6. NEGATIVE COVENANTS
Borrower hereby covenants with the Administrative Agent, the
Co-Agents, the Issuing Lender and the Lenders that from and after the date
hereof and until the termination of this Agreement in accordance with Section
2.7 hereof, without the prior written consent of the Majority Lenders, Borrower
shall not, and shall not permit any of its Subsidiaries to:
6.1 LIENS. Create, incur, assume, or suffer to exist any Lien of
any kind in any of the Collateral or their other assets other than Permitted
Liens, or grant any covenant to any Person prohibiting the granting of any Lien
in favor of the Administrative Agent and the Lenders, except:
(a) Purchase money Liens and Capital Lease Obligations with
respect to tangible personal property securing Indebtedness permitted
under Section 6.2(c); and
(b) Liens outstanding against tangible personal property
acquired in a Permitted Acquisition and not granted in contemplation
of the Acquisition securing Indebtedness permitted under Section
6.2(c).
6.2 INDEBTEDNESS AND EARN-OUTS. Incur, assume, or suffer to
exist any Indebtedness or Earn-Outs except for (a) the Obligations; (b)
Indebtedness existing on the Closing Date and listed on SCHEDULE 4.20 (or not so
listed out of inadvertence
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provided that the aggregate amount thereof does not exceed $100,000) and
refinancings thereof provided that the amount thereof does not exceed the amount
so refinanced; (c) Capital Lease Obligations in an amount which is not in excess
of $2,000,000, in aggregate, the incurrence of which does not cause a pro forma
violation of Sections 7.1 or 7.2, (d) other purchase money Indebtedness or
unsecured Indebtedness (including the amount of Projected Earn-Outs for all
Earn-Outs which are not subject to a Subordination Agreement) in an aggregate
principal amount which does not exceed $2,000,000; (e) Earn-Outs associated with
the acquisition by Borrower of NPS of Atlanta, Inc. and Intranational Computer
Consultants, Inc. (as described in the acquisition agreements therefor in
existence as of February 23, 1998, and March 2, 1998 but without any later
increase to such Earn-Outs), (f) Subordinated Obligations incurred when no
Default or Event of Default exists, and (g) Earn-Outs which are subject to
Subordination Agreements.
6.3 ASSET SALES. Sell, lease, transfer or otherwise dispose of any or
all of the Collateral or any interest therein or any of their other assets other
than (a) the sale of Inventory in the ordinary course of business; (b) the sale
of Cash Equivalents in the ordinary course of business, and (c) the sale of
other assets having an aggregate value in excess of $1,000,000 during any Fiscal
Year.
6.4 GUARANTIES. Guarantee the obligations of any other Person (other
than the obligations of Borrower or any of its wholly-owned Subsidiaries) except
by endorsement of negotiable instruments for deposit or collection and similar
transactions in the ordinary course of business.
6.5 INVESTMENTS AND ACQUISITIONS. Make or suffer to exist any
Investment or Acquisitions except:
(a) Investments existing as of the date hereof and disclosed on
SCHEDULE 4.19;
(b) Investments in Subsidiaries made pursuant to the Drop-Down
Notes;
(c) Permitted Acquisitions;
(d) Interest Hedge Agreements with respect to the Obligations;
(e) other Investments which do not exceed $2,000,000, in the
aggregate, outstanding at any time; and
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(f) Investments in Cash Equivalents.
6.6 PROHIBITION OF FUNDAMENTAL CHANGES. Enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution) or make any substantial change
in the basic type of business conducted by Borrower and its Subsidiaries as of
the date hereof except that:
(a) Borrower or any of its Subsidiaries may merge or consolidate
with any Person to consummate any Permitted Acquisition permitted by
Section 6.5 hereof, provided, however, that (i) Borrower or such Subsidiary
is the corporation surviving such merger or consolidation and (ii) there
then exists no Default or Event of Default nor any event or conditions
which, with the consummation of such merger, would constitute a Default or
Event of Default.
(b) any Subsidiary of Borrower may be merged or consolidated with
or into: (i) Borrower if Borrower shall be the continuing or surviving
corporation; or (ii) any other Person to consummate an Acquisition
permitted by Section 6.5 hereof, provided that, after giving effect to such
merger or consolidation, the Person surviving the merger or consolidation
is a wholly-owned Subsidiary of Borrower; or (iii) any other Subsidiary;
provided that if any such transaction shall be between a Subsidiary and a
wholly-owned Subsidiary, the wholly-owned Subsidiary shall be the
continuing or surviving corporation.
6.7 FISCAL YEAR. Change its fiscal year end from December 31, unless
(a) as promptly as practicable and in any event at least 30 days prior to such
change, Borrower provides written notice of such change to the Lenders, and (b)
Borrower, with the consent of all of the Lenders, enters into such amendments
hereto as the Majority Lenders reasonably request to accommodate such change
prior to the effective date thereof.
6.8 ERISA.
(a) At any time, maintain, or be or become obligated to
contribute on behalf of its employees to, any "employee pension benefit
plan" that is subject to Title IV of ERISA other than those Plans disclosed
in SCHEDULE 4.11 and Multiemployer Plans to which Borrower or any of its
Subsidiaries becomes
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obligated to contribute pursuant to the terms of a collective bargaining
agreement.
(b) At any time, permit any Plan to:
(i) engage in any non-exempt "prohibited transaction", as
such term is defined in Section 4975 of the Code;
(ii) incur any material "accumulated funding deficiency", as
that term is defined in Section 302 of ERISA; or
(iii) suffer a Termination Event to occur which may reasonably
be expected to result in liability of Borrower or any ERISA Affiliate
thereof to the Plan or to the PBGC or the imposition of a Lien on the
property of Borrower or any ERISA Affiliate thereof pursuant to Section
4068 of ERISA.
(c) Fail, upon a Senior Officer of Borrower becoming aware thereof,
promptly to notify the Administrative Agent of the occurrence of any
"reportable event" (as defined in Section 4043 of ERISA) or of any
non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code) with respect to any Plan described in SCHEDULE 4.11 or any trust
created thereunder.
(d) At any time, permit any Plan described in SCHEDULE 4.11 to fail to
comply with ERISA or other Applicable Laws in any respect that could result
in a significant liability to Borrower or any of its Subsidiaries.
6.9 RELOCATIONS; USE OF NAME. Relocate its executive offices, open
new places of business or relocate existing places of business, maintain any
Collateral or records with respect to Collateral at any other locations than
those locations presently kept or maintained, as set forth on SCHEDULE 4.15
hereto, or use any corporate name (other than its own) or any fictitious name
except, in each case, upon thirty days prior written notice to the
Administrative Agent and after the delivery to the Administrative Agent of
financing statements in form satisfactory to the Majority Lenders.
6.10 ARM'S-LENGTH TRANSACTIONS. Enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or the rendering
of any service or the payment of management or other service fees, with any
Affiliate except in the ordinary course of and pursuant to the reasonable
requirements
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of Borrower's or such Subsidiary's business and upon fair and reasonable terms
which are fully disclosed to the Administrative Agent, the Co-Agents and the
Lenders in writing and which are no less favorable to Borrower and its
Subsidiaries than those which would prevail in a comparable arm's-length
transaction with a Person not an Affiliate.
6.11 HOSTILE TENDER OFFERS. Make any offer to purchase or acquire, or
consummate a purchase or acquisition of, 5% or more of the Capital Stock of any
corporation or other business entity if the board of directors or management of
such corporation or business entity has notified Borrower or its Subsidiaries
that it opposes such offer or purchase.
6.12 PURE HOLDING COMPANY. Permit Borrower to own any material Property
other than the Capital Stock of its Subsidiaries, the Drop-Down Notes, other
passive Investments, and other immaterial assets not associated with the conduct
of an operating business.
6.13 ISSUANCE OF SUBORDINATED OBLIGATIONS AND EARN-OUTS. Fail to
provide to the Lenders, not less than 15 Business Days prior to (a) the issuance
of any Subordinated Obligations which will or may require any cash payment of
principal or interest prior to the Maturity Date (including any Earn-Outs which
are contractually subordinated to the Obligations pursuant to a Subordination
Agreement (or in another manner acceptable to the Majority Lenders)), (b) any
amendment to any such Subordinated Obligations providing for any such payments,
and (c) entering into any agreement to acquire an Acquired Business which
provides for an Earn-Out, an analysis and projection demonstrating, to the
reasonable satisfaction of the Majority Lenders that, giving effect to the
acquisition of the Acquired Business and to any cash payments which are
reasonably projected to be made prior to the Maturity Date with respect to such
Subordinated Obligations, Borrower will be projected, as of that date, remain in
compliance with the financial covenants set forth in Sections 7.1, 7.2 and 7.3
for the remaining term of this Agreement. It is understood that any such
projections will be subject to the uncertainty inherent in all financial
forecasts, and will not constitute a representation or warranty that the results
and other matters projected therein will in fact be achieved.
6.14 EARN-OUTS. Enter into any agreement providing for any Earn-Out
with respect to any Acquired Business other than:
(a) the Earn-Outs provided for in the NPS and ICC transactions
referred to in with Section 6.2(e);
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(b) other Earn-Outs, for which the related Projected Earn-Out amount
of which is permitted under Section 6.2(d); and
(c) Earn-Outs which are subject to a Subordination Agreement.
Each agreement providing for the payment of an Earn-Out shall provide for the
payment thereof not more frequently than quarterly.
7. FINANCIAL COVENANTS
Borrower hereby covenants with the Administrative Agent, the Co-Agents,
the Issuing Lender and the Lenders that from and after the date hereof and
until the termination of this Agreement in accordance with Section 2.7 hereof
unless the Majority Lenders otherwise consent in writing, that Borrower shall
not, and shall not permit any of its Subsidiaries to:
7.1 SENIOR FUNDED DEBT TO EBITDA. Permit the Senior Funded Debt to
EBITDA Ratio, as of the last day of any calendar month occurring during a period
set forth below, to be greater than the ratio set forth opposite that period:
Period Maximum Ratio
------ -------------
Closing Date through
December 31, 1998 4.00:1.00
Thereafter 3.50:1.00
7.2 TOTAL FUNDED DEBT TO EBITDA. Permit the Total Funded Debt to
EBITDA Ratio, as of the last day of any calendar month occurring during a period
set forth below, to be greater than the ratio set forth opposite that period:
Period Maximum Ratio
------ -------------
Closing Date through
December 31, 1998 5.50:1.00
January 1, 1999 through
December 31, 1999 5.00:1.00
January 1, 2000 through
December 31, 2000 4.75:1.00
Thereafter 4.50:1.00
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7.3 INTEREST COVERAGE RATIO. Permit the Interest Coverage Ratio as of
the last day of any calendar month ending during a period set forth below, to be
less than the ratio set forth opposite that period:
Period Maximum Ratio
------ -------------
Closing Date through
December 31, 1999 2.00:1.00
Thereafter 2.25:1.00
7.4 DIVIDENDS AND MANAGEMENT FEES.
(a) Declare or pay any dividends on, or make any distribution with respect
to, the shares of any class of their Capital Stock, or purchase, redeem,
acquire, defease or retire any shares of their Capital Stock, or take any action
having an effect equivalent to the foregoing except that any Subsidiary of
Borrower may declare and pay dividends to Borrower, and the Borrower may make
payments on Subordinated Obligations if such payments are permitted at that time
under the governing Subordination Agreement;
(b) Pay any Management Fees, except for Management Fees paid to Xxxxxxx X.
Xxxxx & Sons, LLC and Mellon Ventures, Inc. pursuant to the Management Agreement
in equal installments on the last day of each Fiscal Quarter and when no Default
or Event of Default exists in an aggregate amount which do not exceed $500,000
during any twelve month fiscal period, provided that, if so directed by the
Majority Lenders at any time when any Default or Event of Default has occurred
and remains continuing (or would result from the payment thereof), Borrower and
its Subsidiaries shall immediately cease making payments of any Management Fees
(but may resume the making of such payments when no Default or Event of Default
continues to exist); and
(c) The Merger Distributions and repurchases of common stock of Borrower
from employees in connection with the termination of the employment relationship
in an aggregate amount not to exceed $1,000,000 in any Fiscal Year or $3,000,000
during the term of this Agreement.
7.5 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS. (a) Make any voluntary or optional payment or prepayment on or
with respect to any Indebtedness permitted by Section 6.2 (other than
Indebtedness
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permitted by Section 6.2(a)) or (b) amend or modify, or permit the amendment or
modification of, any provision of any Indebtedness permitted by Section 6.2
(other than Indebtedness permitted by Section 6.2(a)) or of any agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) relating to any of the foregoing, provided that
this Section shall not prohibit the making of any payments with respect to
Subordinated Obligations which are permitted by the related Subordination
Agreement.
8. EVENTS OF DEFAULT
The occurrence of any of the following events or conditions shall
constitute an Event of Default hereunder:
8.1 OBLIGATIONS. Borrower or any of its Subsidiaries shall fail to
pay (a) any principal amount of the Loans or any amount reimbursable with
respect to any of the Letters of Credit, when due, or (b) any interest, fees or
other amounts due and owing under this Agreement or the other Loan Documents or
with respect to any other Obligation, whether in respect of principal, interest,
fees or otherwise, including without limitation the fees specified in the Fee
Letter, within two Business Days following the date when due.
8.2 MISREPRESENTATIONS. Borrower or any of its Subsidiaries shall
make any representation or warranty in this Agreement or any of the other Loan
Documents or in any certificate or statement furnished at any time hereunder or
in connection with this Agreement or any of the other Loan Documents which
proves to have been untrue or misleading in any material respect when made or
furnished and which continues to be untrue or misleading in any material
respect.
8.3 CERTAIN COVENANTS. Borrower or any of its Subsidiaries shall
default in the observance or performance of any covenant in Article 5 hereof
(other than Section 5.8) applicable to Borrower or such Subsidiary and such
default continues for thirty days after notice thereof.
8.4 OTHER COVENANTS. Borrower or any of its Subsidiaries shall
default in the observance or performance of any other covenant applicable to
Borrower or such Subsidiary under this Agreement or any of the other Loan
Documents.
8.5 OTHER DEBTS. (a) Borrower or any of its Subsidiaries shall fail
to pay any principal of or premium or interest on any of its Indebtedness in an
aggregate amount which is not less than $500,000 when the same becomes due and
payable
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(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace or cure
period, if any, specified in the agreement, mortgage, indenture or instrument
relating to such Indebtedness; or (b) any other event shall occur or condition
shall exist under any agreement, mortgage, indenture or instrument relating to
any such Indebtedness and shall continue after the applicable grace or cure
period, if any, specified in such agreement, mortgage, indenture or instrument,
if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or (c) any such Indebtedness
shall be accelerated or otherwise declared to be due and payable prior to the
stated maturity thereof, or (d) any such Indebtedness shall be required to be
prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to repay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof.
8.6 TAX LIEN. A notice of Lien, levy or assessment is filed of record
with respect to all or any assets of Borrower or any of its Subsidiaries by the
United States or any other Governmental Authority in an amount exceeding
$100,000, including, without limitation, the PBGC, which adversely affects the
priority of the Liens granted to the Administrative Agent hereunder or under any
of the other Loan Documents.
8.7 ERISA. The occurrence of a Termination Event with respect to any
Plan if the aggregate liability of Borrower or any of its ERISA Affiliates
under ERISA as a result thereof exceeds $100,000; or the complete or partial
withdrawal by Borrower or any of its ERISA Affiliates from any Multiemployer
Plan if the aggregate liability of Borrower or any of its ERISA Affiliates as a
result thereof exceeds $100,000.
8.8 VOLUNTARY BANKRUPTCY. Borrower or any of its Subsidiaries shall:
(a) file a voluntary petition or assignment in bankruptcy or a voluntary
petition or assignment or answer seeking liquidation, reorganization,
arrangement, readjustment of its debts, or any other relief under the Bankruptcy
Code, or under any other act or law pertaining to insolvency or debtor relief,
whether State, Federal, or foreign, now or hereafter existing; (b) enter into
any agreement indicating consent to, approval of, or acquiescence in, any such
petition or proceeding; (c) apply for or permit the appointment, by consent or
acquiescence, of a receiver, custodian or trustee of itself or themselves or for
all or a substantial part of its or their property; (d) make an assignment for
the benefit of creditors; or (e) admit in writing its or their inability or
failure to pay its or their debts generally as such debts become due.
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8.9 INVOLUNTARY BANKRUPTCY. There occurs (a) a filing or issuance
against Borrower or any of its Subsidiaries of an involuntary petition in
bankruptcy or seeking liquidation of Borrower or such Subsidiary,
reorganization, arrangement, readjustment of its or their debts or any other
relief under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether State, Federal or foreign, now or hereafter
existing and either such proceeding shall continue in effect for a period of
sixty days or an order for relief against Borrower or any of its Subsidiaries
shall be entered therein; (b) the involuntary appointment of a receiver,
liquidator, custodian, or trustee of Borrower or any of its Subsidiaries or for
all or a substantial part of its or their property which remains undischarged or
undismissed for a period of sixty days; or (c) the issuance of a warrant of
attachment, execution or similar process against all or any substantial part of
the property of Borrower or any of its Subsidiaries, which is not released,
vacated or fully bonded for a period of sixty days.
8.10 SUSPENSION OF BUSINESS. The suspension of the transaction of the
usual business of Borrower or any of its Subsidiaries or the dissolution of
Borrower or any of its Subsidiaries.
8.11 JUDGMENTS. Any judgment, decree or order for the payment of money
which, when aggregated with all other judgments, decrees or orders for the
payment of money pending against Borrower or any of its Subsidiaries exceeds the
sum of $100,000, shall be rendered against Borrower or any of its Subsidiaries
and remain unsatisfied and in effect for a period of sixty consecutive days or
more without being vacated, discharged, satisfied or stayed or bonded pending
appeal.
8.12 FAILURE OF SECURITY. At any time (a) Liens in favor of the
Administrative Agent contemplated by the Loan Documents shall, at any time, for
any reason (except by reason of an affirmative act or omission of the
Administrative Agent), be invalidated or otherwise cease to be in full force and
effect with respect to any Collateral having an aggregate value in excess of
$500,000; (b) Liens on Collateral having an aggregate value in excess of
$500,000 shall be subordinated or shall not have the priority contemplated by
this Agreement or the other Loan Documents; or (c) Borrower or any other Loan
Party under any such Loan Document asserts in writing that it is not bound by
the terms of the Loan Documents to which it is a party or otherwise repudiates
the same in writing.
8.13 GUARANTY. At any time, for any reason other than the consent of
the Lenders, any guaranty of the Obligations ceases to be in full force and
effect in any
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material respect or the guarantor thereunder repudiates its obligations
thereunder in writing.
8.14 MANAGEMENT. Less than two of Xxxxxxx X. Xxxxxxxxx, Xxxxxxx X.
Xxxxxxxxx, Xxxxx X. Xxxxx, T. Xxxxx XxXxxxxxx, X. Xxxxxxxx Xxxxxxxxx and Xxxxxx
Xxxxxx (or other persons reasonably acceptable to the Majority Lenders) continue
to be actively involved in a senior management capacity with Borrower and its
Subsidiaries.
8.15 CHANGE OF CONTROL. Any of the following occur: (a) a Person or
"group" (within the meaning of the Securities Exchange Act of 1934), other than
the Persons owning interests in Borrower as of the Closing Date, acquires or
obtains beneficial owners of securities (including options) of Borrower
representing a majority of the ordinary voting power of Borrower, or (b) there
shall occur a change in the composition of the Board of Directors of Borrower
such that the current directors (or directors designated or approved by such
directors or directors approved by such directors) do not constitute a majority
of the Board of Directors of Borrower in office at any time, or (c) Xxxxxxx X.
Xxxxx & Sons, LLC and Mellon Ventures, Inc. (or their Affiliates), shall fail to
collectively own, directly or indirectly, beneficially and of record, and
control the power to vote, at least 50% of the Capital Stock of Borrower owned
by them as of the Closing Date (and any shares of Capital Stock issued to them
by reason of such ownership), unless Borrower has previously consummated an
initial public offering of its stock which yields net proceeds to Borrower or
not less than $20,000,000.
9. REMEDIES
Upon the occurrence or existence of any Event of Default, and during
the continuation thereof, without prejudice to the rights of the Administrative
Agent, the Issuing Lender, the Co-Agents or the Lenders to enforce their claims
against Borrower for damages for failure by Borrower to fulfill any of the
Obligations hereunder, the Administrative Agent, the Co-Agents, the Issuing
Lender and the Lenders shall have the following rights and remedies, in addition
to any other rights and remedies available to the Administrative Agent, the
Issuing Lender, the Co-Agents and the Lenders at law, in equity or otherwise:
9.1 DEFAULT RATE. At the election of the Majority Lenders, evidenced
by written notice to Borrower, the outstanding principal balance of the
Obligations, and to the extent permitted by Applicable Law, accrued and unpaid
interest thereon, shall bear interest at the Default Rate until paid in full.
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9.2 TERMINATION; ACCELERATION OF THE OBLIGATIONS. In the event of an
Event of Default set forth in Sections 8.8 or 8.9 hereof, the Commitment shall
automatically and immediately terminate and in the event of any other Event of
Default, the Majority Lenders, at their option, may terminate the Commitment,
whereupon in either case all of the Obligations shall become immediately due and
payable, without presentment, demand, protest, notice of non-payment or any
other notice required by law relative thereto, all of which are hereby expressly
waived by Borrower, anything contained herein to the contrary notwithstanding.
9.3 SET-OFF. The right of each Lender to set-off, without notice to
Borrower or any of its Subsidiaries, any and all deposits at any time credited
by or due from such Lender to Borrower or any of its Subsidiaries, whether in a
general or special, time or demand, final or provisional account or any other
account or represented by a certificate of deposit and whether or not unmatured
or contingent against any or all of the Obligations of Borrower or such
Subsidiary, now existing or hereafter arising, whether or not such Lender shall
have made any demand under this Agreement or any of the Loan Documents.
9.4 RIGHTS AND REMEDIES OF A SECURED PARTY. All of the rights and
remedies of a secured party under the UCC or under other Applicable Law, all of
which rights and remedies shall be cumulative and none of which shall be
exclusive, to the extent permitted by law, in addition to any other rights and
remedies contained in this Agreement, and in any of the other Loan Documents.
9.5 TAKE POSSESSION OF COLLATERAL. The right of the Administrative
Agent to (a) enter upon the premises of Borrower or any of its Subsidiaries, or
any other place or places where the Collateral is located and kept through
self-help and without judicial process, without first obtaining a final judgment
or giving Borrower or its Subsidiaries notice and opportunity for a hearing on
the validity of the Administrative Agent's, the Issuing Lender's the Co-Agents'
or the Lenders' claim and without any obligation to pay rent to Borrower or any
of its Subsidiaries, and remove the Collateral therefrom to the premises of the
Administrative Agent or any agent of the Administrative Agent, for such time as
the Administrative Agent may desire, in order to effectively collect or
liquidate the Collateral; and/or (b) require Borrower and its Subsidiaries to
assemble the Collateral and make it available to the Administrative Agent at a
place to be designated by the Administrative Agent, in its sole discretion.
9.6 SALE OF COLLATERAL. The right of the Administrative Agent to sell
or to otherwise dispose of all or any of the Collateral, at public or private
sale or sales,
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with such notice as may be required by Applicable Law, in lots or in bulk, for
cash or on credit, all as the Administrative Agent (acting with the approval of
the Majority Lenders), in its sole discretion, may deem advisable, and subject
to Applicable Law. Such sales may be adjourned from time to time with or
without notice. The Administrative Agent shall have the right to conduct such
sales on the premises of Borrower or any of its Subsidiaries or elsewhere and
shall have the right to use the premises of Borrower or any of its Subsidiaries,
without charge for such sales for such time or times as the Administrative Agent
may see fit. The Administrative Agent is hereby granted a license or other
right to use, without charge, the labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks, service marks and advertising
matter, or any property of a similar nature, whether owned by Borrower and its
Subsidiaries or with respect to which Borrower or any of its Subsidiaries has
rights under license, sublicense or other agreements, as it pertains to the
Collateral, in preparing for sale (including, without limitation, finishing any
unfinished Inventory), advertising for sale and selling any Collateral and the
rights of Borrower and its Subsidiaries under all licenses and all franchise
agreements shall inure to the benefit of the Administrative Agent, the Issuing
Lender, the Co-Agents and the Lenders. The Administrative Agent shall have the
right to sell, lease or otherwise dispose of the Collateral, or any part
thereof, for cash, credit or any combination thereof, and the Administrative
Agent may purchase all or any part of the Collateral at public or, if permitted
by law, private sale and, if permitted by law in lieu of actual payment of such
purchase price, may set off the amount of such price against the Obligations.
The proceeds realized from the sale of any Collateral shall be applied first to
the reasonable costs and expenses and reasonable attorneys' fees and expenses
incurred by the Administrative Agent and the Co-Agents, to the extent not
duplicative, for collection and for acquisition, completion, protection,
removal, storage, sale and delivery of the Collateral; second to interest due
upon any of the Obligations; and third to the principal of the Obligations. Any
remaining proceeds shall be remitted to Borrower or other Person legally
entitled thereto. If any deficiency shall arise, Borrower shall remain liable
to the Issuing Lender and the Lenders therefor.
9.7 JUDICIAL PROCEEDINGS. The right to proceed by an action or
actions at law or in equity to obtain possession of the Collateral, to recover
the Obligations and amounts secured hereunder or to foreclose under this
Agreement and the other Loan Documents and sell the Collateral or any portion
thereof, pursuant to a judgment or decree of a court or courts of competent
jurisdiction, all without the necessity of posting any bond.
9.8 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT. If any
Event of Default shall have occurred and be continuing, the Issuing Lender may,
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irrespective of whether the Administrative Agent, the Co-Agents or the Lenders
are taking any of the other actions described in this Article 9 or otherwise,
make demand upon Borrower to, and forthwith upon such demand Borrower will, pay
to the Issuing Lender in accordance with Section 2.8, for deposit in a cash
collateral account, an amount equal to the aggregate face amount of all Letters
of Credit then outstanding. If at any time the Issuing Lender determines that
any funds held in any such cash collateral account are subject to any right or
claim of any Person other than the Issuing Lender in a manner which may
reasonably be expected to require the Issuing Lender to release any such funds
to such a Person or that the total amount of such funds is less than the
aggregate face amount of all Letters of Credit, Borrower will, forthwith upon
demand by the Issuing Lender, pay to the Issuing Lender, as additional funds to
be deposited and held in such cash collateral account, an amount equal to the
excess of (a) such aggregate face amount of all outstanding Letters of Credit
over (b) the total amount of funds, if any, then held in such cash collateral
account that the Issuing Lender determines to be free and clear of any such
right and claim. The Issuing Lender shall promptly account to Borrower for any
excess cash collateral provided under this Section, but shall in no account be
obligated to return funds to Borrower while any of the Obligations (other than
contingent obligations as to which no enforceable demand for payment has been
issued) have not been fully and finally paid in cash.
9.9 NOTICE. Any notice required to be given by the Administrative
Agent of a sale, lease, or other disposition of the Collateral or any other
intended action by the Administrative Agent, the Issuing Lender, the Co-Agents,
or a Lender, given to Borrower in the manner set forth in Section 12.7 below, at
least ten (10) days prior to such proposed action, shall constitute commercially
reasonable and fair notice thereof to Borrower.
9.10 APPOINTMENT OF THE ADMINISTRATIVE AGENT AS BORROWER'S LAWFUL
ATTORNEY. Borrower irrevocably designates, makes, constitutes and appoints the
Administrative Agent (and all Persons designated by the Administrative Agent) as
the true and lawful attorney of Borrower and the Administrative Agent or the
Administrative Agent's agent, may, without notice to Borrower and at such time
or times following an Event of Default as the Administrative Agent or said
agent, in its sole discretion, may determine, in the name of Borrower or in the
Administrative Agent's name: (a) demand payment of the Accounts; (b) enforce
payment of the Accounts, by legal proceedings or otherwise; (c) exercise all of
the rights and remedies of Borrower with respect to the collection of the
Accounts; (d) settle, adjust, compromise, extend or renew the Accounts; (e)
settle, adjust or compromise any legal proceedings brought to collect the
Accounts; (f) notify the postal authorities to change
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the address and delivery of mail addressed to Borrower to such address as the
Administrative Agent may designate; (g) if permitted by Applicable Law, sell or
assign the Accounts upon such terms, for such amounts and at such time or times
as the Administrative Agent deems advisable; (h) discharge and release the
Accounts; (i) take control, in any manner, of any item of payment or proceeds on
the Accounts; (j) prepare, file and sign the names of Borrower on a Proof of
Claim in Bankruptcy or similar document against any Account Debtor; (k) prepare,
file and sign the names of Borrower on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the Accounts; (l) do
all acts and things necessary, in the Administrative Agent's sole discretion, to
fulfill the obligations of Borrower under this Agreement; (m) endorse the name
of Borrower upon any of the items of payment or proceeds on any Account, and
deposit the same to the account of the Lenders on account of the Obligations;
(n) endorse the name of Borrower upon any chattel paper, document, instrument,
invoice, freight xxxx, xxxx of lading or similar document or agreement relating
to the Accounts or Inventory; (o) use the stationery of Borrower and sign the
name of Borrower to verifications of the Accounts and notices thereof to Account
Debtors; and (p) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the Accounts
and Inventory to which Borrower or its Subsidiaries have access.
10. CONDITIONS PRECEDENT
10.1 CONDITIONS PRECEDENT. The effectiveness of this Agreement shall
be subject to the fulfillment of each of the following conditions precedent:
(a) Litigation. No action, suit, litigation, proceeding,
investigation, regulation or legislation, including, but not limited to,
any arising under the Environmental Laws, shall have been instituted,
threatened or proposed before any court, governmental agency or legislative
body which seeks to enjoin, restrain, or prohibit, or to obtain substantial
damages in respect of, or which is related to or arises out of this
Agreement or the making of any Loan hereunder; or if decided adversely to
Borrower or any of its Subsidiaries may reasonably be expected to result in
a Material Adverse Effect.
(b) Fees to Societe Generale. Borrower shall have paid to
Societe Generale a fee in the amount set forth in a letter agreement with
Societe Generale;
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(c) Default; Material Adverse Effect. No Default or Event of
Default shall have occurred and remain continuing, and no Material Adverse
Effect shall have occurred since December 31, 1997.
(d) Documentation. The Administrative Agent, the Co-Agents and
the Lenders shall have received the following documents, each dated the
date hereof (unless otherwise specified), each duly executed and delivered
to the Administrative Agent, the Co-Agents and the Lenders, and each to be
satisfactory in form and substance to the Lenders and their respective
counsel:
(i) this Agreement;
(ii) replacement Notes in favor of each Lender;
(iii) Drop Down Notes in the principal amount of $75,000,000
and amendments to the Drop-Down Note Security Agreements in a form
acceptable to the Lenders;
(iv) written consents hereto executed by (a) Xxxxxxx X. Xxxxx
& Sons LLC and Mellon Ventures, Inc., (b) X. Xxxxxxxx Xxxxxxxxx and T.
Xxxxx XxXxxxxxx, and (c) each Subsidiary of Borrower;
(v) Borrower, each of the Subsidiaries of Borrower, and each
Lender shall have entered into an Omnibus Amendment Agreement to the
Loan Documents entered into by the Subsidiaries of Borrower;
(vi) deposit account agreements among Borrower, each of its
Subsidiaries and each of the depositary banks described on SCHEDULE
4.26 in form and substance acceptable to the Co-Agents, but in any
event in conformity with Section 5.1 (provided that it is understood
that any not delivered as of the date hereof shall be obtained by
Borrower within 30 days following the date hereof);
(vii) a certificate signed by the President or chief financial
officer of Borrower certifying that (A) the representations and
warranties set forth in Article 4 hereof are true and correct in all
respects on and as of such date with the same effect as though made on
and as of such date; (B) Borrower is are on such date in compliance
with all the terms and conditions set forth in this Agreement on its
part to be
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observed and performed; and (C) on the date hereof, after giving effect
to the making of the initial Loan, no Default or Event of Default has
occurred or is continuing;
(viii) legal opinions acceptable to the Lenders from counsel to
Borrower;
(ix) Certificates of the Secretary of Borrower and each of
its Subsidiaries certifying that attached thereto is a true and
complete copy of Resolutions adopted by the Board of Directors of such
Person authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents to which that Person is party;
and
(x) such other documents, instruments and agreements with
respect to the transactions contemplated by this Agreement, in each
case in such form and containing such additional terms and conditions
as may be satisfactory to the Lenders, containing, without limitation,
representations and warranties which are customary and usual in such
documents.
10.2 ALL LOANS AND LETTERS OF CREDIT. The obligation of each Lender to
make any Loan hereunder (including the initial Loan) and the obligation of the
Issuing Lender to issue any Letter of Credit (including the initial Letter of
Credit) shall be subject to fulfillment of the following conditions:
(a) Leverage Limitations. Giving pro forma effect to the
outstanding Obligations (including the requested Loan or Letter of Credit)
in the numerator thereof, the Senior Funded Debt to EBITDA Ratio and the
Total Funded Debt to EBITDA Ratio (determined on the basis of Adjusted
Company EBITDA for the most recent twelve month fiscal period for which
financial information is then required to have been delivered to the
Lenders) shall not be in excess of the applicable limits therefor set forth
in Section 7.1 and 7.2, respectively.
(b) No Injunction. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any Governmental Authority to enjoin, restrain, or
prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of this Agreement, the other Loan Documents, such
Loan or such Letter of Credit
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which in the sole discretion of the Majority Lenders, would make it
inadvisable to make such Loan or such Letter of Credit;
(c) No Material Adverse Effect. Since the date hereof, no
Material Adverse Effect shall have occurred.
(d) Solvency. The Lenders and the Co-Agents shall be satisfied
that, giving effect to the making of such Loan, or the issuance of such
Letter of Credit, Borrower and each of its Subsidiaries will be Solvent.
(e) No Default or Event of Default. There shall exist no
Default or Event of Default or any event or condition which, with the making
of such Loan or the issuance of such Letter of Credit, would constitute a
Default or Event of Default.
(f) Representations and Warranties. All representations and
warranties hereunder and under the other Loan Documents shall be true and
correct in all respects as of the date of such Loan or Letter of Credit
with the same force and effect as if made on and as of such date, with the
exception of those which expressly relate to a specific date.
11. THE AGENT
11.1 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder with such powers as are specifically delegated to the Administrative
Agent by the terms of this Agreement and the Loan Documents, together with such
other powers as are reasonably incidental thereto. The Administrative Agent
(which term as used in this sentence and in Section 11.5 hereof and the first
sentence of Section 11.6 hereof shall include reference to its Affiliates and
its own and its Affiliates' officers, directors, employees and agents): (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement, and shall not by reason of this Agreement be a trustee for any
Lender; (b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or any of
the other Loan Documents, or in any certificate or other instrument, document or
agreement referred to or provided for in, or received by any of them under, this
Agreement or any of the other Loan Documents, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note or any of the other Loan Documents or for any failure by Borrower or any
other Person to perform any of its obligations hereunder or thereunder; (c)
subject to Section 11.3
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hereof, shall not be required to initiate or conduct any litigation or
collection proceedings hereunder; and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other
agreement, document or instrument referred to or provided for herein or in
connection herewith, except for its own gross negligence or willful misconduct.
The Administrative Agent may employ agents and attorneys-in-fact selected by it
in good faith. The Administrative Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the
Administrative Agent receives a written notice of the assignment or transfer
complying with the terms and conditions of Section 12.3 hereof.
11.2 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, facsimile, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by this
Agreement, the Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Majority Lenders (unless the instructions of or consent of all of
the Lenders is required hereunder), and such instructions and any action taken
or failure to act pursuant thereto shall be binding on all of the Lenders;
provided, however, the Administrative Agent shall not be required to take any
action which (a) the Administrative Agent reasonably believes will expose it to
personal liability unless the Administrative Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or (b) is
contrary to this Agreement, the Notes, the other Loan Documents or Applicable
Law.
Without limitation on the foregoing, the Administrative Agent and its
directors, officers, agents, employees and attorneys:
(a) May treat the payee of any Note as the holder thereof until the
Administrative Agent receives notice of the assignment or transfer thereof,
in form satisfactory to the Administrative Agent, signed by the payee, and
may treat each Lender as the owner of that Lender's interest in the
Obligations for all purposes of this Agreement until the Administrative
Agent receives notice of the assignment or transfer thereof, in form
satisfactory to the Administrative Agent, signed by that Lender.
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(b) May consult with legal counsel (including in-house legal counsel),
accountants (including in-house accountants) and other professionals or
experts selected by it, or with legal counsel, accountants or other
professionals or experts for Borrower or the Lenders, and shall not be
liable for any action taken or not taken by it in good faith in accordance
with any advice of such legal counsel, accountants or other professionals
or experts.
(c) Shall not be responsible to any Lender for any statement, warranty
or representation made by a Person other than Administrative Agent in any
of the Loan Documents or in any notice, certificate, report, request or
other statement (written or oral) given or made by a Person other than
Administrative Agent in connection with any of the Loan Documents.
(d) Except to the extent expressly set forth in the Loan Documents,
shall have no duty to ask or inquire as to the performance or observance by
any party of any of the terms, conditions or covenants of any of the Loan
Documents or to inspect any collateral or the Property, books or records of
Borrower or its Subsidiaries.
(e) Will not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, effectiveness, sufficiency
or value of any Loan Document, any other instrument or writing furnished
pursuant thereto or in connection therewith, or any Collateral.
(f) Will not incur any liability by acting or not acting in reliance
upon any Loan Document, notice, consent, certificate, statement, request or
other instrument or writing believed by it to be genuine and signed or sent
by the proper party or parties.
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by Borrower or any Affiliate thereof
or paid or payable to or received or receivable from any Lender under any
Loan Document, including, without limitation, principal, interest,
commitment fees, Loans and other amounts; provided that, promptly upon
discovery of such an error in computation, the Administrative Agent, the
Lenders and (to the extent applicable) Borrower and/or its Affiliates shall
make such adjustments as are necessary to correct such error and to restore
the parties to the position that they would have occupied had the error not
occurred.
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11.3 DEFAULTS. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default (other
than the non-payment of principal of or interest on Loans or of Commitment Fees)
unless the Administrative Agent has received notice from a Lender or Borrower
specifying such Default or Event of Default and stating that such notice is a
"Notice of Default." In the event that the Administrative Agent receives such a
notice of the occurrence of a Default or Event of Default, the Administrative
Agent shall give prompt notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment). The Administrative Agent shall
(subject to Section 11.7 hereof) take such action with respect to such Default
or Event of Default as shall be directed by the Majority Lenders (unless the
directions of or consent of all of the Lenders is required hereunder), provided
that, unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders.
11.4 RIGHTS AS A LENDER. With respect to its Commitment and the Loans
made by it, ING (U.S.) Capital Corporation (and any successor acting as
Administrative Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term "the Lender"
or "the Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. ING (U.S.) Capital Corporation
(and any successor acting as Administrative Agent) and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with Borrower (and any of its Affiliates) as if it were not acting as the
Administrative Agent, and ING (U.S.) Capital Corporation and its Affiliates may
accept fees and other consideration from Borrower for services in connection
with this Agreement or otherwise without having to account for the same to the
Lenders.
11.5 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent and the Issuing Lender (to the extent not reimbursed under
Sections 12.5 or 12.13 hereof, but without limiting the obligations of Borrower
under said Sections 12.5 and 12.13), for their respective Commitment Percentages
of any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent or the Issuing Lender in any way relating to or arising out
of this Agreement or any other instruments, documents or agreements contemplated
by or referred to herein or the transactions contemplated hereby (including,
without limitation, the costs and expenses which
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Borrower is obligated to pay under Section 12.5 hereof but excluding, unless an
Event of Default has occurred and is continuing, normal administrative costs and
expenses of the Administrative Agent incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or of any such
other instruments, documents or agreements, provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified. The
obligations of the Lenders under this Section 11.5 shall survive the termination
of this Agreement.
11.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND THE OTHER LENDERS. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent, the Issuing Lender or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of Borrower and its Subsidiaries and its own decision to enter into
this Agreement and that it will, independently and without reliance upon the
Administrative Agent, the Issuing 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 analysis and decisions in taking or not taking action under this
Agreement. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by Borrower and its Subsidiaries of
this Agreement or any other instrument, document or agreement referred to or
provided for herein or to inspect the properties or books of Borrower and its
Subsidiaries. Except for notice, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of Borrower or any of its Affiliates which may
come into the possession of the Administrative Agent or any of its Affiliates.
11.7 FAILURE TO ACT. Except for action expressly required of the
Administrative Agent hereunder, the Administrative Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall receive
further assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 11.5 hereof against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.
11.8 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT; CO-ADMINISTRATIVE
AGENT.
(a) Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign
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at any time by giving notice thereof to the Lenders, the Co-Agents and
Borrower, and the Administrative Agent may be removed at any time with
cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed
by the Majority Lenders and shall have accepted such appointment with
thirty (30) days after the retiring Administrative Agent's giving of notice
of resignation or the Majority Lender's removal of the retiring
Administrative Agent, the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a
bank which has a combined capital and surplus of at least $300,000,000.
Upon the acceptance of any appointment as Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this Article 11 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Administrative Agent.
(b) In the event that Applicable Law imposes any restrictions on
the identity of an agent such as the Administrative Agent or requires the
appointment of any co-agent in connection therewith, the Administrative
Agent may, in its discretion, for the purpose of complying with such
restrictions, appoint one or more co- agents hereunder. Any such
Co-Administrative Agent(s) shall have the same rights, powers, privileges
and obligations as the Administrative Agent and shall be subject to and
entitled to the benefits of all provisions of this Agreement and the Loan
Documents relative to the Administrative Agent. In addition to any rights
of the Majority Lenders set forth in subsection (a) above, any such
Co-Administrative Agent may be removed at any time by the Administrative
Agent.
11.9 COLLATERAL MATTERS.
(a) Authority. Each Lender authorizes and directs the
Administrative Agent to enter into the Loan Documents relating to the
Collateral for the benefit of the Lenders. Each Lender agrees that any
action taken by the Administrative Agent or the Majority Lenders (or, where
required by the express terms of this Agreement and the Loan Documents, a
greater proportion of the Lenders) in accordance with the provisions of
this Agreement
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or the other Loan Documents, and the exercise by the Administrative Agent
or the Majority Lenders (or, where so required, such greater proportion) of
the powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. Without limiting the generality of the
foregoing, the Administrative Agent shall have the sole and exclusive right
and authority to (i) act as the disbursing and collecting agent for the
Lenders with respect to all payments and collections arising in connection
with this Agreement and the Loan Documents relating to the Collateral; (ii)
execute and deliver each Loan Document relating to the Collateral and
accept delivery of each such agreement delivered by Borrower or any of its
Subsidiaries; (iii) act as collateral agent for the Lenders for purposes of
the perfection of all security interests and Liens created by such
agreements and all other purposes stated therein, provided, however, the
Administrative Agent hereby appoints, authorizes and directs the Lenders to
act as collateral sub-agents for the Administrative Agent and the Lenders
for purposes of the perfection of all security interests and Liens with
respect to Borrower's and its Subsidiaries' respective deposit accounts
maintained with, and cash and other property held by, such Lender; (iv)
manage, supervise and otherwise deal with the Collateral; (v) take such
action as is necessary or desirable to maintain the perfection and priority
of the security interest and Liens created or purported to be created by
the Loan Documents, and (vi) except as may be otherwise specifically
restricted by the terms of this Agreement and the Loan Documents or any
other Loan Document, exercise all remedies given to the Administrative
Agent or the Lenders with respect to the Collateral under the Loan
Documents, Applicable Law or otherwise.
(b) Each Lender hereby directs the Administrative Agent to
release any Lien held by the Administrative Agent for the benefit of the
Lenders (and the Administrative Agent shall promptly release):
(i) against all of the Collateral, upon final payment in
full of the Obligations and termination of this Agreement (other than
any contingent obligations described in Section 12.2);
(ii) against any part of the Collateral sold or disposed of
by Borrower or any of its Subsidiaries, if such sale or disposition is
permitted by Section 6.3 hereof or is otherwise consented to by the
Majority Lenders, as certified to the Administrative Agent by such
Person in an Officer's Certificate;
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(iii) against any part of the Collateral constituting
property in which Borrower and its Subsidiaries owned no interest at
the time the Lien was granted or at any time thereafter;
(iv) on the Capital Stock of any Subsidiary which is the
subject of a sale, transfer or other disposition not prohibited by the
terms of the Loan Documents (and the Administrative Agent shall
concurrently release any such Subsidiary from its Guaranty of the
Obligations); and
(v) if approved, authorized or ratified in writing by the
Administrative Agent at the direction of Majority Lenders (or, to the
extent required by Section 12.8, all of the Lenders).
Each Lender hereby directs the Administrative Agent (and the Administrative
Agent agrees) to execute and deliver or file such termination and partial
release statements and do such other things as are necessary to release
Liens to be released pursuant to Section 11.9(b) hereof promptly upon the
effectiveness of any such release.
(c) Without in any manner limiting the Administrative Agent's
authority to act without any specific or further authorization or consent
by Majority Lenders or by all of the Lenders (as set forth in Section
11.9(b) hereof), each Lender agrees to confirm in writing, upon request by
Borrower, the authority to release Collateral and Guaranties conferred upon
the Administrative Agent under Section 11.9(b) hereof. So long as no
Default or Event of Default is then continuing, upon receipt by the
Administrative Agent of any such written confirmation from the required
Lenders of its authority to release any particular items or types of
Collateral or any Guaranty, and in any event upon any sale and transfer of
Collateral which is expressly permitted pursuant to the terms of this
Agreement, and upon at least five Business Days prior written request by
Borrower, the Administrative Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to the Administrative Agent for
the benefit of the Lenders herein or pursuant hereto upon such Collateral;
provided, that (i) the Administrative Agent shall not be required to
execute any such document on terms which, in the Administrative Agent's
opinion, would expose the Administrative Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of
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Borrower and its Subsidiaries in respect of) all interests retained by
Borrower and its Subsidiaries, including without limitation the proceeds of
any sale, all of which shall continue to constitute part of the Collateral.
(d) The Administrative Agent shall have no obligation whatsoever
to the Lenders or to any other Person to assure that the Collateral exists
or is owned by Borrower and its Subsidiaries or is cared for, protected or
insured or has been encumbered or that the Liens granted to the
Administrative Agent pursuant to this Agreement or any of the Loan
Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any
duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Administrative
Agent in this Section 11.9 or in any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or in respect of
any act, omission or event related thereto, the Administrative Agent may
act in any manner it may deem appropriate, in its sole discretion, given
its own interest in the Collateral as one of the Lenders and that the
Administrative Agent shall have no duty or liability whatsoever to any
Lender.
11.10 BORROWER AND ITS SUBSIDIARIES NOT BENEFICIARIES. The provisions
of this Article 11 (other than Sections 11.9(b) and (c)) are solely for the
benefit of the Administrative Agent, the Issuing Lender and the Lenders and
neither Borrower nor any of its Subsidiaries shall have any right to rely on or
enforce any of the provisions hereof. In performing its functions and duties
under this Agreement, the Administrative Agent shall act solely as the agent of
the Lenders and does not assume and shall not be deemed to have assumed any
obligations or relationship of agency, trustee or fiduciary with or for Borrower
or any of its Subsidiaries.
12. MISCELLANEOUS
12.1 WAIVER. Each and every right and remedy granted to the
Administrative Agent, the Co-Agents, the Issuing Lender and the Lenders under
this Agreement, the other Loan Documents or any other document delivered
hereunder or in connection herewith or allowed it by law or in equity, shall be
cumulative and may be exercised from time to time. No failure on the part of
the Administrative Agent, the Co-Agents, the Issuing Lender or any Lender to
exercise, and no delay in exercising, any right or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by the Administrative
Agent, the Co-Agents, the Issuing Lender, or any Lender of any right or remedy
preclude any other or future exercise thereof or the
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exercise of any other right or remedy. No waiver by the Administrative Agent,
the Co-Agents, the Issuing Lender or the Lenders of any Default or Event of
Default shall constitute a waiver of any subsequent Default or Event of Default.
12.2 SURVIVAL. All representations, warranties and covenants made
herein shall survive the execution and delivery of all of the Loan Documents.
The terms and provisions of this Agreement shall continue in full force and
effect until the termination of this Agreement in accordance with Section 2.7
hereof, provided, further, that Borrower's obligations under Sections 2.8(b),
3.9, 3.10 12.5 and 12.13 shall survive the repayment of the other Obligations
and the termination of this Agreement but, unless an enforceable demand for
payment with respect thereto has been made, shall thereafter be unsecured.
12.3 ASSIGNMENTS; SUCCESSORS AND ASSIGNS.
(a) This Agreement is a continuing obligation and binds, and the
benefits hereof shall inure to, Borrower, the Agents, the Co-Agents, the
Issuing Lender and each Lender and their respective successors and assigns;
provided, that Borrower may not transfer or assign any or all of its rights
or obligations hereunder without the prior written consent of all of the
Lenders, with any purported assignment being void ab initio.
(b) Any Lender may, in accordance with Applicable Law, at any
time sell to one or more banks or other financial institutions
("Participants") participating interests in any Loans owing to such Lender,
any of the Notes held by such Lender, any Commitment held by such Lender
hereunder or any other interests of such Lender hereunder. Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.8(b),
3.9, 3.10, 3.12 and 12.13 hereof with respect to its participation;
provided, however, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) the
participating banks or other financial institutions shall not be a Lender
hereunder for any purpose except, if the participation agreement so
provides, for the purposes of Sections 2.8(b), 3.9 and 3.10 hereof (and
then only to the extent that the relevant Lender would have rights under
such Sections), (iv) the Borrower, the Administrative Agent, the Co-Agents,
the Issuing Lender and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) the participation interest shall be
expressed as an undivided portion of the granting Lender's Commitment
Percentage as it then exists and
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shall not restrict an increase in the Commitment, or in the granting
Lender's share of the Commitment, so long as the amount of the
participation interest is not affected thereby and (vi) the consent of the
holder of such participation interest shall not be required for amendments
or waivers of provisions of the Loan Documents other than those which (A)
extend any Maturity Date or any date upon which any payment of money is due
to the Lenders, (B) reduce the rate of interest on the Notes, any fee or
any other monetary amount payable to the Lenders, (C) reduce the amount of
any installment of principal due under the Notes, or (D) release any
Collateral having a value in excess of $1,000,000.
(c) Each Lender may, with the Co-Agents' consent and in
accordance with Applicable Law, at any time assign, pursuant to an
Assignment and Acceptance substantially in the form of Exhibit F attached
hereto and incorporated herein by reference, with Borrower's consent
(unless a Default or Event of Default has occurred and remains continuing,
and in any event such consent shall not be unreasonably withheld or
delayed) to one or more banks having unimpaired capital and surplus of
$250,000,000 or more or may assign to any other financial institution (in
either case, "Eligible Assignees") all or any part of any Loans owing to
such Lender, any of the Notes held by such Lender, such Lender's
reimbursement and other rights and obligations in connection with any
Letter of Credit issued hereunder, the portion of the Commitment held by
such Lender or any other interest of such Lender hereunder; provided,
however, that (i) unless Borrower and the Co-Agents consent otherwise, and
except in the case of an assignment to another Lender, any such partial
assignment shall be in a minimum principal amount equal to the lesser of
(1) the assigning Lender's total Commitment Percentage of the Commitment
and (2) $5,000,000, (ii) each such assignment by a Lender of its Loans,
Note, Commitment Percentage, or Letter of Credit Obligations shall be made
in such manner so that the same portion of its Loans, Note, Commitment
Percentage, and Letter of Credit Obligations is assigned to the respective
assignee, and (iii) in connection with each such assignment, the assignee
Lender shall certify to Borrower that, as of the date of the assignment, it
is not subject to any Taxes which would require the making by Borrower of
any payment under Section 2.8(b). Borrower and the Lenders agree that to
the extent of any assignment the Assignee shall be a Lender and shall be
deemed to have the same rights and benefits with respect to Borrower under
this Agreement and any of the Notes and any Letter of Credit (but shall
have no greater rights under Section 2.8(b) than the Lenders party to this
Agreement on the date hereof) as it would have had if it were a Lender
hereunder on the date hereof and the assigning Lender shall be released
from its Commitment and other obligations hereunder, to the
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extent of such assignment. Upon the making of an assignment, the assigning
Lender shall pay to the Administrative Agent an assignment fee of $3,000.
(d) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 12.3, any Lender may assign
and pledge all or any portion of its Loans and its Note to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Lender from its obligations hereunder.
(e) Subject to Section 12.17, Borrower authorizes each Lender to
disclose to any Participant or Eligible Assignee ("Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning Borrower and its Subsidiaries which has been
delivered to such Lender by Borrower and its Subsidiaries or the
Administrative Agent pursuant to this Agreement or which has been delivered
to such Lender by Borrower or its Subsidiaries in connection with such
Lender's credit evaluation of Borrower and its Subsidiaries prior to
entering into this Agreement.
(f) Any Lender shall be entitled to have any Note held by it
subdivided in connection with a permitted assignment of all or any portion
of such Note and the respective Loans evidenced thereby pursuant to Section
12.3(c) above. In the case of any such subdivision, the new Note (the "New
Note") issued in exchange for a Note (the "Old Note") previously issued
hereunder (i) shall be substantially in the form of Exhibit A hereto, as
appropriate, (ii) shall be dated the date of such assignment, (iii) shall
be otherwise duly completed and (iv) shall bear a legend, to the effect
that such New Note is issued in exchange for such Old Note and that the
indebtedness represented by such Old Note shall not have been extinguished
by reason of such exchange. Without limiting the obligations of Borrower
under Section 12.5 hereof, the Lenders shall use reasonable best efforts to
ensure that any such assignment does not result in the imposition of any
intangibles, documentary stamp and other taxes, if any, which may be
payable in connection with the execution and delivery of any such New Note.
(g) Anything in this Section 12.3 to the contrary
notwithstanding, no Lender may assign or participate any interest in any
Loan held by it hereunder to Borrower or any of its Affiliates or
Subsidiaries without the prior written consent of each Lender.
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(h) Borrower shall assist the Co-Agents in any manner reasonably
requested by the Co-Agents to effectuate any resale or syndication of the
credit facilities contemplated by this Agreement, including but not limited
to the participation of relevant management in any meetings with potential
Lenders or participants.
12.4 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which when fully executed shall be an original, and all of
said counterparts taken together shall be deemed to constitute one and the same
agreement.
12.5 EXPENSE REIMBURSEMENT. Borrower agrees to reimburse (i) the
Administrative Agent, the Issuing Lender and each Co-Agent for all of each such
Person's reasonable and documented expenses incurred in connection with the
negotiation, preparation, execution, delivery and modification of this
Agreement, the Notes and the other Loan Documents, and reasonable out-of-pocket
expenses in connection with the administration and monitoring of this Agreement
and the Loan Documents, including reasonable travel, legal and other expenses
associated therewith, and (ii) the Administrative Agent's, the Issuing Lender's,
Co-Agents' and each Lender's reasonable expenses incurred in connection with the
enforcement of this Agreement, the Notes and the other Loan Documents,
including, without limitation, audit costs, appraisal costs, the cost of
searches, filings and filing fees, taxes and the reasonable fees and
disbursements of the Administrative Agent's, the Issuing Lender's and each
Co-Agent's attorneys, and any counsel retained by them. Borrower further agrees
to reimburse the Administrative Agent, the Issuing Lender, each Co-Agent and
each Lender for all costs and expenses reasonably incurred by the Administrative
Agent, the Issuing Lender, the Co-Agents and the Lenders (including, without
limitation, reasonable attorneys' fees and disbursements) to: (a) commence,
defend or intervene in any court proceeding; (b) file a petition, complaint,
answer, motion or other pleading, or to take any other action in or with respect
to any suit or proceeding (bankruptcy or otherwise) relating to the Collateral,
any Letter of Credit or this Agreement, the Notes or any of the other Loan
Documents; (c) protect, collect, lease, sell, take possession of, or liquidate
any of the Collateral; (d) attempt to enforce any Lien in any of the Collateral
or to seek any advice with respect to such enforcement; and (e) enforce any of
the Administrative Agent's, the Issuing Lender's, the Co-Agents' and the
Lenders' rights to collect any of the Obligations. Borrower also agrees to pay,
and to save harmless the Administrative Agent, the Issuing Lender, the Co-Agents
and the Lenders from any delay in paying, any intangibles, documentary stamp and
other taxes, if any, which may be payable in connection with the execution and
delivery of this Agreement, the Notes, or any of the other Loan Documents, or
the recording of
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any thereof, the issuance of any Letter of Credit or in any modification hereof
or thereof. All fees, costs and expenses provided for in this Section 12.5 may,
at the option of the Majority Lenders, be charged as Loans to the loan account
of Borrower with the Administrative Agent provided for in Section 2.3 hereof.
Borrower's obligations under this Section 12.5 shall survive the termination of
this Agreement and the repayment of the Obligations.
12.6 SEVERABILITY. If any provision of this Agreement or any of the
other Loan Documents or the application thereof to any party thereto or
circumstances shall be invalid, illegal or unenforceable to any extent, the
remainder of this Agreement or such Loan Document and the application of such
provisions to any other party thereto or circumstance shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
12.7 NOTICES. Except as otherwise provided herein, all notices,
requests, demands and other communications under this Agreement shall be in
writing and shall be deemed to have been given or made when (a) delivered by
hand, (b) sent by telex or facsimile transmitter (with receipt confirmed),
provided that a copy is mailed by certified mail, return receipt requested, or
(c) when received by the addressee, if sent by Express Mail, Federal Express or
other overnight delivery service (receipt requested), in each case to the
appropriate addresses, telex numbers, facsimile numbers designated for a party
at the "Address for Notices" specified below its name on the signature pages
hereto or to such other addresses as may be designated hereafter in writing by
the respective parties hereto.
12.8 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior negotiations,
understandings and agreements between such parties in respect of such subject
matter. Neither this Agreement nor any provision hereof may be changed, waived,
discharged, modified or terminated except pursuant to a written instrument
signed by Borrower, the Administrative Agent, the Co-Agents and the Majority
Lenders or by Borrower and the Administrative Agent acting with the consent of
the Majority Lenders and the Co-Agents; provided, however, that no such
amendment, waiver, discharge, modification or termination shall, except pursuant
to an instrument signed by Borrower, the Administrative Agent, the Co-Agents and
all of the Lenders or by Borrower and the Administrative Agent acting with the
consent of all of the Lenders and the Co-Agents, (a) increase the amount of,
extend the term of, or extend the time or waive any requirement for the
termination of the Commitment or increase any Lender's Commitment Percentage;
(b) extend the date fixed for the scheduled payment of
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principal of, or interest on, any Loan or Letter of Credit; (c) reduce the
amount of any scheduled payment of principal of, or the rate of interest on, any
Loan; (d) reduce any Letter of Credit fee, Commitment Fee or other fee payable
hereunder; (e) alter the terms of this Section 12.8; (f) release any guarantor
of the Obligations or any Collateral having a value in excess of $500,000,
except to the extent expressly required hereunder; (g) reduce the Commitment of
any Lender in any manner which would change such Lender's Commitment Percentage;
or (h) amend the definitions of the term "Majority Lenders," or "Permitted
Acquisition" set forth in Section 1.1 hereof; provided, further, that any
amendment, waiver, discharge, modification or termination of any provision of
Article 10 hereof, or which increases the obligations of the Administrative
Agent or the Co-Agents hereunder and under the Loan Documents, shall require the
written consent of the Administrative Agent or the Co-Agents, as the case may
be.
Anything in this Agreement to the contrary notwithstanding, if any
Lender shall fail to fulfill its obligations to make any Loan hereunder then,
for so long as such failure shall continue, such Lender shall (unless the
Majority Lenders, determined as if such Lender were not a "Lender" hereunder,
shall otherwise consent in writing) be deemed for all purposes relating to
amendments, modifications, waivers or consents under this Agreement or the Notes
(including, without limitation, under this Section 12.8) to have no Loans and no
Commitment, shall not be treated as a "Lender" hereunder when performing the
computation of Majority Lenders, and shall have no rights under the preceding
paragraph of this Section 12.8; provided that any action taken by the other
Lenders with respect to the matters referred to in clauses (a) through (h) of
the preceding paragraph shall not be effective as against such Lender.
12.9 TIME OF THE ESSENCE. Time is of the essence in this Agreement
and the other Loan Documents.
12.10 INTERPRETATION. No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other Governmental Authority by reason of such party having or being
deemed to have structured or dictated such provision.
12.11 LENDERS NOT JOINT VENTURERS. Neither this Agreement, the other
Loan Documents, any agreements, instruments and documents executed and delivered
pursuant hereto or thereto or in connection herewith or therewith, nor any of
the transactions contemplated hereby or thereby shall in any respect be
interpreted, deemed or construed as making the Administrative Agent, the
Co-Agents or any Lender a partner or joint venturer with Borrower or any of its
Subsidiaries or as creating any
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similar relationship or entity, and Borrower agrees that it will not make, and
will not permit any of its Subsidiaries to make, any assertion, contention,
claim or counterclaim to the contrary in any action, suit or other legal
proceeding involving the Administrative Agent, the Co-Agents or the Lenders and
Borrower or any of its Subsidiaries.
12.12 CURE OF DEFAULTS BY LENDERS. If, hereafter, Borrower or any of
its Subsidiaries defaults in the performance of any duty or obligation to any
third party, the Administrative Agent may, at the direction of the Majority
Lenders, but without obligation, cure such default and any reasonable costs,
fees and expenses incurred by the Administrative Agent in connection therewith
including, without limitation, for payment on mortgage or note obligations, for
the purchase of insurance, the payment of taxes and the removal or settlement of
Liens and claims, and such costs, fees and expenses shall be included in the
Obligations and be secured by the Collateral.
12.13 INDEMNITY. In addition to any other indemnity provided for
herein, Borrower hereby indemnifies the Administrative Agent, the Co-Agents, the
Issuing Lender and each Lender from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable fees and disbursements of counsel which may be imposed
on, incurred by, or asserted against the Administrative Agent, the Co-Agents,
the Issuing Lender or such Lender in any litigation, proceeding or investigation
instituted or conducted by any Governmental Authority or any other Person (other
than Borrower or its Subsidiaries or a Person entitled to the benefits of the
indemnity provided by this Section) with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the other Loan Documents, whether or not the Administrative Agent,
the Co-Agents, the Issuing Lender or such Lender is a party thereto, except to
the extent that any of the foregoing arises out of gross negligence, willful
misconduct or a breach of this Agreement by the Administrative Agent, the
Co-Agents, the Issuing Lender or such Lender, as the case may be. Additionally,
Borrower hereby indemnifies and holds the Administrative Agent, the Co-Agents,
the Issuing Lender and each Lender harmless from all loss, cost (including,
without limitation, fees and disbursements of counsel), liability and damage
whatsoever incurred by the Administrative Agent, the Co-Agents, the Issuing
Lender or such Lender by reason of any violation of any applicable Environmental
Laws for which Borrower, any of its Subsidiaries or any of their respective
predecessors has any liability or which occurs upon any real estate owned by or
under the control of Borrower or any of its Subsidiaries, or by reason of the
imposition of any governmental Lien for the recovery of environmental cleanup
costs expended by reason of such violation. Borrower's
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obligations under this Section shall survive the termination of this Agreement
and the repayment of the Obligations.
12.14 CONSEQUENTIAL DAMAGES. NEITHER THE ADMINISTRATIVE AGENT, THE
CO-AGENTS, THE ISSUING LENDER NOR ANY LENDER SHALL BE RESPONSIBLE OR LIABLE TO
BORROWER, ANY OF ITS SUBSIDIARIES, OR ANY OTHER PERSON OR ENTITY FOR ANY
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
12.15 ATTORNEY-IN-FACT. Borrower hereby designates, appoints and
empowers the Administrative Agent, with such appointment effective upon the
occurrence and during the continuance of any Event of Default, as its
attorney-in-fact, at Borrower's cost and expense, to do in the name of that
Borrower any and all actions which the Administrative Agent may deem necessary
or advisable to carry out the terms hereof upon the failure, refusal or
inability of Borrower to do so, and Borrower hereby agrees to indemnify and hold
the Administrative Agent harmless from any costs, damages, expenses or
liabilities arising against or incurred by the Administrative Agent in
connection therewith except to the extent that any of such costs, damages,
expenses or liabilities arise out of the Administrative Agent's gross negligence
or willful misconduct. This appointment is coupled with an interest and is
irrevocable.
12.16 TERMINATION STATEMENTS. Borrower acknowledges and agrees that it
is intended that all financing statements filed hereunder against Borrower or
any of its Subsidiaries shall remain in full force and effect until the
Commitment shall have been terminated in accordance with the provisions hereof,
even if, at any time or times prior to such termination, no Loans or Letters of
Credit shall be outstanding hereunder. Accordingly, Borrower waives any right
which it may have under Section 9-404(l) of the UCC to demand the filing of
termination statements with respect to the Collateral, and agrees that the
Administrative Agent shall not be required to send such termination statements
to Borrower or any of its Subsidiaries, or to file them with any filing office,
unless and until the Commitment shall have been terminated in accordance with
the terms of this Agreement and (except as provided in Section 12.2) all
Obligations paid in full in immediately available funds and until the
termination or expiration of all Letters of Credit (or the provision of cash
collateral therefor in accordance with the terms of this Agreement). Upon such
termination and payment in full, the Administrative Agent shall execute
appropriate termination statements and deliver the same to Borrower.
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12.17 CONFIDENTIALITY. Each Lender and the Administrative Agent agrees
to hold any confidential information that it may receive from Borrower pursuant
to this Agreement in confidence, except for disclosure: (a) to other Lenders
and Affiliates of that Lender; (b) to legal counsel, accountants and other
professional advisors to Borrower or any Lender; (c) to regulatory officials
having jurisdiction over that Lender; (d) as required by Applicable Law or legal
process or in connection with any legal proceeding to which that Lender and
Borrower are adverse parties; (e) to another financial institution in connection
with a disposition or proposed disposition to that financial institution of all
or part of that Lender's interests hereunder or a participation interest in its
Note, provided that such disclosure is made subject to an appropriate
confidentiality agreement on terms substantially similar to this Section; and
(f) to prospective purchasers of any Collateral in connection with any
disposition thereof. For purposes of the foregoing, "confidential information"
shall mean all information respecting Borrower and its Subsidiaries, other than
(i) information previously filed with any governmental agency and available to
the public, (ii) information previously published in any public medium from a
source other than, directly or indirectly, that Lender, and (iii) information
previously disclosed by Borrower and its Subsidiaries to any Person not
associated with Borrower without a written confidentiality agreement. Nothing
in this Section shall be construed to create or give rise to any fiduciary duty
on the part of the Administrative Agent or the Lenders to Borrower.
12.18 TERMINATION OF LENDERS. In the event that any Lender requests
the making of any payment under Section 2.8(b), Section 3.7, 3.8 or 3.9, then
Borrower shall, during the 180 day period following such request, have the right
to remove that Lender as a party to this Agreement; provided that no Default or
Event of Default exists as of the date of removal. If Borrower elects to remove
a Lender pursuant to this Section, then upon notice from Borrower, the Lender
being removed shall execute and deliver an Assignment and Acceptance covering
that Lender's Commitment Percentage of the Commitment in favor of one or more
Eligible Assignees designated by Borrower (and acceptable to the Co-Agents or
remaining Co-Agent which acceptance shall not be unreasonably delayed or
withheld), subject to (i) payment of a purchase price by such Eligible Assignee
equal to all principal and accrued interest, fees and other amounts payable to
the assigning Lender under this Agreement through the date of assignment.
12.18A TREATMENT OF CMS SUBORDINATED DEBT. The parties hereto
acknowledge that in connection with Borrower's Acquisition of CMS Services, Inc.
and certain of its affiliates, CMS Management Services LLC has issued certain
Promissory Notes dated as of May 1, 1998 in the aggregate principal amount of
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$5,000,000 (the "CMS Indebtedness"). The parties hereby agree that (a) Borrower
shall cause the holders of the CMS Indebtedness to accept notes issued by
Borrower (without recourse to any of its Subsidiaries), which are substantially
identical to the notes issued by CMS Management Services LLC and in any event
acceptable to the Agent and its counsel within the 30 day period following the
effective date of this Agreement, in lieu of the CMS Indebtedness, (b) during
such period, the CMS Indebtedness shall be treated as Subordinated Obligations
for all purposes of this Agreement, and (c) the Lenders waive any Default or
Event of Default arising out of the incurrence of the CMS Indebtedness by CMS
Management Services LLC (rather than by Borrower).
12.19 GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
BORROWER, THE ADMINISTRATIVE AGENT, THE CO-AGENTS, THE ISSUING LENDER AND EACH
LENDER HEREBY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE LETTERS OF CREDIT, THE NOTES, OR THE
OTHER LOAN DOCUMENTS; (B) AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS AGREEMENT AND THE
LOAN DOCUMENTS; AND (C) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE ADMINISTRATIVE AGENT, THE ISSUING LENDER OR ANY LENDER TO BRING
PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
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12.20 WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH ITS RESPECTIVE COUNSEL, BORROWER, THE ADMINISTRATIVE AGENT,
THE CO-AGENTS, THE ISSUING LENDER AND EACH LENDER HEREBY KNOWINGLY,
INTELLIGENTLY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING OUT OF, UNDER, IN
CONNECTION WITH, OR RELATING TO THIS AGREEMENT, THE LETTERS OF CREDIT, ANY OF
THE NOTES, ANY OF THE OTHER LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN), OR ACTIONS OF BORROWER, THE ADMINISTRATIVE AGENT, THE CO-AGENTS OR ANY
LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS TO MAKE THE
LOANS TO AND ISSUE LETTERS OF CREDIT FOR THE ACCOUNT OF BORROWER.
IN WITNESS WHEREOF, Borrower, the Administrative Agent, the Co-Agents the
Issuing Lender and the Lenders have caused their duly authorized officers to set
their hands and seals as of the day and year first above written.
CORPORATE STAFFING RESOURCES, INC.
By: /s/
-------------------------------
Title: CHRM CEO
----------------------------
Address for Notices:
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
Telephone: 000 000 0000
Telecopier 000 000 0000
-97-
105
ING (U.S.) CAPITAL CORPORATION, as
Administrative Agent, Co-Agent and a Lender
Commitment Percentage: 33 1/3%
By: /s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx, Vice President
Address for Notices:
ING (U.S.) Capital Corporation
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxx Xxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to:
ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx Xxxx
Loan Department
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
-98-
106
CREDITANSTALT CORPORATE FINANCE, INC.,
as Co-Agent and as a Lender
Commitment Percentage: 33 1/3%
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------------
Xxxxxx X. Xxxxxxxx, Executive Vice President
By: /s/ Xxxx Xxxxxx
------------------------------------------------
Xxxx Xxxxxx, Senior Associate
Address for Notices:
Creditanstalt Corporate Finance, Inc.
Two Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn.: Xxxx Xxxxx
Facsimile No: (000) 000-0000
with copies to:
Creditanstalt Corporate Finance, Inc.
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxxxx
Xxxx Xxxxxx
Facsimile No: (000) 000-0000
and
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn.: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No: (000) 000-0000
-99-
107
SOCIETE GENERALE, as a Lender
Commitment Percentage: 33 1/3%
By: /s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx, Vice President
Address for Notices:
SG
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn.: Xxxxx Xxxxx
Facsimile No. (000) 000-0000
with copies to:
Societe Generale
000 Xxxxxxxxx Xxxxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx Xxxxx
Facsimile No. (000) 000-0000
and
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn.: Xxxx Xxxx Xxxxxxx
Facsimile No. (000) 000-0000
-100-
