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EXHIBIT 10.24
364-DAY CREDIT AGREEMENT
among
MAXIM RETAIL STORES, INC.
as Borrower,
AND
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
as Guarantors,
AND
THE LENDERS IDENTIFIED HEREIN,
AND
NATIONSBANK, N.A.,
as Agent
DATED AS OF NOVEMBER 25, 1998
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS.........................................................1
1.1 Definitions...........................................................................1
1.2 Computation of Time Periods and Other Definitional Provisions........................21
1.3 Accounting Terms.....................................................................21
SECTION 2 CREDIT FACILITIES.......................................................................21
2.1 Revolving Loans......................................................................21
2.2 Letter of Credit Subfacility.........................................................23
2.3 Continuations and Conversions........................................................29
2.4 Minimum Amounts......................................................................29
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT............................29
3.1 Interest.............................................................................29
3.2 Place and Manner of Payments.........................................................30
3.3 Prepayments..........................................................................30
3.4 Fees.................................................................................31
3.5 Payment in full at Maturity..........................................................32
3.6 Computations of Interest and Fees....................................................33
3.7 Pro Rata Treatment...................................................................33
3.8 Sharing of Payments..................................................................34
3.9 Capital Adequacy.....................................................................35
3.10 Inability To Determine Interest Rate.................................................36
3.11 Illegality...........................................................................36
3.12 Requirements of Law..................................................................36
3.13 Taxes................................................................................37
3.14 Compensation.........................................................................40
3.15 Evidence of Debt.....................................................................40
3.16 Replacement of Lenders...............................................................41
SECTION 4 GUARANTY................................................................................41
4.1 Guaranty of Payment..................................................................41
4.2 Obligations Unconditional............................................................41
4.3 Modifications........................................................................42
4.4 Waiver of Rights.....................................................................43
4.5 Reinstatement........................................................................43
4.6 Remedies.............................................................................43
4.7 Limitation of Guaranty...............................................................44
4.8 Rights of Contribution...............................................................44
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SECTION 5 CONDITIONS PRECEDENT...................................................................................44
5.1 Closing Conditions..................................................................................44
5.2 Conditions to All Extensions of Credit..............................................................47
SECTION 6 REPRESENTATIONS AND WARRANTIES.........................................................................48
6.1 Financial Condition.................................................................................48
6.2 No Material Change..................................................................................49
6.3 Organization and Good Standing......................................................................49
6.4 Due Authorization...................................................................................49
6.5 No Conflicts........................................................................................49
6.6 Consents............................................................................................50
6.7 Enforceable Obligations.............................................................................50
6.8 No Default..........................................................................................50
6.9 Ownership...........................................................................................50
6.10 Indebtedness........................................................................................50
6.11 Litigation..........................................................................................50
6.12 Taxes...............................................................................................51
6.13 Compliance with Law.................................................................................51
6.14 ERISA...............................................................................................51
6.15 Subsidiaries........................................................................................52
6.16 Use of Proceeds.....................................................................................53
6.17 Government Regulation...............................................................................53
6.18 Environmental Matters...............................................................................54
6.19 Intellectual Property...............................................................................55
6.20 Solvency............................................................................................55
6.21 Investments.........................................................................................55
6.22 Location of Collateral..............................................................................56
6.23 Disclosure..........................................................................................56
6.24 Licenses, etc.......................................................................................56
6.25 Collateral Documents................................................................................56
6.26 Burdensome Restrictions.............................................................................56
SECTION 7 AFFIRMATIVE COVENANTS..................................................................................57
7.1 Information Covenants...............................................................................57
7.2 Financial Covenants.................................................................................61
7.3 Preservation of Existence and Franchises............................................................61
7.4 Books and Records...................................................................................61
7.5 Compliance with Law.................................................................................61
7.6 Payment of Taxes and Other Indebtedness.............................................................62
7.7 Insurance...........................................................................................62
7.8 Maintenance of Property.............................................................................62
7.9 Performance of Obligations..........................................................................63
7.10 Collateral..........................................................................................63
7.11 Use of Proceeds.....................................................................................63
7.12 Audits/Inspections..................................................................................64
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7.13 Additional Credit Parties...........................................................................64
7.14 Year 2000 Compliance................................................................................65
SECTION 8 NEGATIVE COVENANTS.....................................................................................65
8.1 Indebtedness........................................................................................65
8.2 Liens...............................................................................................66
8.3 Nature of Business..................................................................................66
8.4 Consolidation and Merger............................................................................66
8.5 Sale or Lease of Assets.............................................................................67
8.6 Sale Leasebacks.....................................................................................67
8.7 Advances, Investments and Loans.....................................................................67
8.8 Restricted Payments.................................................................................67
8.9 Transactions with Affiliates........................................................................68
8.10 Fiscal Year; Organizational Documents...............................................................68
8.11 No Limitations......................................................................................68
8.12 No Other Negative Pledges...........................................................................68
8.13 Limitation on Foreign Operations....................................................................69
8.14 Capital Expenditures................................................................................69
8.15 Prepayments of Indebtedness.........................................................................69
SECTION 9 EVENTS OF DEFAULT......................................................................................69
9.1 Events of Default...................................................................................69
9.2 Acceleration; Remedies..............................................................................72
9.3 Allocation of Payments After Event of Default.......................................................73
SECTION 10 AGENCY PROVISIONS.....................................................................................74
10.1 Appointment.........................................................................................74
10.2 Delegation of Duties................................................................................75
10.3 Exculpatory Provisions..............................................................................75
10.4 Reliance on Communications..........................................................................76
10.5 Notice of Default...................................................................................76
10.6 Non-Reliance on Agent and Other Lenders.............................................................76
10.7 Indemnification.....................................................................................77
10.8 Agent in Its Individual Capacity....................................................................77
10.9 Successor Agent.....................................................................................78
SECTION 11 MISCELLANEOUS.........................................................................................78
11.1 Notices.............................................................................................78
11.2 Right of Set-Off....................................................................................78
11.3 Benefit of Agreement................................................................................79
11.4 No Waiver; Remedies Cumulative......................................................................81
11.5 Payment of Expenses; Indemnification................................................................82
11.6 Amendments, Waivers and Consents....................................................................82
11.7 Counterparts/Telecopy...............................................................................84
11.8 Headings............................................................................................84
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11.9 Defaulting Lender..................................................................................84
11.10 Survival of Indemnification and Representations and Warranties.....................................84
11.11 Governing Law; Jurisdiction........................................................................84
11.12 Waiver of Jury Trial...............................................................................85
11.13 Time...............................................................................................85
11.14 Severability.......................................................................................85
11.15 Further Assurances.................................................................................85
11.16 Confidentiality....................................................................................85
11.17 Entirety...........................................................................................86
11.18 Binding Effect; Continuing Agreement...............................................................86
SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 1.1(b) Indenture Default
Schedule 1.1(c) Permitted Liens
Schedule 6.10 Indebtedness
Schedule 6.15 Subsidiaries
Schedule 6.19 Intellectual Property
Schedule 6.22(a) Real Property Locations
Schedule 6.22(b) Personal Property Locations
Schedule 6.22(c) Chief Executive Offices
Schedule 7.7 Insurance
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(f) Form of Revolving Note
Exhibit 2.3 Form of Notice of Continuation/Conversion
Exhibit 7.1(d) Form of Borrowing Base Report
Exhibit 7.1(e) Form of Officer's Certificate
Exhibit 7.13 Form of Joinder Agreement
Exhibit 10.1(b) Form of Intercreditor Agreement
Exhibit 11.3(b) Form of Assignment Agreement
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364-DAY CREDIT AGREEMENT
THIS 364-DAY CREDIT AGREEMENT (this "Credit Agreement"), is entered
into as of November 25, 1998 among MAXIM RETAIL STORES, INC., a Georgia
corporation (the "Borrower"), each of the Domestic Subsidiaries of the Borrower
(individually a "Guarantor" and collectively the "Guarantors"), the Lenders (as
defined herein) and NATIONSBANK, N.A., as Agent for the Lenders.
RECITALS
WHEREAS, the Borrower and the Guarantors have requested the Lenders to
provide a 364-day senior secured credit facility in an amount up to $15
million; and
WHEREAS, the Lenders party hereto have agreed to make the requested
364-day senior secured credit facility available to the Borrower on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date, as provided in Section 7.13.
"Adjusted Base Rate" means the Base Rate plus 0.50%.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus
2.00%.
"Agent" means NationsBank, N.A. (or any successor thereto) or
any successor agent appointed pursuant to Section 10.9.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited
to all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed
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to control a corporation if such Person possesses, directly or
indirectly, the power (a) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such
corporation or (b) to direct or cause direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Asset Disposition" means the disposition of any or all of
the assets of a Credit Party or any of its Subsidiaries whether by
sale, lease, transfer or otherwise, other than (a) transfers of assets
permitted by Section 8.5 and (b) losses of assets or destroyed assets
permitted by clauses (a) and (b) of Section 7.7.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of
the United States Code, as amended, modified, succeeded or replaced
from time to time.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means Maxim Retail Stores, Inc., a Georgia
corporation, together with any successors and permitted assigns.
"Borrowing Base Assets" means, at any date of determination,
the sum of (a) 80% of Eligible Accounts Receivable plus (b) 30% of
Eligible Inventory in each case as set forth in the most recently
delivered Borrowing Base Report.
"Borrowing Base Report" means a report, substantially in the
form of Exhibit 7.1(d), describing the Borrowing Base Assets as of a
particular date.
"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized
or required by law or other governmental action to close in Charlotte,
North Carolina; provided that in the case of Eurodollar Loans, such
day is also a day on which dealings between banks are carried on in
U.S. dollar deposits in the London interbank market.
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"Capital Expenditures" means all expenditures of the Credit
Parties and their Subsidiaries which, in accordance with GAAP, would
be classified as capital expenditures, including, without limitation,
Capital Leases.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for
as a capital lease on the balance sheet of that Person and the amount
of such obligation shall be the capitalized amount thereof determined
in accordance with GAAP.
"Cash Equivalents" means (a) securities issued or directly
and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time and demand deposits and
certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank having capital and surplus in excess of $500,000,000
or (iii) any bank whose short-term commercial paper rating from S&P is
at least A-1 or the equivalent thereof or from Xxxxx'x is at least P-1
or the equivalent thereof (any such bank being an "Approved Bank"), in
each case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase
agreements with a bank or trust company (including any of the Lenders)
or recognized securities dealer having capital and surplus in excess
of $500,000,000 for direct obligations issued by or fully guaranteed
by the United States of America in which the Borrower shall have a
perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at
least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
"Change of Control" means the occurrence of any of the
following events: (a) any "person" or "group" (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), has become, directly or
indirectly, the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all shares that any such Person has the
right to acquire, whether such right is exercisable immediately or
only after the passage of time), by way of merger, consolidation or
otherwise, of 25% or more of the Voting Stock of Maxim on a
fully-diluted basis, after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities of
Maxim (whether or not such securities are then currently convertible
or exercisable); (b) during any period of two consecutive calendar
years, individuals who at
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the beginning of such period constituted the board of directors of
Maxim cease for any reason to constitute a majority of the directors
of Maxim then in office unless such new directors were elected by the
directors of Maxim who constituted the board of directors of Maxim at
the beginning of such period; (c) Maxim shall fail to own and have the
right to vote 100% of the outstanding Voting Stock of the Parent,
determined on a fully diluted basis after giving effect to the
conversion and exercise of all outstanding warrants, options and other
securities of the Parent that are convertible into or exercisable for
Voting Stock of the Parent; or (d) the Parent shall fail to own and
have the right to vote 100% of the outstanding Voting Stock of the
Borrower, determined on a fully diluted basis after giving effect to
the conversion and exercise of all outstanding warrants, options and
other securities of the Borrower that are convertible into or
exercisable for Voting Stock of the Borrower.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986 and the rules
and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.
"Collateral" means all assets of the Credit Parties in which,
pursuant to the Collateral Documents, a Lien has been granted in favor
of the Agent, for the benefit of the Lenders.
"Collateral Documents" means the Security Agreements, the
Pledge Agreements, and such other documents executed and delivered in
connection with the attachment and perfection of the Agent's security
interests in the assets of the Credit Parties, including without
limitation, the UCC financing statements.
"Commitment Fees" means the fees payable to the Lenders
pursuant to Section 3.4(a).
"Commitments" means (i) with respect to each Lender, the
Revolving Loan Commitment and (ii) with respect to the Issuing Lender,
the LOC Commitment.
"Credit Documents" means this Credit Agreement, the Notes,
any Joinder Agreement, the Collateral Documents, the LOC Documents,
and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.
"Credit Parties" means the Borrower and the Guarantors and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (a)
all of the obligations of the Credit Parties to the Lenders (including
the Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other
Credit Documents to which any Credit Party is a party and (b) all
liabilities and
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obligations owing from such Credit Party to any Lender, or any
Affiliate of a Lender, arising under Hedging Agreements.
"Current Assets" means, as of the date of determination, the
total amount of current assets of the Borrower and its Subsidiaries on
a consolidated basis determined in accordance with GAAP.
"Current Liabilities" means, as of the date of determination,
the total amount of current liabilities of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with
GAAP.
"Current Ratio" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the ratio of Current Assets to
Current Liabilities.
"Debt Issuance" means the issuance of any Indebtedness for
borrowed money by a Credit Party or any of its Subsidiaries, other
than Indebtedness permitted by Section 8.1.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a)
has failed to make a Loan or purchase a Participation Interest
required pursuant to the terms of this Credit Agreement (but only for
so long as such Loan is not made or such Participation Interest is not
purchased), (b) has failed to pay to the Agent or any Lender an amount
owed by such Lender pursuant to the terms of this Credit Agreement
(but only for so long as such amount has not been repaid) or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Subsidiary" means each direct and indirect
Subsidiary of the Borrower that is domiciled, incorporated or
organized under the laws of any state of the United States or the
District of Columbia whether existing as of the date hereof or
hereafter created or acquired. As of the Closing Date, the Domestic
Subsidiaries are as set forth on Schedule 6.15.
"EBITDAR" means, for any period, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, the sum of (a)
Net Income for such period (excluding the effect of any extraordinary
or other non-recurring gains (including any gain from the sale of
property) or non-cash losses) plus (b) an amount which, in the
determination of Net Income for such period has been deducted for (i)
Interest Expense for such period, (ii) total Federal, state, foreign
or other income or franchise taxes for such period, (iii) all
depreciation and amortization for such period, and (iv) Rent Expense
for such period, all as determined in accordance with GAAP.
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"Effective Date" means the date on which the conditions set
forth in Section 5.1 shall have been fulfilled (or waived in the sole
discretion of the Lenders) and on which the initial Loans shall have
been made and/or the initial Letters of Credit shall have been issued.
"Eligible Assignee" means (a) any Lender; (b) an Affiliate of
a Lender; and (c) any other Person approved by the Agent and the
Borrower (such approval not to be unreasonably withheld or delayed);
provided that (i) the Borrower's consent is not required during the
existence and continuation of an Event of Default, (ii) approval by
the Borrower shall be deemed given if no objection is received by the
assigning Lender and the Agent from the Borrower within two Business
Days after notice of such proposed assignment has been received by the
Borrower; and (iii) neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Eligible Accounts Receivable" means, as of any date of
determination, and without duplication, the amount of all accounts
receivable, receivables, and obligations for payment created or
arising from the sale or shipment of inventory or the rendering of
services in the ordinary course of business (collectively, the
"Receivables"), owned by or owing to the Credit Parties and in which
the Agent, for the benefit of the Lenders, has a first priority
perfected security interest, net of any allowances and reserves for
doubtful or uncollectable accounts included in such aggregate value
and sales adjustments consistent with a Credit Party's internal
policies and in any event in accordance with GAAP, but excluding in
any event (a) Receivables subject to any Lien other than a Lien in
favor of the Agent for the benefit of the Lenders and a Lien in favor
of NationsBank, in its capacity as agent for the lenders party to the
Maxim Group Credit Agreement and the TROL Lenders, (b) Receivables
which, at the date of issuance of the invoice with respect thereto,
are payable more than 90 days after the date of issuance of such
invoice, (c) Receivables which are more than 90 days past due or
outstanding more than 90 days after the invoice date if no due date is
specified, (d) Receivables evidenced by notes, chattel paper or other
instruments, unless such notes, chattel paper or instruments have been
delivered to and are in the possession of the Agent, (e) Receivables
owing by an account debtor which is subject to any bankruptcy or
insolvency proceeding of any kind, (f) Receivables owing by an account
debtor located outside of the United States (unless (i) payment for
the goods shipped is secured by an irrevocable letter of credit or
(ii) export insurance is obtained, in each case in a form and from an
institution acceptable to the Agent), (g) Receivables which are
contingent or subject to offset, deduction, counterclaim, dispute or
other defense to payment, in each case to the extent of such offset,
deduction, counterclaim, dispute or other defense, (h) Receivables for
which any direct or indirect Subsidiary of the Borrower or any
Affiliate of the Borrower or the Borrower is the account debtor, (i)
Receivables representing a sale to the government of the United States
of America or any subdivision thereof, or any state, county or
municipal government and (j) all Receivables from an account debtor
who has more than 25% of its Receivables owing to the Credit Parties
that are more than 90 days past due or outstanding more than 90 days
after the invoice date if no due date is specified. It is specifically
understood and agreed that the accounts receivable and receivables
established or purchased by GE Capital under the GE Capital Program
and accounts receivable and receivables established or purchased by
Monogram under the Monogram
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Program are not owned or owing to the Credit Parties, and therefore
such accounts receivable and receivables will not be included in the
definition of Eligible Accounts Receivable.
"Eligible Inventory" means, as of any date of determination
and without duplication, the lower of the aggregate book value (based
on a FIFO or a moving average cost valuation, consistently applied) or
fair market value (provided that the value of any inventory sold
between Credit Parties shall be calculated using the value of the
inventory prior to any such sale between Credit Parties) of all raw
materials and finished goods inventory owned by any Credit Party and
in which the Agent, for the benefit of the Lenders, has a first
priority perfected security interest less appropriate reserves
determined in accordance with GAAP, but excluding in any event (a)
inventory subject to any Lien other than Liens in favor of the Agent
for the benefit of the Lenders and Liens in favor of NationsBank, in
its capacity as agent for the lenders party to the Maxim Group Credit
Agreement and the TROL Lenders, (b) inventory which is not in good
condition or fails to meet standards for sale or use imposed by
governmental agencies, departments or divisions having regulatory
authority over such goods, (c) inventory which is discontinued or not
useable or saleable at prices approximating their cost in the ordinary
course of the applicable Credit Party's business (including without
duplication the amount of any reserves for obsolescence, unsalability
or decline in value), (d) inventory located outside of the United
States, (e) inventory located at a location not owned or leased by the
applicable Credit Party unless the Agent has received a waiver and
estoppel agreement, reasonably satisfactory to the Agent, from the
owner/operator of such location, and, if deemed appropriate by the
Agent, a UCC financing statement has been filed with respect to such
location, (f) inventory located at a location leased by the applicable
Credit Party at which such Credit Party maintains in excess of
$400,000 of inventory and with respect to which the Agent shall not
have received a landlord's waiver and estoppel agreement in a form
reasonably satisfactory to the Agent and (g) inventory which is leased
or on consignment.
"Environmental Claim" means any investigation, written
notice, violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim whether administrative, judicial, or
private in nature arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged damage, injury, threat, or
harm to health, safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of health, safety, and the indoor or outdoor environment,
(b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater
or (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release,
threatened release, abatement, removal, remediation or handling of, or
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exposure to, any hazardous or toxic substance or material or (e)
pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986,
42 USC 9601 et seq., Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid
Waste Amendments of 1984, 42 USC 6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et
seq., Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic
Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous
Materials Transportation Act, 49 USC App. 1801 et seq., Occupational
Safety and Health Act of 1970, as amended, 29 USC 651 et seq., Oil
Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and
Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking
Water Act of 1974, as amended, 42 USC 300(f) et seq., any analogous
implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.
"Equity Issuance" means any issuance by a Credit Party to any
Person of (a) shares of its capital stock or other equity interests,
(b) any shares of its capital stock or other equity interests pursuant
to the exercise of options or warrants or (c) any shares of its
capital stock or other equity interests pursuant to the conversion of
any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with any Credit Party or
any of its Subsidiaries within the meaning of Section 4001(a)(14) of
ERISA, or is a member of a group which includes any Credit Party or
any of its Subsidiaries and which is treated as a single employer
under Sections 414(b), (c), (m), or (o) of the Code.
"Eurodollar Loan" means a Loan bearing interest based at a
rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = London Interbank Offered Rate
-------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from
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time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not a Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available
from time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances
specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as
amended, modified, succeeded or replaced from time to time.
"Executive Officer" means any chief executive officer, chief
operating officer, executive vice president of finance, chief
financial officer or treasurer of the Borrower.
"Extension of Credit" means, as to any Lender, the making of
a Loan by such Lender (or a participation therein by a Lender) or the
issuance of, or participation in, a Letter of Credit by such Lender.
"Federal Funds Rate" means for any day the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding Business Day and (b) if no such rate is so published on such
next preceding Business Day, the Federal Funds Rate for such day shall
be the average rate quoted to the Agent on such day on such
transactions as determined by the Agent.
"Fee Letter" means that certain letter agreement among Maxim,
NMS and the Agent dated as of August 4, 1998.
"First Tier Foreign Subsidiary" means each Foreign Subsidiary
which is owned directly by a Credit Party.
"Foreign Subsidiary" means any Subsidiary of the Borrower or
any other Credit Party that is not a Domestic Subsidiary.
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"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section
1.3.
"GE Capital" means General Electric Capital Corporation, a
New York corporation.
"GE Capital Dealer Agreement" means any Xxxx Business
Revolving Credit Card Program Business Revolving Charge Dealer
Agreement by and among the Borrower, C&S Textiles, Inc., Maxim and GE
Capital and any other credit card program revolving charge dealer
agreement entered into by and among the Borrower, C&S Textiles, Inc.,
Maxim and GE Capital.
"GE Capital Program" means any program established by GE
Capital under which GE Capital extends credit to certain customers of
the Borrower and C&S Textiles, Inc. for the purchase of goods,
services and other products from the Borrower and C&S Textiles, Inc.
"Governmental Authority" means any Federal, state, local,
provincial or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantor" means each of the Domestic Subsidiaries of the
Borrower and each Additional Credit Party which has executed a Joinder
Agreement or otherwise become a Guarantor hereunder, together with
their successors and assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing any Indebtedness of any other Person in any
manner, whether direct or indirect, and including without limitation
any obligation, whether or not contingent, (a) to purchase any such
Indebtedness or other obligation or any property constituting security
therefor, (b) to advance or provide funds or other support for the
payment or purchase of such Indebtedness or obligation or to maintain
working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, maintenance agreements,
comfort letters, take or pay arrangements, put agreements or similar
agreements or arrangements) for the benefit of the holder of
Indebtedness of such other Person, (c) to lease or purchase property,
securities or services primarily for the purpose of assuring the owner
of such Indebtedness or (d) to otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an
amount equal to the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste
defined in or regulated under any Environmental Laws.
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"Hedging Agreements" means any interest rate protection
agreements, foreign currency exchange agreements, or other interest or
exchange rate hedging agreements, in each case, entered into or
purchased by a Credit Party by or from any Lender or any Affiliate of
any Lender.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person to
the extent of the value of such property (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations,
other than intercompany items, of such Person issued or assumed as the
deferred purchase price of property or services purchased by such
Person which would appear as liabilities on a balance sheet of such
Person, (e) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (f) all Guaranty Obligations of such Person, (g) the
principal portion of all obligations of such Person under (i) Capital
Leases and (ii) Synthetic Leases, (h) all net obligations of such
Person in respect of hedging agreements, foreign currency exchange
obligations, and commodity futures agreements, (i) the maximum amount
of all performance and standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due by a fixed date, (k) the aggregate
amount of uncollected accounts receivable of such Person subject at
such time to a sale of receivables (or similar transaction) regardless
of whether such transaction is effected without recourse to such
Person or in a manner that would not be reflected on the balance sheet
of such Person in accordance with GAAP, and (l) all obligations of
such Person to repurchase any securities which repurchase obligation
is related to the issuance thereof, including, without limitation,
obligations commonly known as residual equity appreciation potential
shares. The Indebtedness of any Person shall include the Indebtedness
of any partnership or unincorporated joint venture in which such
Person is legally obligated.
"Indenture" means that certain Indenture dated as of October
16, 1997 among Maxim, as issuer, Maxim and certain Subsidiaries of
Maxim, as guarantors and State Street Bank and Trust Company, as
trustee, as the same may be modified, supplemented or amended from
time to time.
"Indenture Default" means the existing default by the Credit
Parties in the performance or observance of Section 1009 of the
Indenture described in Schedule 1.1(b), which default has been
disclosed to the Lenders prior to the Closing Date.
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"Intercreditor Agreement" means that certain Intercreditor
Subordination Agreement dated as of the date hereof among the Agent,
NationsBank, in its capacity as agent under the Participation
Agreement, NationsBank, in its capacity as administrative agent under
the Maxim Group Credit Agreement and NationsBank, in its capacity as
collateral agent for the Maxim Group Lenders and TROL Lenders.
"Interest Coverage Ratio" means for the three month period
ending on the last day of any fiscal quarter of the Borrower, the
ratio of (a) EBITDAR to (b) the sum of Interest Expense plus Rent
Expense.
"Interest Expense" means, for any period, with respect to the
Credit Parties and their Subsidiaries on a consolidated basis, all
interest expense, including the interest component under Capital
Leases, as determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Base Rate Loans, the
last day of each calendar month and the Maturity Date and (b) as to
Eurodollar Loans, the last day of each applicable Interest Period and
the Maturity Date, and in addition where the applicable Interest
Period for a Eurodollar Loan is greater than three months, then also
the date three months from the beginning of the Interest Period and
each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date and (c)
where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of capital stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests
or other securities of any Person or (b) any deposit with, or advance,
loan or other extension of credit to, any Person (other than deposits
made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution
to or investment in any Person, including, without limitation, any
Guaranty Obligation (including any support for a Letter of Credit
issued on behalf of such Person) incurred for the benefit of such
Person.
"Issuing Lender" means NationsBank, N.A. or any successor
Agent.
"Issuing Lender Fees" has the meaning set forth in Section
3.4(d).
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"Joinder Agreement" means a Joinder Agreement substantially
in the form of Exhibit 7.13.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Eligible Assignee which may become
a Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Letter of Credit" means any standby or trade Letter of
Credit issued for the account of a Credit Party by the Issuing Lender
pursuant to Section 2.2 hereof, as such Letter of Credit may be
amended, modified, extended, renewed or replaced.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority or charge of any kind, including,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, and any lease in
the nature thereof.
"Loan" or "Loans" means the Revolving Loans (or a portion of
any Revolving Loan), individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender
to issue Letters of Credit for the account of a Credit Party in an
aggregate face amount any time outstanding (together with the amounts
of any unreimbursed drawings thereon) of up to the LOC Committed
Amount.
"LOC Committed Amount" means TWO MILLION DOLLARS ($2,000,000).
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned
or at risk or (b) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (b) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"LOC Participants" means the Lenders.
"London Interbank Offered Rate" means, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate
of interest per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor
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page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified
on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not
available, the term "London Interbank Offered Rate" shall mean, with
respect to any Eurodollar Loan for the Interest Period applicable
thereto, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 A.M. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"Mandatory Borrowing" has the meaning set forth in Section
2.2(e).
"Material Adverse Effect" means a material adverse effect on
(a) the operations, financial condition, business or prospects of the
Credit Parties and their Subsidiaries taken as a whole, (b) the
ability of a Credit Party to perform its obligations under this Credit
Agreement or any of the other Credit Documents, or (c) the validity or
enforceability of this Credit Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or
thereunder taken as a whole.
"Maturity Date" means November 24, 1999.
"Maxim" means The Maxim Group, Inc., a Delaware corporation.
"Maxim Group Credit Agreement" means that certain Credit
Agreement, dated as of the date hereof, among Maxim, certain
subsidiaries of Maxim, the lenders party thereto and NationsBank, as
agent, as amended, modified, supplemented or restated from time to
time.
"Maxim Group Lenders" means the Lenders (as defined in the
Maxim Group Credit Agreement).
"Maxim Group Loans" means the Loans (as defined in the Maxim
Group Credit Agreement).
"Maxim Group Revolving Committed Amount" means the Revolving
Committed Amount (as defined in the Maxim Group Credit Agreement).
"Maxim Group Revolving LOC Obligations" means the Revolving
LOC Obligations (as defined in the Maxim Group Credit Agreement).
"Maxim Group Stand Alone LOC Obligations" means the Stand
Alone LOC Obligations (as defined in the Maxim Group Credit
Agreement).
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"Monogram" means Monogram Credit Card Bank of Georgia.
"Monogram Program" means any program established by Monogram
under which Monogram may extend credit to certain customers of
Borrower and C&S Textiles, Inc. for the purchase of goods, services
and other products from the Borrower and C&S Textiles, Inc.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan covered by Title IV of
ERISA which is a multiemployer plan as defined in Section 3(37) or
4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of
ERISA, other than a Multiemployer Plan, which any Credit Party or any
of its Subsidiaries or any ERISA Affiliate and at least one employer
other than a Credit Party or any of its Subsidiaries or any ERISA
Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. or any successor
thereto.
"Net Cash Proceeds" means the aggregate cash proceeds
received from an Asset Disposition, an Equity Issuance or a Debt
Issuance net of (a) reasonable transaction costs payable to third
parties, and (b) taxes paid or a good faith estimate of the taxes
payable with respect to such proceeds.
"Net Income" means, for any period, the net income after
taxes for such period of the Credit Parties and their Subsidiaries on
a consolidated basis, as determined in accordance with GAAP.
"Net Worth" means, as of any date, shareholders' equity or
net worth of the Credit Parties and their Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"NMS" means NationsBanc Xxxxxxxxxx Securities LLC.
"Non-Excluded Taxes" has the meaning set forth in Section
3.13.
"Note" or "Notes" means the Revolving Notes, individually or
collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a
Revolving Loan, in the form of Exhibit 2.1(b).
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"Notice of Continuation/Conversion" means a request by the
Borrower to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.3.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Parent" means Maxim Retail Group, Inc., a Delaware
corporation.
"Participation Agreement" means that certain Participation
Agreement dated as of November 25, 1998 among Maxim, as construction
agent and lessee, the guarantors party thereto, First Security Bank,
National Association, as owner trustee, the lenders identified
therein, as holders, the lenders identified therein, as lenders and
NationsBank, as agent, as amended or modified from time to time.
"Participation Interest" means the Extension of Credit by a
Lender by way of a purchase of a participation in Letters of Credit or
LOC Obligations as provided in Section 2.2 or in any Loans as provided
in Section 2.3 or Section 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or made
in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (c) inventory, raw materials,
furniture, fixtures, equipment and general intangibles acquired in the
ordinary course of business, (d) subject to the terms of Section 8.14
and 8.16, leasehold improvements acquired in the ordinary course of
business, (e) Investments by a Credit Party in another Credit Party,
(f) loans to directors, officers or employees in the ordinary course
of business for reasonable business expenses, not to exceed, in the
aggregate, $250,000 at any one time; (g) Investments by a Credit Party
in Maxim or any of its Subsidiaries (other than a Credit Party) in an
amount not to exceed, in the aggregate, $5,000,000 at any one time and
(h) other Investments (in addition to those set forth above) not to
exceed, in the aggregate, $250,000 at any one time.
"Permitted Liens" means (a) Liens securing Credit Party
Obligations, (b) Liens securing the obligations of the Credit Parties
under the Maxim Group Credit Agreement and the Credit Documents (as
defined in the Maxim Group Credit Agreement), (c) Liens for taxes not
yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
property subject to any such Lien is not yet subject to foreclosure,
sale, collection, levy or loss on account thereof), (d) Liens in
respect of property imposed by law arising in the ordinary course of
business such as materialmen's,
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mechanics', warehousemen's, carrier's, landlords' and other
nonconsensual statutory Liens which are not yet due and payable or
which are being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof), (e)
pledges or deposits made in the ordinary course of business to secure
payment of worker's compensation insurance, unemployment insurance,
pensions or social security programs, (f) Liens arising from good
faith deposits in connection with or to secure performance of tenders,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of
business (other than obligations in respect of the payment of borrowed
money), (g) Liens arising from good faith deposits in connection with
or to secure performance of statutory obligations and surety and
appeal bonds, (h) easements, rights-of-way, restrictions (including
zoning restrictions), matters of plat, minor defects or irregularities
in title and other similar charges or encumbrances not, in any
material respect, impairing the use of the encumbered property for its
intended purposes, (i) judgment Liens that would not constitute an
Event of Default, (j) Liens in connection with Indebtedness permitted
by Section 8.1(e), (k) Liens arising by virtue of any statutory or
common law provision relating to banker's liens, rights of setoff or
similar rights as to deposit accounts or other funds maintained with a
creditor depository institution and (l) Liens existing on the date
hereof and identified on Schedule 1.1(c); provided that no such Lien
shall extend to any property other than the property subject thereto
on the Closing Date.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Credit Party or any of its Subsidiaries or any ERISA Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section
3(5) of ERISA.
"Pledge Agreements" means any pledge agreement executed and
delivered by a Credit Party in favor of the Agent, for the benefit of
the Lenders, to secure its obligations under the Credit Documents, as
amended, modified, extended, renewed or replaced from time to time.
"Prime Rate" means the per annum rate of interest established
from time to time by the Agent at its principal office in Charlotte,
North Carolina (or such other principal office of the Agent as
communicated in writing to the Borrower and the Lenders) as its Prime
Rate. Any change in the interest rate resulting from a change in the
Prime Rate shall become effective as of 12:01 a.m. of the Business Day
on which each change in the Prime Rate is announced by the Agent. The
Prime Rate is a reference rate used by the Agent in determining
interest rates on certain loans and is not intended to be the lowest
rate of interest charged on any extension of credit to any debtor.
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"Real Properties" means the real properties that the Credit
Parties may own or lease (as lessee or sublessee) from third parties
from time to time.
"Regulation D, U, or X" means Regulation D, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Rent Expense" means, for any period, with respect to the
Credit Parties and their Subsidiaries on a consolidated basis, all
rent payable under an operating lease (whether a lease of real
property, personal property or mixed), as determined in accordance
with GAAP.
"Reportable Event" means a "reportable event" as defined in
Section 4043 of ERISA with respect to which the notice requirements to
the PBGC have not been waived.
"Required Lenders" means a minimum of two (2) Lenders whose
aggregate Credit Exposure (as hereinafter defined) constitutes more
than 66 2/3% of the Credit Exposure of all Lenders at such time;
provided, however, that if any Lender shall be a Defaulting Lender at
such time then there shall be excluded from the determination of
Required Lenders the aggregate principal amount of Credit Exposure of
such Lender at such time. For purposes of the preceding sentence, the
term "Credit Exposure" as applied to each Lender shall mean (a) at any
time prior to the termination of the Commitments, the Revolving Loan
Commitment Percentage of such Lender multiplied by the Revolving
Committed Amount and (b) at any time after the termination of the
Commitments, the sum of (i) the principal balance of the outstanding
Loans of such Lender plus (ii) such Lender's Participation Interests
in the face amount of the outstanding Letters of Credit.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Revolving Committed Amount" means FIFTEEN MILLION DOLLARS
($15,000,000) or such lesser amount as the Revolving Committed Amount
may be reduced pursuant to Section 2.1(d) or 3.3(c).
"Revolving Loan Commitment" means, with respect to each
Lender, the commitment of such Lender to make its portion of the
Revolving Loans in a principal amount equal to such Lender's Revolving
Loan Commitment Percentage of the Revolving Committed Amount.
"Revolving Loan Commitment Percentage" means, for each
Lender, the percentage identified as its Revolving Loan Commitment
Percentage on Schedule 1.1(a), as such
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percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Revolving Loans" means the Revolving Loans made to the
Borrower pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1, individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to
time and as evidenced in the form of Exhibit 2.1(f).
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. or any successor or assignee of the
business of such division in the business of rating securities.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Security Agreements" means any security agreement executed
and delivered by a Credit Party in favor of the Agent for the benefit
of the Lenders to secure its obligations under the Credit Documents,
as such may be amended, modified, extended, renewed, restated or
replaced from time to time.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to pay its
debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (b) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature in their ordinary course, (c) such Person is
not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such Person is
engaged or is to engage, (d) the fair value of the assets of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (e) the
present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Standby Letter of Credit Fees" has the meaning set forth in
Section 3.4(b).
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"Subordinated Debt" means the Indebtedness evidenced by the
Indenture or by the guarantees thereof in an aggregate amount not to
exceed $100,000,000.
"Subordinated Guarantees" means the guarantee obligations of
the Credit Parties evidenced by the Indenture.
"Subsidiary" means, as to any Person, (a) any corporation
more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the
time, any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint venture or
other entity in which such person directly or indirectly through
Subsidiaries has more than a 50% equity interest at any time.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease.
"Termination Event" means (a) with respect to any Single
Employer Plan, the occurrence of a Reportable Event or the substantial
cessation of operations (within the meaning of Section 4062(e) of
ERISA); (b) the withdrawal of any Credit Party or any of its
Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan; (c) the distribution of a notice of intent
to terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA; (e) any event or condition which might
reasonably constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; or (f) the complete or partial withdrawal of any Credit Party or
any of its Subsidiaries or any ERISA Affiliate from a Multiemployer
Plan.
"Total Assets" means all items which in accordance with GAAP
would be classified as assets of the Borrower and its Subsidiaries on
a consolidated basis.
"Trade Letter of Credit Fees" has the meaning set forth in
Section 3.4(c).
"TROL Lenders" means the lenders, holders and other Financing
Parties (as defined in the Participation Agreement) from time to time
party to the Participation Agreement.
"Unused Commitment" means, for any period, the amount by
which (a) the then applicable aggregate Revolving Committed Amount
exceeds (b) the daily average sum for
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such period of the outstanding aggregate principal amount of all
Revolving Loans plus the aggregate amount of LOC Obligations
outstanding.
"Voting Stock" of a corporation means all classes of the
capital stock of such corporation then outstanding and normally
entitled to vote in the election of directors.
"Year 2000 Problem" means any risk that any computer
hardware, software or other equipment used by a Credit Party or any of
its Subsidiaries will not function as effectively and reliably on and
after January 1, 2000 as it does prior to January 1, 2000, to the
extent such risk would cause or be reasonably expected to cause a
Material Adverse Effect.
1.2 Computation of Time Periods and Other Definitional
Provisions.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Agreement unless otherwise specifically provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section
7.1, consistent with the financial statements described in Section 5.1(d);
provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Agent or the Required Lenders shall so object in writing within 30 days
after delivery of such financial statements, then such calculations shall be
made on a basis consistent with GAAP as in effect as of the date of the most
recent financial statements delivered by the Borrower to the Lenders to which
no such objection shall have been made.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each Lender severally agrees to make
revolving loans (each a "Revolving Loan" and
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collectively the "Revolving Loans") to the Borrower, in Dollars, at
any time and from time to time, during the period from and including
the Effective Date to but not including the Maturity Date (or such
earlier date if the Revolving Committed Amount has been terminated as
provided herein); provided, however, that (i) the sum of the aggregate
amount of Revolving Loans outstanding plus the aggregate amount of LOC
Obligations outstanding shall not exceed the lesser of (A) the
Revolving Committed Amount and (B) the Borrowing Base Assets and (ii)
with respect to each individual Lender, the Lender's pro rata share of
outstanding Revolving Loans plus such Lender's pro rata share of
outstanding LOC Obligations shall not exceed such Lender's Revolving
Loan Commitment Percentage of the lesser of (A) the Revolving
Committed Amount and (B) the Borrowing Base Assets. Subject to the
terms of this Credit Agreement (including Section 3.3), the Borrower
may borrow, repay and reborrow Revolving Loans.
(b) Method of Borrowing for Revolving Loans. By no later
than 11:00 a.m. (i) on the date of the requested borrowing of
Revolving Loans that will be Base Rate Loans or (ii) three Business
Days prior to the date of the requested borrowing of Revolving Loans
that will be Eurodollar Loans, the Borrower shall telephone the Agent
with the information described below as well as submit a written
Notice of Borrowing in the form of Exhibit 2.1(b) to the Agent setting
forth (A) the amount requested, (B) whether such Revolving Loans shall
accrue interest at the Adjusted Base Rate or the Adjusted Eurodollar
Rate, (C) with respect to Revolving Loans that will be Eurodollar
Loans, the Interest Period applicable thereto and (D) certification
that the Borrower has complied in all respects with Section 5.2. All
Revolving Loans made on the Effective Date shall be Base Rate Loans.
Thereafter, all or any portion of such Revolving Loans may be
converted into Eurodollar Loans in accordance with the terms of
Section 2.3.
(c) Funding of Revolving Loans. Upon receipt of a Notice
of Borrowing, the Agent shall promptly inform the Lenders as to the
terms thereof. Each Lender shall make its Revolving Loan Commitment
Percentage of the requested Revolving Loans available to the Agent by
1:00 p.m. on the date specified in the Notice of Borrowing by deposit,
in Dollars, of immediately available funds at the offices of the Agent
at its principal office in Charlotte, North Carolina or at such other
address as the Agent may designate in writing. The amount of the
requested Revolving Loans will then be made available to the Borrower
by the Agent by crediting the account of the Borrower on the books of
such office of the Agent, to the extent the amount of such Revolving
Loans are made available to the Agent.
No Lender shall be responsible for the failure or delay by
any other Lender in its obligation to make Revolving Loans hereunder;
provided, however, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Agent shall have been notified by
any Lender prior to the date of any such Revolving Loan that such
Lender does not intend to make available to the Agent its portion of
the Revolving Loans to be made on such date, the Agent may assume that
such Lender has made such amount available to the Agent on the date of
such Revolving Loans, and the Agent in reliance upon such assumption,
may (in its sole discretion but without any obligation to do so) make
available to the Borrower a
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corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor,
the Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent
shall also be entitled to recover from the Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by
the Agent to the Borrower to the date such corresponding amount is
recovered by the Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for such Revolving Loan pursuant to
the Notice of Borrowing and (ii) from a Lender at the Federal Funds
Rate.
(d) Reductions of Revolving Committed Amount. Upon at
least three Business Days' notice, the Borrower shall have the right
to permanently reduce, without premium or penalty, all or part of the
aggregate unused amount of the Revolving Committed Amount at any time
or from time to time; provided that (i) each partial reduction shall
be in an aggregate amount at least equal to $1,000,000 and in integral
multiples of $500,000 above such amount and (ii) no reduction shall be
made which would reduce the Revolving Committed Amount to an amount
less than the aggregate amount of outstanding Revolving Loans plus the
aggregate amount of outstanding LOC Obligations. Any reduction in (or
termination of) the Revolving Committed Amount shall be permanent and
may not be reinstated. The Agent shall immediately notify the Lenders
of any reduction in the Revolving Committed Amount.
(e) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of
Base Rate Loans, such Base Rate Loans shall bear interest at
a per annum rate equal to the Adjusted Base Rate.
(ii) Eurodollar Loans.During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest
at a per annum rate equal to the Adjusted Eurodollar Rate.
(f) Revolving Notes. The Revolving Loans made by each
Lender shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in an original principal amount equal to such
Lender's Revolving Loan Commitment Percentage of the Revolving
Committed Amount and in substantially the form of Exhibit 2.1(f).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and conditions
which the Issuing Lender may reasonably require and in reliance upon
the representations and warranties set forth herein, the Issuing
Lender shall from time to time upon request issue (from the Effective
Date to
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the Maturity Date and in a form reasonably acceptable to the Issuing
Lender), in Dollars, and the LOC Participants shall participate in,
the Letters of Credit for the account of a Credit Party; provided,
however, that (i) the aggregate amount of LOC Obligations shall not at
any time exceed the LOC Committed Amount, (ii) the sum of the
aggregate amount of LOC Obligations outstanding plus the Revolving
Loans outstanding shall not exceed the lesser of (A) the Revolving
Committed Amount and (B) the Borrowing Base Assets and (iii) with
respect to each individual LOC Participant, the LOC Participant's pro
rata share of outstanding Revolving Loans plus its pro rata share of
outstanding LOC Obligations shall not exceed such LOC Participant's
Revolving Loan Commitment Percentage of the lesser of (A) the
Revolving Committed Amount and (B) the Borrowing Base Assets. The
Issuing Lender may require the issuance and expiry date of each Letter
of Credit to be a Business Day. Each Letter of Credit shall be a
standby or trade letter of credit issued to support the obligations
(including pension or insurance obligations), contingent or otherwise,
of a Credit Party or any of its Subsidiaries. Except as otherwise
expressly agreed upon by all the LOC Participants, no Letter of Credit
shall have an expiry date extending beyond the Maturity Date. Each
Letter of Credit shall comply with the related LOC Documents.
(b) Notice and Reports. The request for the issuance of
a Letter of Credit shall be submitted to the Issuing Lender at least
three Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon
request, provide to the Agent for dissemination to the Lenders a
detailed report specifying the Letters of Credit which are then issued
and outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the account party, the beneficiary, the face
amount, and the expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to
the Agent, promptly upon request, copies of the Letters of Credit and
the other LOC Documents. Notwithstanding anything to the contrary set
forth in this Credit Agreement, with respect to any Letter of Credit
issued for the account of a Credit Party other than the Borrower, the
Borrower shall be the actual account party for all purposes of this
Credit Agreement for such Letter of Credit and the Borrower shall have
the reimbursement obligations hereunder with respect to such Letter of
Credit.
(c) Participations.
(i) Each LOC Participant, upon issuance of a
Letter of Credit, shall be deemed to have purchased without
recourse a risk participation from the Issuing Lender in such
Letter of Credit and each LOC Document related thereto and
the rights and obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal
to its Revolving Loan Commitment Percentage of the
obligations under such Letter of Credit, and shall
absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and be obligated to pay to
the Issuing Lender therefor and discharge when due, its
Revolving Loan Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the
scope and nature of each LOC Participant's participation in
any Letter of Credit, to the extent that the Issuing Lender
has not been reimbursed as
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required hereunder or under any such Letter of Credit, each
such LOC Participant shall pay to the Issuing Lender its
Revolving Loan Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the
Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) or (e) hereof. The obligation of
each LOC Participant to so reimburse the Issuing Lender shall
be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve
or otherwise impair the obligation of the Borrower or any
other Credit Party to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter
provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the
Borrower. Unless the Borrower shall immediately notify the Issuing
Lender of its intent to otherwise reimburse the Issuing Lender, the
Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection
(e) below on the related Letter of Credit, the proceeds of which will
be used to satisfy the related reimbursement obligations. The Borrower
shall reimburse the Issuing Lender on the day of drawing under any
Letter of Credit with the proceeds of such Revolving Loan obtained
hereunder or otherwise in same day funds as provided herein or in the
LOC Documents. If the Borrower shall fail to reimburse the Issuing
Lender as provided hereinabove, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the Adjusted
Base Rate plus two percent (2%). The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of (but without waiver of) any rights of
set-off, counterclaim or defense to payment the applicable account
party or the Borrower may claim or have against an Issuing Lender, the
Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon
or any other Person, including without limitation, any defense based
on any failure of the applicable account party, the Borrower or any
other Credit Party to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the LOC Participants of the amount of any
unreimbursed drawing and each LOC Participant shall promptly pay to
the Issuing Lender, in Dollars and in immediately available funds, the
amount of such LOC Participant's Revolving Loan Commitment Percentage
of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such
notice is received at or before 12:00 Noon, otherwise such payment
shall be made at or before 12:00 Noon on the Business Day next
succeeding the day such notice is received. If such LOC Participant
does not pay such amount to the Issuing Lender in full upon such
request, such LOC Participant shall, on demand, pay to the Issuing
Lender interest on the unpaid amount during the period from the date
the LOC Participant received the notice regarding the unreimbursed
drawing until such LOC Participant pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two
Business Days of the date of drawing, the Federal Funds Rate and
thereafter at a rate equal to the Base Rate. Each LOC Participant's
obligation to make such payment to the Issuing Lender, and the right
of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever
and without regard to
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the termination of this Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration of
the obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with
the making of each such payment by a LOC Participant to the Issuing
Lender, such LOC Participant shall, automatically and without any
further action on the part of the Issuing Lender or such LOC
Participant, acquire a participation in an amount equal to such
payment (excluding the portion of such payment constituting interest
owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower and
the other Credit Parties with respect thereto.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan borrowing to reimburse a drawing under a Letter of
Credit (as set forth in clause (d) above), the Agent shall give notice
to the applicable Lenders that a Revolving Loan has been requested or
deemed requested in connection with a drawing under a Letter of
Credit, in which case a Revolving Loan borrowing comprised solely of
Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall
be immediately made from all applicable Lenders (without giving effect
to any termination of the Commitments pursuant to Section 9.2) pro
rata based on each Lender's respective Revolving Loan Commitment
Percentage and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each
such Lender hereby irrevocably agrees to make such Revolving Loans
immediately upon any such request or deemed request on account of each
such Mandatory Borrowing in the amount and in the manner specified in
the preceding sentence and on the same such date notwithstanding (i)
the amount of Mandatory Borrowing may not comply with the minimum
amount for borrowings of Revolving Loans otherwise required hereunder,
(ii) whether any conditions specified in Section 5.2 are then
satisfied, (iii) whether a Default or Event of Default then exists,
(iv) failure of any such request or deemed request for Revolving Loans
to be made by the time otherwise required hereunder, (v) the date of
such Mandatory Borrowing, or (vi) any reduction in the Revolving
Committed Amount or any termination of the Commitments. In the event
that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each such
Lender hereby agrees that it shall forthwith fund (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and
prior to such purchase) its Participation Interest in the outstanding
LOC Obligations; provided, further, that in the event any Lender shall
fail to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if
paid within two Business Days of such date, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.
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(f) Modification and Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Letter of Credit shall, for purposes hereof, be treated in all
respects the same as the issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender
may have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of issue
by the International Chamber of Commerce (Publication No. 500 or the
most recent publication, the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part thereof.
(h) Responsibility of Issuing Lender. It is expressly
understood and agreed as between the Lenders that the obligations of
the Issuing Lender hereunder to the LOC Participants are only those
expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set
forth in Section 5.2 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been
satisfied; provided, however, that nothing set forth in this Section
2.2 shall be deemed to prejudice the right of any LOC Participant to
recover from the Issuing Lender any amounts made available by such LOC
Participant to the Issuing Lender pursuant to this Section 2.2 in the
event that it is determined by a court of competent jurisdiction that
the payment with respect to a Letter of Credit constituted gross
negligence or willful misconduct on the part of the Issuing Lender.
(i) Conflict with LOC Documents. In the event of any
conflict between this Credit Agreement and any LOC Document, this
Credit Agreement shall govern.
(j) Indemnification of Issuing Lender.
(i) In addition to its other obligations under
this Credit Agreement, the Borrower hereby agrees to protect,
indemnify, pay and save the Issuing Lender harmless from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as
a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto
Governmental Authority (all such acts or omissions, herein
called "Government Acts").
(ii) As between the Borrower and the Issuing
Lender, the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be
responsible for: (A) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for
and issuance of any Letter of Credit, even if it should in
fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
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Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of
a Letter of Credit to comply fully with conditions required
in order to draw upon a Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (G) any consequences arising from
causes beyond the control of the Issuing Lender, including,
without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing
Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or
in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not
put the Issuing Lender under any resulting liability to the
Borrower or any other Credit Party. It is the intention of
the parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against
any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the
Borrower, including, without limitation, any and all risks of
the acts or omissions, whether rightful or wrongful, of any
present or future Government Acts. The Issuing Lender shall
not, in any way, be liable for any failure by the Issuing
Lender or anyone else to pay any drawing under any Letter of
Credit as a result of any Government Acts or any other cause
beyond the control of the Issuing Lender.
(iv) Nothing in this Subsection (j) is intended
to limit the reimbursement obligation of the Borrower
contained in this Section 2.2. The obligations of the
Borrower under this subsection (j) shall survive the
termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall
in any way affect or impair the rights of the Issuing Lender
to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (j), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender arising solely out
of the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction.
(vi) To the extent the Borrower does not fulfill
any or all of its obligations under this subsection (j), each
LOC Participant agrees to reimburse the Issuing Lender for
any losses incurred thereby ratably in accordance with each
such LOC Participant's Revolving Loan Commitment Percentage.
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2.3 Continuations and Conversions.
The Borrower shall have the option, on any Business Day, to continue
existing Eurodollar Loans for a subsequent Interest Period, to convert Base
Rate Loans into Eurodollar Loans or to convert Eurodollar Loans into Base Rate
Loans; provided, however, that (i) each such continuation or conversion must be
requested by the Borrower pursuant to a written Notice of
Continuation/Conversion, in the form of Exhibit 2.3, in compliance with the
terms set forth below, (ii) except as provided in Section 3.11, Eurodollar
Loans may only be continued or converted into Base Rate Loans on the last day
of the Interest Period applicable thereto, (iii) Eurodollar Loans may not be
continued nor may Base Rate Loans be converted into Eurodollar Loans during the
existence and continuation of a Default or an Event of Default and (iv) any
request to continue a Eurodollar Loan that fails to comply with the terms
hereof or any failure to request a continuation of a Eurodollar Loan at the end
of an Interest Period shall constitute a conversion to a Base Rate Loan on the
last day of the applicable Interest Period. Each continuation or conversion
must be requested by the Borrower no later than 11:00 a.m. (A) on the date for
a requested conversion of a Eurodollar Loan to a Base Rate Loan or (B) three
Business Days prior to the date for a requested continuation of a Eurodollar
Loan or conversion of a Base Rate Loan to a Eurodollar Loan, in each case
pursuant to a written Notice of Continuation/Conversion submitted to the Agent
which shall set forth (x) whether the Borrower wishes to continue or convert
such Loans and (y) if the request is to continue a Eurodollar Loan or convert a
Base Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto.
2.4 Minimum Amounts.
Each request for a borrowing, conversion or continuation shall be
subject to the requirements that (a) each Eurodollar Loan shall be in a minimum
amount of $2,000,000 and in integral multiples of $100,000 in excess thereof,
(b) each Base Rate Loan shall be in a minimum amount of the lesser of $500,000
(and integral multiples of $100,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount and (c) no more than five (5)
Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section, all Eurodollar Loans with the same Interest Periods
that begin and end on the same date shall be considered as one Eurodollar Loan,
but Eurodollar Loans with different Interest Periods, even if they begin on the
same date, shall be considered as separate Eurodollar Loans.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 Interest.
(a) Default Rate of Interest. Upon the occurrence, and
during the continuance, of an Event of Default, the principal of and,
to the extent permitted by law, interest on the Loans and any other
amounts owing hereunder or under the other Credit Documents (including
without limitation fees and expenses) shall bear interest, payable on
demand, at a
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per annum rate equal to 2% plus the rate which would otherwise be
applicable (or if no rate is applicable, then the Adjusted Base Rate
plus two percent (2%) per annum).
(b) Interest Payments. Interest on Loans shall be due
and payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding
Business Day, except that in the case of Eurodollar Loans where the
next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts
to be made by a Credit Party under this Credit Agreement shall be received not
later than 2:00 p.m. on the date when due, in Dollars and in immediately
available funds, by the Agent at its offices in Charlotte, North Carolina.
Payments received after such time shall be deemed to have been received on the
next Business Day. The Borrower shall, at the time it makes any payment under
this Credit Agreement, specify to the Agent, the Loans, Letters of Credit, fees
or other amounts payable by the Borrower hereunder to which such payment is to
be applied (and in the event that it fails to specify, or if such application
would be inconsistent with the terms hereof, the Agent shall, subject to
Section 3.7, distribute such payment to the Lenders in such manner as the Agent
may deem appropriate). The Agent will distribute such payments to the
applicable Lenders on the same Business Day if any such payment is received
prior to 2:00 p.m.; otherwise the Agent will distribute such payment to the
applicable Lenders on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and fees for the period of such extension), except that
in the case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead be
made on the next preceding Business Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time without
premium or penalty; provided, however, that (i) Eurodollar Loans may
only be prepaid on three Business Days' prior written notice to the
Agent and (ii) each such partial prepayment of Loans shall be in the
minimum principal amount of $1,000,000 and integral multiples of
$500,000 in excess thereof. All prepayments under this Section shall
be subject to Section 3.14 and be accompanied by interest on the
principal amount prepaid through the date of prepayment.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time
the sum of the aggregate amount of Revolving Loans
outstanding plus LOC Obligations outstanding exceeds the
lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base Assets, the Borrower shall immediately make a
principal payment
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to the Agent in the manner and in an amount such that the sum
of the aggregate amount of Revolving Loans outstanding plus
LOC Obligations outstanding is less than or equal to the
lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base Assets (to be applied as set forth in Section
3.3(c) below).
(ii) Asset Sales. Immediately upon receipt by a
Credit Party or any of its Subsidiaries of proceeds from any
Asset Disposition, the Borrower shall forward an amount equal
to 100% of the Net Cash Proceeds of such Asset Disposition to
the Lenders and the Maxim Group Lenders as a prepayment of
the Loans and Maxim Group Loans (to be applied as set forth
in Section 3.3(c) below).
(iii) Issuances of Equity. Immediately upon
receipt by a Credit Party or any of its Subsidiaries of cash
proceeds from any Equity Issuance, the Borrower shall forward
100% of the Net Cash Proceeds of such Equity Issuance to the
Lenders and Maxim Group Lenders as a prepayment of the Loans
and Maxim Group Loans (to be applied as set forth in Section
3.3(c) below).
(iv) Issuance of Debt. Immediately upon receipt
by a Credit Party or any of its Subsidiaries of proceeds from
any Debt Issuance, the Borrower shall forward 100% of the Net
Cash Proceeds of such Debt Issuance to the Lenders and the
Maxim Group Lenders as a prepayment of the Loans and Maxim
Group Loans (to be applied as set forth in Section 3.3(c)
below).
(c) Application of Prepayments. All amounts required to
be paid pursuant to Section 3.3(b)(i) shall be applied first to
Revolving Loans and second to a cash collateral account in respect of
LOC Obligations. All amounts required to be paid pursuant to Sections
3.3(b)(ii), (iii) and (iv) above shall be applied first pro rata among
the Revolving Loans (with a corresponding permanent reduction in the
Revolving Committed Amount) and the Maxim Group Loans (with a
corresponding permanent reduction in the Maxim Group Revolving
Committed Amount), and second, pro rata to a cash collateral account
in respect of the LOC Obligations and a cash collateral account in
respect of the Maxim Group Revolving LOC Obligations and the Maxim
Group Stand Alone LOC Obligations. Within the parameters of the
applications set forth above, prepayments shall be applied first to
Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. All prepayments hereunder shall be subject
to Section 3.14 and shall be accompanied by interest on the principal
amount prepaid through the date of prepayment.
3.4 Fees.
(a) Commitment Fees. In consideration of the Revolving
Committed Amount being made available by the Lenders hereunder, the
Borrower agrees to pay to the Agent, for the pro rata benefit of each
Lender (based on each Lender's Revolving Loan Commitment Percentage of
the Revolving Committed Amount), a fee equal to 0.375% per annum on
the Unused Commitment (the "Commitment Fees"). The Commitment Fees
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shall commence to accrue on the Effective Date and shall be due and
payable in arrears on the last day of each fiscal quarter of the
Borrower (as well as on the Maturity Date and on any date that the
Revolving Committed Amount is reduced) for the immediately preceding
fiscal quarter (or portion thereof), beginning with the first of such
dates to occur after the Closing Date.
(b) Standby Letter of Credit Fee. In consideration of
the issuance of standby Letters of Credit hereunder, the Borrower
agrees to pay to the Issuing Lender for the pro rata benefit of each
Lender (based on each Lender's Revolving Loan Commitment Percentage of
the Revolving Committed Amount), a per annum fee (the "Standby Letter
of Credit Fees") equal to 2.0% on the average daily maximum amount
available to be drawn under each such Letter of Credit from the date
of issuance to the date of expiration. The Standby Letter of Credit
Fees will be payable in arrears on the last day of each fiscal quarter
of the Borrower (as well as on the Maturity Date) for the immediately
preceding fiscal quarter (or portion thereof), beginning with the
first of such dates to occur after the Closing Date.
(c) Trade Letter of Credit Fee. In consideration of the
issuance of trade Letters of Credit hereunder, the Borrower agrees to
pay to the Issuing Lender for the pro rata benefit of each Lender
(based on each Lender's Revolving Loan Commitment Percentage of the
Revolving Committed Amount) a per annum fee (the "Trade Letter of
Credit Fees") equal to 0.375% on the average daily maximum amount
available to be drawn under each such Letter of Credit from the date
of issuance to the date of expiration. The Trade Letter of Credit Fees
will be payable in arrears on the last day of each fiscal quarter of
the Borrower (as well as on the Maturity Date) for the immediately
preceding fiscal quarter (or portion thereof), beginning with the
first of such dates to occur after the Closing Date.
(d) Issuing Lender Fees. In addition to the Standby
Letter of Credit Fees payable pursuant to clause (b) above and the
Trade Letter of Credit Fees payable pursuant to clause (c) above, the
Borrower shall pay to the Issuing Lender for its own account, without
sharing by the other Lenders, (i) the customary charges from time to
time to the Issuing Lender for its services in connection with the
issuance, amendment, payment, transfer, administration, cancellation
and conversion of, and drawings under, Letters of Credit, and (ii) a
letter of credit fronting fee of 0.125% of the face amount of each
Letter of Credit (collectively, the "Issuing Lender Fees").
(e) Administrative Fees. The Borrower agrees to pay to
the Agent, for its own account, an annual fee in accordance with the
terms of the Fee Letter.
3.5 Payment in full at Maturity.
On the Maturity Date, the entire outstanding principal balance of all
Loans and all LOC Obligations, together with accrued but unpaid interest and
all other sums owing with respect thereto, shall be due and payable in full,
unless accelerated sooner pursuant to Section 9.2.
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3.6 Computations of Interest and Fees.
(a) Except for Base Rate Loans, in which case interest
shall be computed on the basis of a 365 or 366 day year as the case
may be, all computations of interest and fees hereunder shall be made
on the basis of the actual number of days elapsed over a year of 360
days. Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit
Parties to conform to and contract in strict compliance with
applicable usury law from time to time in effect. All agreements
between the Lenders and the Credit Parties are hereby limited by the
provisions of this paragraph which shall override and control all such
agreements, whether now existing or hereafter arising and whether
written or oral. In no way, nor in any event or contingency (including
but not limited to prepayment or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the
Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such
construction shall be subject to the provisions of this paragraph and
such documents shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the
necessity of execution of any amendment or new document. If any Lender
shall ever receive anything of value which is characterized as
interest on the Loans under applicable law and which would, apart from
this provision, be in excess of the maximum lawful amount, an amount
equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount
owing on the Loans and not to the payment of interest, or refunded to
the Borrower or the other payor thereof if and to the extent such
amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any
other indebtedness evidenced by any of the Credit Documents does not
include the right to accelerate the payment of any interest which has
not otherwise accrued on the date of such demand, and the Lenders do
not intend to charge or receive any unearned interest in the event of
such demand. All interest paid or agreed to be paid to the Lenders
with respect to the Loans shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full
stated term (including any renewal or extension) of the Loans so that
the amount of interest on account of such indebtedness does not exceed
the maximum nonusurious amount permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing (including,
without limitation, each Mandatory Borrowing), each payment or
prepayment of principal of any Loan, each payment of fees (other than
the Issuing Lender Fees retained by the Issuing Lender for its
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own account and the fees retained by the Agent for its own account),
each reduction of the Revolving Committed Amount, and each conversion
or continuation of any Loan, shall (except as otherwise provided in
Section 3.11) be allocated pro rata among the relevant Lenders in
accordance with the respective Revolving Loan Commitment Percentages
of such Lenders (or, if the Commitments of such Lenders have expired
or been terminated, in accordance with the respective principal
amounts of the outstanding Loans and Participation Interests of such
Lenders); provided that, if any Lender shall have failed to pay its
applicable pro rata share of any Revolving Loan, then any amount to
which such Lender would otherwise be entitled pursuant to this
subsection (a) shall instead be payable to the Agent until the share
of such Loan not funded by such Lender has been repaid; provided
further, that in the event any amount paid to any Lender pursuant to
this subsection (a) is rescinded or must otherwise be returned by the
Agent, each Lender shall, upon the request of the Agent, repay to the
Agent the amount so paid to such Lender, with interest for the period
commencing on the date such payment is returned by the Agent until the
date the Agent receives such repayment at a rate per annum equal to,
during the period to but excluding the date two Business Days after
such request, the Federal Funds Rate, and thereafter, the Base Rate
plus two percent (2%) per annum; and
(b) Letters of Credit. Each payment of unreimbursed
drawings in respect of LOC Obligations shall be allocated to each LOC
Participant pro rata in accordance with its Revolving Loan Commitment
Percentage; provided that, if any LOC Participant shall have failed to
pay its applicable pro rata share of any drawing under any Letter of
Credit, then any amount to which such LOC Participant would otherwise
be entitled pursuant to this subsection (b) shall instead be payable
to the Issuing Lender until the share of such unreimbursed drawing not
funded by such Lender has been repaid; provided further, that in the
event any amount paid to any LOC Participant pursuant to this
subsection (b) is rescinded or must otherwise be returned by the
Issuing Lender, each LOC Participant shall, upon the request of the
Issuing Lender, repay to the Agent for the account of the Issuing
Lender the amount so paid to such LOC Participant, with interest for
the period commencing on the date such payment is returned by the
Issuing Lender until the date the Issuing Lender receives such
repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal
Funds Rate, and thereafter, the Base Rate plus two percent (2%) per
annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent
otherwise provided herein, in the event that any Lender shall obtain payment in
respect of any Loan, unreimbursed drawing with respect to any LOC Obligations
or any other obligation owing to such Lender under this Credit Agreement
through the exercise of a right of setoff, banker's lien or counterclaim, or
pursuant to a secured claim under Section 506 of the Bankruptcy Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
pay in cash or purchase from the other Lenders a participation in such Loans,
LOC Obligations, and
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other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender
were a holder of such Loan, LOC Obligation or other obligation in the amount of
such participation. Except as otherwise expressly provided in this Credit
Agreement, if any Lender or the Agent shall fail to remit to the Agent or any
other Lender an amount payable by such Lender or such Agent to the Agent or
such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid
to the Agent or such other Lender at a rate per annum equal to the Federal
Funds Rate. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section 3.8 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 3.8 to share in the benefits of any recovery
on such secured claim.
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender, or its parent corporation, with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Lender's (or
parent corporation's) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender, or its parent
corporation, could have achieved but for such adoption, effectiveness, change
or compliance (taking into consideration such Lender's (or parent
corporation's) policies with respect to capital adequacy), then, upon notice
from such Lender to the Borrower, the Borrower shall be obligated to pay to
such Lender such additional amount or amounts as will compensate such Lender on
an after-tax basis (after taking into account applicable deductions and credits
in respect of the amount indemnified) for such reduction. Each determination by
any such Lender of amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties hereto. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
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3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon the Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter, and will also give prompt written notice to the
Borrower when such conditions no longer exist. If such notice is given (a) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (b) any Loans that were to have been
converted on the first day of such Interest Period to or continued as
Eurodollar Loans shall be converted to or continued as Base Rate Loans and (c)
any outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to Base Rate Loans. Until such notice is withdrawn by the
Agent, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Base Rate Loans to Eurodollar
Loans.
3.11 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Credit Agreement,
(a) such Lender shall promptly give written notice of such circumstances to the
Borrower and the Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time
as it shall no longer be unlawful for such Lender to make or maintain
Eurodollar Loans, such Lender shall then have a commitment only to make a Base
Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days or the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 3.14.
3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof
(except
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for Non-Excluded Taxes covered by Section 3.13 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Lender to comply
with its obligations under Section 3.13(b)) and changes in taxes
measured by or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of such Lender or its
applicable lending office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for
such increased cost or reduced amount receivable, provided that, in any such
case, the Borrower may elect to convert the Eurodollar Loans made by such
Lender hereunder to Base Rate Loans by giving the Agent at least one Business
Day's notice of such election, in which case the Borrower shall promptly pay to
such Lender, upon demand, without duplication, such amounts, if any, as may be
required pursuant to Section 3.14. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section 3.12, it shall provide prompt
notice thereof to the Borrower, through the Agent, certifying (x) that one of
the events described in this Section 3.12 has occurred and describing in
reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Lender and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts payable
pursuant to this Section 3.12 submitted by such Lender, through the Agent, to
the Borrower shall be conclusive and binding on the parties hereto in the
absence of manifest error. This covenant shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.13 Taxes.
(a) Except as provided below in this Section 3.13, all
payments made by the Borrower under this Credit Agreement and any
Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the net
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income of any Lender or its applicable lending office, or any branch
or affiliate thereof, and all franchise taxes, branch taxes, taxes on
doing business or taxes on the capital or net worth of any Lender or
its applicable lending office, or any branch or affiliate thereof, in
each case imposed in lieu of net income taxes: (i) by the jurisdiction
under the laws of which such Lender, applicable lending office, branch
or affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from
any amounts payable to the Agent or any Lender hereunder or under any
Notes, (A) the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in
this Credit Agreement and any Notes, provided, however, that the
Borrower shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable
to any Lender that is not organized under the laws of the United
States of America or a state thereof if such Lender fails to comply
with the requirements of paragraph (b) of this Section 3.13 whenever
any Non-Excluded Taxes are payable by the Borrower, and (B) as
promptly as possible after requested the Borrower shall send to the
Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and any
Lender for any incremental Non-Excluded Taxes, interest or penalties
that may become payable by the Agent or any Lender as a result of any
such failure. The agreements in this subsection shall survive the
termination of this Credit Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) (A) on or before the date of any
payment by the Borrower under this Credit Agreement or Notes
to such Lender, deliver to the Borrower and the Agent (x) two
duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, or successor applicable form, as
the case may be, certifying that it is entitled to receive
payments under this Credit Agreement and any Notes without
deduction or withholding of any United States federal income
taxes and (y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, certifying
that it is entitled to an exemption from United States backup
withholding tax;
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(B) deliver to the Borrower and the
Agent two further copies of any such form or certification on
or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously
delivered by it to the Borrower; and
(C) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Borrower or the Agent; or
(ii) in the case of any such Lender that is not
a "bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (A) represent to the Borrower (for the
benefit of the Borrower and the Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (B) agree to furnish to the Borrower, on or
before the date of any payment by the Borrower, with a copy
to the Agent, two accurate and complete original signed
copies of Internal Revenue Service Form W-8, or successor
applicable form certifying to such Lender's legal entitlement
at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the
Internal Revenue Code with respect to payments to be made
under this Credit Agreement and any Notes (and to deliver to
the Borrower and the Agent two further copies of such form on
or before the date it expires or becomes obsolete and after
the occurrence of any event requiring a change in the most
recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or
the Agent for filing and completing such forms), and (C)
agree, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the
Borrower (for the benefit of the Borrower and the Agent) such
other forms as may be reasonably required in order to
establish the legal entitlement of such Lender to an
exemption from withholding with respect to payments under
this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect
to it and such Lender so advises the Borrower and the Agent, then such
Lender shall be exempt from such requirements. Each Person that shall
become a Lender or a participant of a Lender pursuant to Section 11.3
shall, upon the effectiveness of the related transfer, be required to
provide all of the forms, certifications and statements required
pursuant to this subsection (b); provided that in the case of a
participant of a Lender, the obligations of such participant of a
Lender pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such participant of
a Lender shall furnish all such required forms, certifications and
statements to the Lender from which the related participation shall
have been purchased.
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3.14 Compensation.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement and (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto.
Such indemnification may include an amount equal to (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed,
converted or continued, for the period from the date of such prepayment or of
such failure to borrow, convert or continue to the last day of the applicable
Interest Period (or, in the case of a failure to borrow, convert or continue,
the Interest Period that would have commenced on the date of such failure) in
each case at the applicable rate of interest for such Eurodollar Loans provided
for herein minus (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar market. The agreements in this Section shall survive the termination
of this Credit Agreement and the payment of the Loans and all other amounts
payable hereunder.
3.15 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and subaccounts
(taken together) shall be recorded (i) the amount, type and Interest Period of
each such Loan hereunder, (ii) the amount of any principal or interest due and
payable or to become due and payable to each Lender hereunder, and (iii) the
amount of any sum received by the Agent hereunder from or for the account of
the Borrower and each Lender's share thereof, if any. The Agent will make
reasonable efforts to maintain the accuracy of the subaccounts referred to in
the preceding sentence and to promptly update such subaccounts from time to
time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if consistent
with the entries of the Agent, subsection (a)) shall be prima facie evidence of
the existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Agent to maintain such
account, such Register, or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
the Loans made by such Lender in accordance with the terms hereof.
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3.16 Replacement of Lenders.
In the event any Lender delivers to the Borrower any notice in
accordance with Section 3.9, 3.11, or 3.12, then the Borrower shall have the
right, if no Default or Event of Default then exists, to replace such Lender
(the "Replaced Lender") with one or more additional banks or financial
institutions (collectively, the "Replacement Lender"), provided, that (a) the
Replacement Lender is acceptable to the Agent, (b) at the time of any
replacement pursuant to this Section 3.16, the Replacement Lender shall enter
into one or more Assignment and Acceptance agreements pursuant to, and in
accordance with the terms of, Section 11.3(b) (and with all processing and
recordation fees payable pursuant to said Section 11.3(b) to be paid by the
Replacement Lender or, at its option, the Borrower) pursuant to which the
Replacement Lender shall acquire all of the rights and obligations of the
Replaced Lender hereunder and, in connection therewith, shall pay to the
Replaced Lender in respect thereof an amount equal to the sum of (i) the
principal of, and all accrued interest on, all outstanding Loans of the
Replaced Lender, and (ii) all accrued, but theretofore unpaid, fees owing to
the Replaced Lender pursuant to Section 3.4, (c) all other obligations of the
Borrower owing to the Replaced Lender (including all other obligations, if any,
owing pursuant to Sections 3.9, 3.11 and 3.12 shall be paid in full to such
Replaced Lender concurrently with such replacement and (d) the Agent and the
Lenders shall not be obligated to assist the Borrower in identifying any
Replacement Lender.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender, each Affiliate of
Lender that enters into a Hedging Agreement and the Agent the prompt payment of
the Credit Party Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise). This Guaranty is a
guaranty of payment and not of collection and is a continuing guaranty and
shall apply to all Credit Party Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or the Hedging Agreements, or any
other agreement or instrument referred to therein, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor. Each Guarantor agrees that this Guaranty may be enforced
by the Lenders without the necessity at any time of resorting to or exhausting
any other security or collateral and without the necessity at any time of
having recourse to the Notes or any other of the Credit Documents or any
collateral, if any,
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hereafter securing the Credit Party Obligations or otherwise and each Guarantor
hereby waives the right to require the Lenders to proceed against the Borrower
or any other Person (including a co-guarantor) or to require the Lenders to
pursue any other remedy or enforce any other right. Each Guarantor further
agrees that it shall have no right of subrogation, indemnity, reimbursement or
contribution against the Borrower or any other Guarantor of the Credit Party
Obligations for amounts paid under this Guaranty until such time as the Lenders
(and any Affiliates of Lenders entering into Hedging Agreements) have been paid
in full, all Commitments under the Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received
under the Credit Documents. Each Guarantor further agrees that nothing
contained herein shall prevent the Lenders from suing on the Notes or any of
the other Credit Documents or any of the Hedging Agreements or foreclosing its
security interest in or Lien on any collateral, if any, securing the Credit
Party Obligations or from exercising any other rights available to it under
this Credit Agreement, the Notes, any other of the Credit Documents, or any
other instrument of security, if any, and the exercise of any of the aforesaid
rights and the completion of any foreclosure proceedings shall not constitute a
discharge of any of any Guarantor's obligations hereunder; it being the purpose
and intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither any
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of the Borrower or by reason of the bankruptcy or insolvency of the
Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by the Agent or any Lender upon this Guarantee or
acceptance of this Guarantee. The Credit Party Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee. The
Guarantors further agree to all rights of set-off as set forth in Section 11.2.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the Collateral now
or hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have
any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Credit
Party Obligations or the properties subject thereto; (c) the time or place of
payment of the Credit Party Obligations may be changed or extended, in whole or
in part, to a time certain or otherwise, and may be renewed or accelerated, in
whole or in part; (d) the Borrower and any other party liable for payment under
the Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable for the
payment thereof may be granted indulgences or be released; and (g) any deposit
balance for the credit of the Borrower or any other party liable for the
payment of the Credit Party Obligations or liable upon any security therefor
may be released, in whole or in part, at, before or after the stated, extended
or accelerated maturity of the
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Credit Party Obligations, all without notice to or further assent by such
Guarantor, which shall remain bound thereon, notwithstanding any such exchange,
compromise, surrender, extension, renewal, acceleration, modification,
indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required
in the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining,
amending, substituting for, releasing, waiving or modifying any security
interest, lien or encumbrance, if any, hereafter securing the Credit Party
Obligations, or the Lenders' subordinating, compromising, discharging or
releasing such security interests, liens or encumbrances, if any; (e) all other
notices to which such Guarantor might otherwise be entitled; and (f) demand for
payment under this Guaranty.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand,
and the Agent and the Lenders, on the other hand, the Credit Party Obligations
may be declared to be forthwith due and payable as provided in Section 9 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors. The Guarantors
acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Security Agreements and the other Collateral
Documents and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof.
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4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
4.8 Rights of Contribution.
The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable law. Such
contribution rights shall be subordinate and subject in right of payment to the
obligations of the Credit Parties under the Credit Documents and no Credit
Party shall exercise such rights of contribution until all Credit Party
Obligations have been paid in full and the Commitments terminated.
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
make the initial Extension of Credit is subject to satisfaction (or waiver by
each of the Lenders) of the following conditions:
(a) Executed Credit Documents. Receipt by the Agent of
duly executed copies of: (i) this Credit Agreement; (ii) the Notes;
(iii) the Collateral Documents; and (iv) all other Credit Documents,
each in form and substance reasonably acceptable to the Agent.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles
or certificates of incorporation or other charter documents
of each Credit Party certified to be true and complete as of
a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Effective Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Effective Date.
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(iii) Resolutions. Copies of resolutions of the
Board of Directors of each Credit Party approving and
adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution
and delivery thereof, certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in
force and effect as of the Effective Date.
(iv) Good Standing. Copies of certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing would
have a Material Adverse Effect on the business or operations
of a Credit Party in such jurisdiction.
(v) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the Effective Date.
(c) Opinion of Counsel. Receipt by the Agent of an
opinion or opinions (which shall cover, among other things, authority,
legality, validity, binding effect, and enforceability of the Credit
Documents and the attachment, perfection, and validity of liens),
reasonably satisfactory to the Agent, addressed to the Agent and the
Lenders and dated as of the Effective Date, from legal counsel to the
Credit Parties.
(d) Financial Statements. Receipt by the Lenders of such
financial information regarding the Borrower and its Subsidiaries as
they may request, including, but not limited to, (i) the consolidated
financial statements of the Borrower and its Subsidiaries for the
fiscal years 1996 and 1997, including balance sheets, income
statements and cash flow statements audited by independent public
accountants of recognized national standing and prepared in accordance
with GAAP, (ii) interim monthly financial statements for the Borrower
and its Subsidiaries, prepared in accordance with GAAP, and (iii)
monthly working capital detail for the trailing twelve months of the
Borrower and its Subsidiaries and the first projected year for the
Borrower and its Subsidiaries.
(e) Personal Property Collateral. The Agent shall have
received, in form and substance reasonably satisfactory to the Agent:
(i) searches of Uniform Commercial Code ("UCC")
filings in the jurisdiction of the chief executive office of
each Credit Party and each jurisdiction where any Collateral
is located or where a filing would need to be made in order
to perfect the Agent's security interest in the Collateral,
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
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(ii) duly executed UCC financing statements for
each appropriate jurisdiction as is necessary, in the Agent's
sole discretion, to perfect the Agent's security interest in
the Collateral;
(iii) searches of ownership of intellectual
property in the appropriate governmental offices as requested
by the Agent and such patent, trademark and copyright filings
as requested by the Agent;
(iv) all stock certificates evidencing the stock
pledged to the Agent pursuant to the Pledge Agreements,
together with duly executed in blank undated stock powers
attached thereto; and
(v) all instruments and chattel paper in the
possession of a Credit Party, as required by the Security
Agreements, together with allonges or assignments as may be
necessary to perfect the Agent's security interest in such
Collateral.
(f) Evidence of Insurance. Receipt by the Agent of
copies of insurance policies or certificates of insurance of the
Credit Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, but not
limited to, naming the Agent as additional insured or loss payee on
behalf of the Lenders.
(g) Material Adverse Effect. No material adverse change
shall have occurred since December 31, 1997 in the condition
(financial or otherwise), business, management or prospects of the
Borrower and its Subsidiaries taken as a whole.
(h) Litigation. There shall not exist any pending or,
to the knowledge of any Credit Party, threatened action, suit,
investigation or proceeding against a Credit Party or any of their
Subsidiaries that would have or would reasonably be expected to have a
Material Adverse Effect.
(i) Landlord Waiver. With respect to each leased
location of a Credit Party (i) on which such Credit Party maintains in
excess of $400,000 of inventory and (ii) for which the Agent in its
sole discretion determines that a landlord consent is required,
receipt by the Agent of a landlord consent from the respective
landlord in form and substance satisfactory to the Agent.
(j) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Effective Date stating that (i) except for the
Indenture Default, the Borrower and each of its Subsidiaries are in
compliance with all existing financial obligations, (ii) no action,
suit, investigation or proceeding is pending or, to the knowledge of
any Credit Party, threatened in any court or before any arbitrator or
governmental instrumentality that purports to effect the Borrower, any
of the its Subsidiaries or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding would
have or might reasonably be expected to
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have a Material Adverse Effect, (iii) the financial statements and
information delivered to the Agent on or before the Effective Date
were prepared in good faith and in accordance with GAAP and (iv)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to
occur on such date, (A) the Borrower and each of its Subsidiaries is
Solvent, (B) no Default or Event of Default exists, (C) all
representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and
(D) the Credit Parties are in compliance with each of the financial
covenants set forth in Section 7.2.
(k) Borrowing Base Report. A Borrowing Base Report, in
the form of Exhibit 7.1(d), dated as of the Effective Date.
(l) Fees and Expenses. Payment by the Credit Parties of
the fees and expenses owed by them to the Agent, as set forth in the
Fee Letter.
(m) Priority of Liens. The Agent shall have received
satisfactory evidence that none of the Collateral is subject to any
Liens other than Permitted Liens.
(n) Year 2000. Receipt by the Agent of evidence that (a)
the Borrower and its Subsidiaries are taking all necessary and
appropriate steps to ascertain the extent of, and to quantify and
successfully address, business and financial risks facing the Borrower
and such Subsidiary as a result of what is commonly referred to as the
`Year 2000 problem' (i.e., the inability of certain computer
applications to recognize correctly and perform date-sensitive
functions involving certain dates prior to and after December 31,
1999), including risks resulting from the failure of key vendors and
customers of the Borrower or any Subsidiary to successfully address
the Year 2000 problem, and (b) the Borrower and each Subsidiary's
material computer applications and those of its key vendors and
customers will, on a timely basis, adequately address the Year 2000
problem in all material respects.
(o) Maxim Group Credit Agreement. Receipt by the Agent
of evidence that conditions precedent to the effectiveness of the
Maxim Group Credit Agreement shall have been satisfied.
(p) Other. Receipt and satisfactory review by the Agent
of such other documents, instruments, agreements or information as
reasonably and timely requested by the Agent or any Lender, including,
but not limited to, information regarding litigation, tax, accounting,
labor, insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements, property ownership
and contingent liabilities of the Borrower and its Subsidiaries.
5.2 Conditions to All Extensions of Credit.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall an Issuing Lender be
required to issue or extend a Letter of Credit unless:
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(a) Notice. The Borrower shall have delivered (i) in the
case of any new Revolving Loan, a Notice of Borrowing, duly executed
and completed, by the time specified in Section 2.1 and (ii) in the
case of any Letter of Credit, the Issuing Lender shall have received
an appropriate request for issuance in accordance with the provisions
of Section 2.2;
(b) Representations and Warranties. The representations
and warranties made by the Credit Parties in any Credit Document are
true and correct in all material respects at and as if made as of such
date except to the extent they expressly relate to an earlier date;
(c) No Default. No Default or Event of Default shall
exist or be continuing either prior to or after giving effect thereto;
and
(d) Availability. Immediately after giving effect to the
making of a Loan (and the application of the proceeds thereof) or to
the issuance of a Letter of Credit, as the case may be, the sum of the
Revolving Loans outstanding plus LOC Obligations outstanding shall not
exceed the lesser of (i) the Revolving Committed Amount and (ii) the
Borrowing Base Assets.
The delivery of each Notice of Borrowing and each request for a Letter of
Credit shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), and (d) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
(a) The financial statements delivered to the Lenders
prior to the Effective Date and pursuant to Section 7.1(a) and (b):
(i) have been prepared in accordance with GAAP and (ii) present fairly
the consolidated and consolidating (as applicable) financial
condition, results of operations and cash flows of the Credit Parties
and their Subsidiaries as of such date and for such periods.
(b) Since December 31, 1997, there has been no sale,
transfer or other disposition by any Credit Party or any of their
Subsidiaries of any material part of the business or property of the
Credit Parties, taken as a whole, and no purchase or other acquisition
by any of them of any business or property (including any capital
stock of any other Person) material in relation to the consolidated
financial condition of the Credit Parties, taken as a whole, in each
case, which, is not (i) reflected in the most recent financial
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statements delivered to the Lenders pursuant to Section 7.1 or in the
notes thereto or (ii) otherwise permitted by the terms of this Credit
Agreement and communicated to the Agent.
6.2 No Material Change.
Since the Effective Date, there has been no development or event
relating to or affecting a Credit Party or any of their Subsidiaries which has
had or would be reasonably expected to have a Material Adverse Effect. To the
knowledge of any Credit Party, since December 31, 1997, there has been no
development or event relating to or affecting a Credit Party or any of their
Subsidiaries which has had or would be reasonably expected to have a Material
Adverse Effect.
6.3 Organization and Good Standing.
Each Credit Party (a) is duly organized, validly existing and in good
standing under the laws of the State (or other jurisdiction) of its
incorporation or formation, (b) is duly qualified and in good standing and
authorized to do business in every jurisdiction unless the failure to be so
qualified, in good standing or authorized would have a Material Adverse Effect
and (c) has the right, power and authority to own its properties and to carry
on its business as now conducted and as proposed to be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the right, power and authority to execute,
deliver and perform this Credit Agreement and the other Credit Documents to
which it is a party and to incur the obligations herein and therein provided
for and (b) is duly authorized to, and has been authorized by all necessary
corporate and other action, to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party.
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of the articles or certificate of
incorporation, bylaws or other organizational documents of the Borrower or any
of its Subsidiaries, (b) violate, contravene or materially conflict with any
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument
to which it is a party or by which it may be bound, the violation of which
could have or might be reasonably expected to have a Material Adverse Effect,
or (d) result in or require the creation of any Lien (other than those
contemplated in or created in connection with the Credit Documents) upon or
with respect to its properties.
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6.6 Consents.
Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or
third party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by such Credit Party.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization or moratorium laws or similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
6.8 No Default.
Except for the Indenture Default, no Credit Party, nor any of their
Subsidiaries, is in default in any respect under any contract, lease, loan
agreement, indenture, mortgage, security agreement or other agreement or
obligation to which it is a party or by which any of its properties is bound
which default would have or would be reasonably expected to have a Material
Adverse Effect. No Default or Event of Default exists except as previously
disclosed in writing to the Lenders.
6.9 Ownership.
Each Credit Party, and each of its Subsidiaries, is the owner of, and
has good and marketable title to, or has a valid license to use all of its
respective assets and none of such assets is subject to any Lien other than
Permitted Liens.
6.10 Indebtedness.
The Credit Parties and their Subsidiaries have no Indebtedness except
(a) as disclosed in the financial statements referenced in Section 6.1, (b) as
set forth on Schedule 6.10 and (c) as otherwise permitted by this Credit
Agreement.
6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, any Credit Party or any of its Subsidiaries which could
have or might be reasonably expected to have a Material Adverse Effect.
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6.12 Taxes.
Each Credit Party, and each of its Subsidiaries, has filed, or caused
to be filed, all material tax returns (federal, state, local and foreign)
required to be filed and paid (a) all material amounts of taxes shown thereon
to be due and payable (including interest and penalties) and (b) all material
other taxes, fees, assessments and other governmental charges (including
documentary stamp taxes and intangibles taxes) that are due and payable, except
for such taxes (i) which are not yet delinquent or (ii) that are being
contested in good faith and by proper proceedings, and against which adequate
reserves are being maintained in accordance with GAAP. To the knowledge of the
Credit Parties, there are no material amounts claimed to be due against any of
them by any Governmental Authority.
6.13 Compliance with Law.
Each Credit Party, and each of its Subsidiaries, is in compliance with
all Requirements of Law and all other laws, rules, regulations, orders and
decrees (including without limitation Environmental Laws) applicable to it, or
to its properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect.
6.14 ERISA.
Except as would not result or be reasonably expected to result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no Termination
Event has occurred, and, to the knowledge of the Credit Parties, no
event or condition has occurred or exists as a result of which any
Termination Event could reasonably be expected to occur, with respect
to any Plan; (ii) no "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether
or not waived, has occurred with respect to any Plan; (iii) each Plan
has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; and (iv) no lien
in favor or the PBGC or a Plan has arisen or is reasonably likely to
arise on account of any Plan.
(b) The actuarial present value of all "benefit
liabilities" under each Single Employer Plan (determined within the
meaning of Section 401(a)(2) of the Code, utilizing the actuarial
assumptions used to fund such Plans), whether or not vested, did not,
as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the current value of the
assets of such Plan allocable to such accrued liabilities.
(c) Neither the Borrower, nor any of its Subsidiaries
nor any ERISA Affiliate has incurred, or, to the knowledge of the
Credit Parties, are reasonably expected to incur, any withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan. Neither the Borrower, any of its Subsidiaries nor any ERISA
Affiliate has received
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any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within
the meaning of Section 4245 of ERISA), or has been terminated (within
the meaning of Title IV of ERISA), and no Multiemployer Plan is, to
the best knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected or is reasonably likely to subject the Borrower or any of
its Subsidiaries or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
Code, or under any agreement or other instrument pursuant to which the
Borrower or any of its Subsidiaries or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
(e) The present value (determined using actuarial and
other assumptions which are reasonable with respect to the benefits
provided and the employees participating) of the liability of the
Borrower and its Subsidiaries and each ERISA Affiliate for
post-retirement welfare benefits to be provided to their current and
former employees under Plans which are welfare benefit plans (as
defined in Section 3(1) of ERISA), net of all assets under all such
Plans allocable to such benefits, are reflected on the Financial
Statements in accordance with FASB 106.
(f) Each Plan which is a welfare plan (as defined in
Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Code apply has been administered in material compliance
with such sections.
6.15 Subsidiaries.
Set forth on Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each Credit Party. Information on Schedule 6.15 includes
jurisdiction of incorporation or organization, the number of shares of each
class of capital stock or other equity interests outstanding, the number and
percentage of outstanding shares of each class owned (directly or indirectly)
by such Credit Party; and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect thereto. The outstanding capital stock and other
equity interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Credit Party, directly or indirectly,
free and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents). Other than as set forth in Schedule
6.15, neither any Credit Party nor any Subsidiary thereof has outstanding any
securities convertible into or exchangeable for its capital stock nor does any
such Person have outstanding any rights to subscribe for or to purchase or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its capital stock. Schedule 6.15 may be updated from time
to time by the Borrower by giving written notice thereof to the Agent. As of
the Closing Date, none of the Credit Parties owns any shares of capital stock
in any Foreign Subsidiaries.
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6.16 Use of Proceeds.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.11. No proceeds of the Loans hereunder have
been or will be used (a) to acquire, directly or indirectly, any security in
any transaction which is subject to Sections 13 or 14 of the Securities
Exchange Act of 1934, as amended, (including, without limitation, Sections
13(d) and 14(d) thereof) or to refinance any Indebtedness used to acquire any
such securities or (b) for the acquisition of another Person unless the board
of directors (or other comparable governing body) or stockholders, as
appropriate, of such Person has approved such acquisition.
6.17 Government Regulation.
(a) No part of the Letters of Credit or proceeds of the
Loans will be used, directly or indirectly, for the purpose of
purchasing or carrying any "margin stock" within the meaning of
Regulation U, or for the purpose of purchasing or carrying or trading
in any securities. If requested by any Lender or the Agent, the
Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1
referred to in Regulation U. No Indebtedness being reduced or retired
out of the proceeds of the Loans was or will be incurred for the
purpose of purchasing or carrying any margin stock within the meaning
of Regulation U or any "margin security" within the meaning of
Regulation T. "Margin stock" within the meaning of Regulation U does
not constitute more than 25% of the value of the consolidated assets
of the Credit Parties and their Subsidiaries. None of the transactions
contemplated by the Credit Documents (including, without limitation,
the direct or indirect use of the proceeds of the Loans) will violate
or result in a violation of the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, or regulations issued
pursuant thereto, or Regulation T, U or X.
(b) No Credit Party, nor any of their Subsidiaries, is
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act or the Investment Company Act of 1940,
each as amended. In addition, no Credit Party, nor any of their
Subsidiaries, is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company",
or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(c) No director, executive officer or principal
shareholder of any Credit Party or any of their Subsidiaries is a
director, executive officer or principal shareholder of any Lender.
For the purposes hereof the terms "director", "executive officer" and
"principal shareholder" (when used with reference to any Lender) have
the respective meanings assigned thereto in Regulation O issued by the
Board of Governors of the Federal Reserve System.
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6.18 Environmental Matters.
(a) Except as would not cause or reasonably be expected
to cause a Material Adverse Effect:
(i) Each of the Real Properties and all
operations at the Real Properties are in compliance with all
applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Real Properties or
the businesses operated by the Credit Parties or any of their
Subsidiaries (the "Businesses"), and there are no conditions
relating to the Businesses or Real Properties that would
reasonably be expected to give rise to liability under any
applicable Environmental Laws.
(ii) No Credit Party has received any written
notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous
Materials or compliance with Environmental Laws with regard
to any of the Real Properties or the Businesses, nor, to the
knowledge of a Credit Party or any of its Subsidiaries, is
any such notice being threatened.
(iii) Hazardous Materials have not been
transported or disposed of from the Real Properties, or
generated, treated, stored or disposed of at, on or under any
of the Real Properties or any other location, in each case
by, or on behalf or with the permission of, a Credit Party or
any of its Subsidiaries in a manner that would give rise to
liability under any applicable Environmental Laws.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of a
Credit Party or any of its Subsidiaries, threatened, under
any Environmental Law to which a Credit Party or any of its
Subsidiaries is or will be named as a party, nor are there
any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to a Credit Party or any of
its Subsidiaries, the Real Properties or the Businesses.
(v) There has been no release (including,
without limitation, disposal) or threat of release of
Hazardous Materials at or from the Real Properties, or
arising from or related to the operations of a Credit Party
or any of its Subsidiaries in connection with the Real
Properties or otherwise in connection with the Businesses
where such release constituted a violation of, or would give
rise to liability under, any applicable Environmental Laws.
(vi) None of the Real Properties contains, or
has previously contained, any Hazardous Materials at, on or
under the Real Properties in amounts or concentrations that,
if released, constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
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(vii) No Credit Party, nor any of its
Subsidiaries, has assumed any liability of any Person (other
than another Credit Party, or one of its Subsidiaries) under
any Environmental Law.
(b) The Credit Parties have adopted procedures that are
designed to (i) ensure that each Credit Party, any of its operations
and each of the properties owned or leased by each Credit Party
complies with applicable Environmental Laws and (ii) minimize any
liabilities or potential liabilities that each Credit Party, any of
its operations and each of the properties owned or leased by each
Credit Party may have under applicable Environmental Laws.
6.19 Intellectual Property.
Each Credit Party owns, or has the legal right to use, all patents,
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal
right to use would not have or be reasonably expected to have a Material
Adverse Effect. Set forth on Schedule 6.19 is a list of all patents, registered
and material unregistered trademarks, tradenames and registered copyrights
owned by each Credit Party or that any Credit Party has the right to use.
Except as provided on Schedule 6.19, none of the Intellectual Property is
subject to any licensing or franchise agreement. Furthermore, except as
provided on Schedule 6.19, no claim has been asserted against any Credit Party
or its Subsidiaries in writing and is pending by any Person challenging or
questioning the use of any Intellectual Property owned by a Credit Party or
that any Credit Party has a right to use or the validity or effectiveness of
any such Intellectual Property, nor does any Credit Party have knowledge of any
such claim, and to the Credit Parties' knowledge the use of any Intellectual
Property by the Credit Parties or any of their Subsidiaries does not infringe
on the rights of any Person, except for such claims and infringements that in
the aggregate, would not have or be reasonably expected to have a Material
Adverse Effect. Schedule 6.19 may be updated from time to time by the Borrower
by giving written notice thereof to the Agent.
6.20 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.21 Investments.
All Investments of each Credit Party and its Subsidiaries are
Permitted Investments.
6.22 Location of Collateral.
Set forth on Schedule 6.22(a) is a list of all Real Properties with
street address, county and state where located. Set forth on Schedule 6.22(b)
is a list of all locations where any personal
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property of a Credit Party is located, including county and state where
located. Set forth on Schedule 6.22(c) is the chief executive office and
principal place of business of each Credit Party. Schedules 6.22(a), 6.22(b)
and 6.22(c) may be updated from time to time by the Borrower by giving written
notice thereof to the Agent.
6.23 Disclosure.
Neither this Credit Agreement nor any financial statements delivered
to the Lenders nor any other document, certificate or statement furnished to
the Lenders by or on behalf of any Credit Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained therein or herein, taken as a whole, not misleading.
6.24 Licenses, etc.
The Credit Parties have obtained and hold in full force and effect,
all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the operation of their
respective businesses as presently conducted, except where the failure to
obtain same would not have a Material Adverse Effect.
6.25 Collateral Documents.
The Collateral Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests
and Liens are prior to all other Liens other than Permitted Liens.
6.26 Burdensome Restrictions.
No Credit Party, nor any of this Subsidiaries, is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, would have or be reasonably
expected to have a Material Adverse Effect.
6.27 Year 2000 Compliance.
Each Credit Party has (i) initiated a review and assessment
of all areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by such Credit Party or any of its Subsidiaries may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with the timetable. Based on the
foregoing, each Credit Party believes that all computer applications (including
those of its suppliers, vendors and customers) that are material to its and any
of its
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Subsidiaries' business and operations are reasonably expected on a timely basis
to be able to perform properly date-sensitive functions for all dates before
and after January 1, 2000 (that is, be "Year 2000 compliant"), except to the
extent that a failure to do so could not reasonably be expected to have
Material Adverse Effect.
6.28 Labor Contracts and Disputes.
(i) There is no collective bargaining agreement or other labor
contract covering employees of any Credit Party; (ii) no union or other labor
organization is seeking to organize, or be recognized as, a collective
bargaining unit of employees of any Credit Party; (iii) there is no pending, or
to any Credit Party's knowledge, threatened, strike, work stoppage, material
unfair lease practice claim or other material labor dispute against or
effecting any Credit Party or its employees.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest and fees and other obligations then due and payable hereunder,
have been paid in full and the Commitments and Letters of Credit hereunder
shall have terminated:
7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the
Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Borrower, a consolidated and consolidating balance sheet and
income statement of the Borrower and its Subsidiaries, as of the end
of such fiscal year, together with related consolidated and
consolidating statements of operations and retained earnings and of
cash flows for such fiscal year, setting forth in comparative form
consolidated and consolidating figures for the preceding fiscal year,
all such consolidated financial information described above to be in
reasonable form and detail and audited by independent certified public
accountants of recognized national standing reasonably acceptable to
the Agent and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for
changes with which such accountants concur) and shall not be limited
as to the scope of the audit or qualified in any manner.
(b) Quarterly Financial Statements. As soon as
available, and in any event within 45 days after the close of each
fiscal quarter of the Borrower, a consolidated and consolidating
balance sheet and income statement of the Borrower and its
Subsidiaries, as
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of the end of such fiscal quarter, together with related consolidated
and consolidating statements of operations and retained earnings and
of cash flows for such fiscal quarter in each case setting forth in
comparative form consolidated and consolidating figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate
of the chief financial officer of the Borrower to the effect that such
quarterly financial statements fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries and have
been prepared in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments.
(c) Monthly Financial Statements. As soon as available,
and in any event within 20 days after the close of each calendar
month, a consolidated and consolidating balance sheet and income
statement of the Borrower and its Subsidiaries, as of the end of such
calendar month, together with related consolidated and consolidating
statements of operations and retained earnings and of cash flows for
such calendar month in each case setting forth in comparative form
consolidated and consolidating figures for the corresponding period of
the preceding fiscal year, all such financial information described
above to be in reasonable form and detail and reasonably acceptable to
the Agent, and accompanied by a certificate of the chief financial
officer of the Borrower to the effect that such monthly financial
statements fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries and have been prepared
in accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments.
(d) Borrowing Base Report. Within 20 days after the end
of each calendar month or at any other time reasonably required by the
Agent, a Borrowing Base Report, as of the end of the immediately
preceding month in each case in substantially the form of Exhibit
7.1(d) and certified by an Executive Officer of the Borrower to be
true and correct as of the date thereof.
(e) Officer's Certificate. At the time of delivery of
the financial statements provided for in Sections 7.1(a) and 7.1(b)
above, a certificate of an Executive Officer of the Borrower
substantially in the form of Exhibit 7.1(e), (i) demonstrating
compliance with the financial covenants contained in Section 7.2 by
calculation thereof as of the end of each such fiscal period, (ii)
demonstrating compliance with any other terms of this Credit Agreement
as requested by the Agent and (iii) stating that no Default or Event
of Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Borrower
proposes to take with respect thereto.
(f) Annual Business Plan and Budgets. Prior to the end
of each fiscal year of the Borrower, an annual business plan and
budget of the Borrower and its Subsidiaries on a consolidated basis
containing, among other things, pro forma financial projections
(including without limitation, income statement, balance sheet and
statement of cash flows) for the next fiscal year.
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(g) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section
7.1(a), a certificate of the accountants conducting the annual audit
stating that they have reviewed this Credit Agreement and stating
further whether, in the course of their audit, they have become aware
of any Default or Event of Default and, if any such Default or Event
of Default exists, specifying the nature and extent thereof.
(h) Auditor's Reports. Promptly upon receipt thereof, a
copy of any "management letter" submitted by independent accountants
to the Borrower or any of its Subsidiaries in connection with any
annual, interim or special audit of the books of the Borrower or any
of its Subsidiaries.
(i) Reports. Promptly upon transmission or receipt
thereof, (a) copies of any public filings and registrations with, and
reports to or from, the Securities and Exchange Commission, or any
successor agency, and copies of all financial statements, proxy
statements, notices and reports as the Borrower or any of its
Subsidiaries shall send to its shareholders generally and (b) upon the
written request of the Agent, all reports and written information to
and from the United States Environmental Protection Agency, or any
state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any
state or local agency responsible for health and safety matters, or
any successor agencies or authorities concerning environmental, health
or safety matters.
(j) Notices. Upon an officer of a Credit Party obtaining
knowledge thereof, the Borrower will give written notice to the Agent
promptly (and in any event within two Business Days) of (a) the
occurrence of an event or condition consisting of a Default or Event
of Default, specifying the nature and existence thereof and what
action the Borrower proposes to take with respect thereto, and (b) the
occurrence of any of the following with respect to the Borrower or any
of its Subsidiaries: (i) the pendency or commencement of any
litigation, arbitral or governmental proceeding against a Credit Party
or any of its Subsidiaries which if adversely determined would have or
would be reasonably expected to have a Material Adverse Effect, (ii)
the institution of any proceedings against a Credit Party or any of
its Subsidiaries with respect to, or the receipt of written notice by
such Person of potential liability or responsibility for violation, or
alleged violation of any federal, state or local law, rule or
regulation, (including but not limited to, Environmental Laws) the
violation of which would have or would be reasonably expected to have
a Material Adverse Effect, or (iii) any information that a Credit
Party may have a Year 2000 Problem on or after January 1, 2000.
(k) ERISA. Upon any of the Credit Parties or any ERISA
Affiliate obtaining knowledge thereof, the Borrower will give written
notice to the Agent promptly (and in any event within two Business
Days) of: (i) any event or condition, including, but not limited to,
any Reportable Event, that constitutes, or might reasonably lead to, a
Termination Event; (ii) with respect to any Multiemployer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against the Credit Parties or any of
their
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ERISA Affiliates, or of a determination that any Multiemployer Plan is
in reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which a Credit
Party or any of its Subsidiaries or ERISA Affiliates is required to
contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
that could have a Material Adverse Effect; together, with a
description of any such event or condition or a copy of any such
notice and a statement by the principal financial officer of the
Borrower briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, a Credit Party shall furnish
the Agent and each of the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as
well as all schedules and attachments thereto required to be filed
with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the Code, respectively, for each "plan year"
(within the meaning of Section 3(39) of ERISA).
(l) Environmental.
(i) Subsequent to a notice from any
Governmental Authority where the subject matter of such
notice would reasonably cause concern, or during the
existence of an Event of Default, and upon the written
request of Agent, the Credit Parties will furnish or cause to
be furnished to the Agent, at the Credit Parties' expense, a
report of an environmental assessment of reasonable scope,
form and depth, including, where appropriate, invasive soil
or groundwater sampling, by a consultant reasonably
acceptable to the Agent addressing the subject of such notice
or, if during the existence of an Event of Default, regarding
any release or threat of release of Hazardous Materials on
any property owned, leased or operated by a Credit Party and
the compliance by the Credit Parties with Environmental Laws.
If the Credit Parties fail to deliver such an environmental
report within sixty (60) days after receipt of such written
request, then the Agent may arrange for same, and the Credit
Parties hereby grant to the Agent and its representatives
access to the Real Properties and a license of a scope
reasonably necessary to undertake such an assessment
(including, where appropriate, invasive soil or groundwater
sampling). The reasonable cost of any assessment arranged for
by the Agent pursuant to this provision will be payable by
the Credit Parties on demand and added to the obligations
secured by the Collateral Documents.
(ii) Each Credit Party will conduct and complete
all investigations, studies, sampling, and testing and all
remedial, removal, and other actions necessary to address all
Hazardous Materials on, from, or affecting any real property
owned or leased by a Credit Party to the extent necessary to
be in compliance with all Environmental Laws and all other
applicable federal, state, and local laws, regulations, rules
and policies and with the orders and directives of all
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Governmental Authorities exercising jurisdiction over such
real property to the extent any failure would have or be
reasonably expected to have a Material Adverse Effect.
(m) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of the Credit Parties and their
Subsidiaries as the Agent may reasonably request.
7.2 Financial Covenants.
(a) Current Ratio. The Current Ratio, measured as of the
last day of each fiscal quarter of the Borrower, shall be greater than
or equal to 1.75 to 1.0.
(b) Interest Coverage Ratio. The Interest Coverage Ratio
(beginning with the fiscal quarter ending January 31, 1999), measured
as of the last day of each fiscal quarter of the Borrower, shall be
greater than or equal to 1.10 to 1.0.
(c) Net Worth. As of the last day of each fiscal quarter
of the Borrower, the Net Worth shall be greater than or equal to the
sum of (i) $80 million plus (ii) 50% of the cumulative Net Income
(without deduction for losses) earned for each completed fiscal
quarter subsequent to the Closing Date to the date of determination
plus (iii) 100% of the amount of Net Cash Proceeds from any Equity
Issuance.
7.3 Preservation of Existence and Franchises.
Each of the Credit Parties will do all things necessary to (a)
preserve and keep in full force and effect its existence and (b) take all
reasonable action to maintain all rights, franchises and authority necessary or
desirable in the normal conduct of its business, except as permitted by Section
8.4.
7.4 Books and Records.
Each of the Credit Parties will, and cause its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
GAAP (including the establishment and maintenance of appropriate reserves).
7.5 Compliance with Law.
Each of the Credit Parties will, and cause its Subsidiaries to, comply
with all material laws, rules, regulations and orders, and all applicable
material restrictions imposed by all Governmental Authorities, applicable to it
and its property (including, without limitation, Environmental Laws).
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7.6 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will pay, settle or discharge (a) all
taxes, assessments and governmental charges or levies imposed upon it, or upon
its income or profits, or upon any of its properties, before they shall become
delinquent, (b) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) all of its other Indebtedness as it shall become due (to
the extent such repayment is not otherwise prohibited by this Credit
Agreement); provided, however, that a Credit Party shall not be required to pay
any such tax, assessment, charge, levy, claim or Indebtedness which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with GAAP, unless the
failure to make any such payment (i) would give rise to an immediate right to
foreclose or collect on a Lien securing such amounts or (ii) would have or
reasonably be expected to have a Material Adverse Effect.
7.7 Insurance.
Each of the Credit Parties will at all times maintain in full force
and effect insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in such
amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice.
All policies shall have the Agent, on behalf of the Lenders, named as an
additional insured and loss payee.
In the event there occurs any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Agent generally describing the
nature and extent of such damage or destruction. Subsequent to any loss, damage
to or destruction of the Collateral of any Credit Party or any part thereof,
such Credit Party, whether or not the insurance proceeds, if any, received on
account of such damage or destruction shall be sufficient for that purpose, at
such Credit Party's cost and expense, will promptly repair or replace the
Collateral of such Credit Party so lost, damaged or destroyed; provided,
however, that such Credit Party need not repair or replace the Collateral of
such Credit Party so lost, damaged or destroyed to the extent the failure to
make such repair or replacement (a) is desirable to the proper conduct of the
business of such Credit Party in the ordinary course and otherwise is in the
best interest of such Credit Party and (b) would not materially impair the
rights and benefits of the Agent or the Lenders under this Credit Agreement or
any other Credit Document. In the event a Credit Party shall receive any
insurance proceeds, as a result of any loss, damage or destruction of
Collateral, in a net amount in excess of $500,000, such Credit Party will
immediately pay over such proceeds to the Agent as cash collateral for the
Credit Party Obligations. The Agent agrees to release such insurance proceeds
to such Credit Party for replacement or restoration of the portion of the
Collateral of such Credit Party lost, damaged or destroyed if (A) within 30
days from the date the Agent receives such insurance proceeds, the Agent has
received written application for such release from such Credit Party together
with evidence reasonably satisfactory to it that the Collateral lost, damaged
or destroyed has been or will be replaced or restored to its condition (or by
Collateral having a value at least equal to the condition of the asset subject
to the loss, damage or destruction) immediately prior to the loss, destruction
or other event giving rise to the payment of
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such insurance proceeds and (B) on the date of such release no Default or Event
of Default exists. If the conditions in the preceding sentence are not met, the
Agent may or, upon the request of the Required Lenders, shall at any time after
the first Business Day subsequent to the date 30 days after it received such
insurance proceeds, apply such insurance proceeds as a mandatory prepayment of
the Credit Party Obligations for application in accordance with the terms of
Section 3.3(b)(iii). All insurance proceeds shall be subject to the security
interest of the Lenders under the Collateral Documents.
The present insurance coverage of the Credit Parties and their Subsidiaries is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 7.7. Schedule 7.7 shall be amended and updated by the Credit Parties
on an at least annual basis or upon the request of the Agent.
7.8 Maintenance of Property.
Each of the Credit Parties will maintain and preserve its properties
and equipment in good repair, working order and condition, normal wear and tear
excepted, and will make, or cause to be made, in such properties and equipment
from time to time all repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto as may be needed or proper, to the extent
and in the manner customary for companies in similar businesses.
7.9 Performance of Obligations.
Each of the Credit Parties will perform in all material respects all
of its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound.
7.10 Collateral.
If, subsequent to the Closing Date, a Credit Party shall (a) acquire
any patented, registered or applied for intellectual property or any securities
or (b) acquire any other personal property required to be delivered to the
Agent as Collateral hereunder or under any of the Collateral Documents, the
Borrower shall immediately notify the Agent of same. Each Credit Party shall
take such action (including, but not limited to, the actions set forth in
Sections 5.1(e)), as reasonably requested by the Agent and at its own expense,
to ensure that the Agent has a perfected Lien in all owned personal property of
the Credit Parties as set forth in the Security Agreements and the Pledge
Agreements (whether now owned or hereafter acquired), subject only to Permitted
Liens. Each Credit Party shall adhere to the covenants regarding the location
of personal property as set forth in the Security Agreements.
7.11 Use of Proceeds.
The Credit Parties will use the proceeds of the Loans solely (a) to
provide working capital, (b) to make Capital Expenditures and (c) for general
corporate purposes. The Credit Parties will use the Letters of Credit solely
for the purposes set forth in Section 2.2(a).
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7.12 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit
Party will permit representatives appointed by the Agent or any Lender,
including, without limitation, independent accountants, agents, attorneys and
appraisers to visit and inspect such Credit Party's property, including its
books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and
to write down and record any information such representative obtains and shall
permit the Agent or its representatives or any Lender or its representatives to
investigate and verify the accuracy of information provided to the Lenders,
including, without limitation, the performance of collateral valuation reviews
from time to time to assess the composition of the Borrowing Base Assets, and
to discuss all such matters with the officers, employees and representatives of
the Credit Parties. The Credit Parties agree that the Agent may conduct such
collateral reviews, at the Credit Parties' expense, as it reasonably deems
appropriate.
7.13 Additional Credit Parties.
At the time any Person becomes a Subsidiary of a Credit Party, the
Borrower shall so notify the Agent and promptly thereafter (but in any event
within 30 days after the date thereof) shall cause such Person to (a) if it is
a Domestic Subsidiary, execute a Joinder Agreement in substantially the same
form as Exhibit 7.13, (b) cause all of the capital stock of such Person (if it
is a Domestic Subsidiary) or 65% of the capital stock of such Person (if it is
a First Tier Foreign Subsidiary) to be delivered to the Agent (together with
undated stock powers signed in blank) and pledged to the Agent pursuant to an
appropriate pledge agreement in substantially the form of the Pledge Agreement
(or a joinder to the existing Pledge Agreement) and otherwise in a form
reasonably acceptable to the Agent, (c) if such Person is a Domestic
Subsidiary, pledge all of its assets to the Agent pursuant to a security
agreement in substantially the form of the Security Agreement (or a joinder to
the existing Security Agreement) and otherwise in a form reasonably acceptable
to the Agent, and (d) if such Person is a Domestic Subsidiary and has any
Subsidiaries, (A) deliver all of the capital stock of such Domestic
Subsidiaries owned by it and 65% of the stock of the First Tier Foreign
Subsidiaries owned by it (together with undated stock powers signed in blank)
to the Agent and (B) execute a pledge agreement in substantially the form of
the Pledge Agreement (or a joinder to the existing Pledge Agreement) and
otherwise in a form acceptable to the Agent, (e) if such Person is a Domestic
Subsidiary and leases any real property, cause to be delivered in a
commercially reasonable manner a landlord waiver or estoppel letter with
respect thereto in a form acceptable to the Agent) and (f) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, environmental reports, landlord's waivers, certified resolutions
and other organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above), all in form, content and scope reasonably satisfactory to
the Agent.
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7.14 Year 2000 Compliance.
Each Credit Party will promptly notify the Agent in the event such
Credit Party discovers or determines that any computer application that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 compliant, except to the extent that such failure could reasonably be
expected to have a Material Adverse Effect.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations then due and payable hereunder, have
been paid in full and the Commitments and Letters of Credit hereunder shall
have terminated:
8.1 Indebtedness.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising (i) under this Credit Agreement
and the other Credit Documents and (ii) under the Maxim Group Credit
Agreement and the other Credit Documents (as defined in the Maxim
Group Credit Agreement);
(b) Indebtedness existing as of the Closing Date as
referenced in Section 6.10 (and renewals, refinancings, replacements
or extensions thereof on terms and conditions no more favorable, in
the aggregate, to such creditor than such existing Indebtedness and in
a principal amount not in excess of that outstanding as of the date of
such renewal, refinancing, replacement or extension);
(c) Indebtedness in respect of current accounts payable
and accrued expenses incurred in the ordinary course of business and
to the extent not current, accounts payable and accrued expenses that
are subject to bona fide dispute;
(d) Indebtedness owing by a Credit Party to another
Credit Party.
(e) purchase money Indebtedness (including obligations
in respect of Capital Leases or Synthetic Leases) to finance the
purchase of fixed assets (including equipment); provided that (i) the
total of all such Indebtedness for all such Persons taken together
shall not exceed an aggregate principal amount of $1,000,000 at any
one time outstanding (in addition to any such Indebtedness referred to
in subsection (b) above); (ii) such Indebtedness when incurred shall
not exceed the purchase price of the asset(s) financed; and
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(iii) no such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the time of
such refinancing;
(f) Subordinated Guarantees;
(g) Indebtedness arising from Hedging Agreements entered
into in the ordinary course of business and not for speculative
purposes; and
(h) other unsecured Indebtedness up to $500,000, in the
aggregate, at any one time outstanding.
8.2 Liens.
No Credit Party will, nor will it permit its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
No Credit Party will, nor will it permit its Subsidiaries to, alter
the character of its business from that conducted as of the Effective Date or
engage in any business other than the business conducted as of the Effective
Date and activities which are substantially similar or related thereto or
logical extensions thereof.
8.4 Consolidation and Merger.
No Credit Party will, nor will it permit any Subsidiary to, enter into
any transaction of merger or consolidation or liquidate, wind up or dissolve
itself; provided that a Credit Party or a Subsidiary of a Credit Party may
merge or consolidate with or into another Credit Party if the following
conditions are satisfied:
(a) the Agent is given prior written notice of such
action;
(b) if the merger or consolidation involves a Credit
Party, the Person formed by such consolidation or into which a Credit
Party is merged shall either (i) be such Credit Party or (ii) be a
Domestic Subsidiary and expressly assume in writing all of the
obligations of such Credit Party under the Credit Documents; provided
that if the transaction is between the Borrower and another Person,
the Borrower must be the surviving entity;
(c) the Credit Parties execute and deliver such
documents, instruments and certificates as the Agent may request
(including, if necessary, to maintain its perfection and priority in
the Collateral pledged pursuant to the Collateral Documents);
(d) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
and
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(e) the Borrower delivers to the Agent an officer's
certificate demonstrating compliance with clause (b) or (c) above, as
applicable, and an opinion of counsel stating that such consolidation
or merger and any written agreement entered into in connection
therewith, comply with this Section 8.4.
8.5 Sale or Lease of Assets.
No Credit Party will, nor will it permit its Subsidiaries to, convey,
sell, lease, transfer or otherwise dispose of, in one transaction or a series
of transactions, all or any part of its business or assets whether now owned or
hereafter acquired, including, without limitation, inventory, receivables,
equipment, real property interests (whether owned or leasehold), and
securities, other than (a) any inventory sold or otherwise disposed of in the
ordinary course of business; (b) the sale, lease, transfer or other disposal by
a Credit Party (other than the Borrower) of any or all of its assets to another
Credit Party; (c) obsolete, slow-moving, idle or worn-out assets no longer used
or useful in its business or the trade in of equipment for equipment in better
condition or of better quality; (d) the transfer of assets which constitute a
Permitted Investment; (e) the lease or sublease of real property interests in
the ordinary course of business; (f) accounts receivable and related rights and
interests sold to GE Capital pursuant to the terms of the GE Capital Dealer
Agreement and (g) other sales of assets not to exceed $2,500,000, in the
aggregate, during the term of this Credit Agreement.
Upon a sale of assets permitted by this Section 8.5, the Agent shall
promptly deliver to the Borrower, upon the Borrower's request and at the
Borrower's expense, such documentation as is reasonably necessary to evidence
the release of the Agent's security interest in such assets, including, without
limitation, amendments or terminations of UCC financing statements.
8.6 Sale Leasebacks.
No Credit Party will, nor will it permit its Subsidiaries to, directly
or indirectly become or remain liable as lessee or as guarantor or other surety
with respect to any lease of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, (a) which such Credit Party or its
Subsidiary has sold or transferred or is to sell or transfer to any other
Person other than a Credit Party or (b) which such Credit Party or its
Subsidiary intends to use for substantially the same purpose as any other
property which has been sold or is to be sold or transferred by such Credit
Party to any Person in connection with such lease.
8.7 Advances, Investments and Loans.
No Credit Party will, nor will it permit its Subsidiaries to, make any
Investments except for Permitted Investments.
8.8 Restricted Payments.
No Credit Party will, nor will it permit its Subsidiaries to, directly
or indirectly, (a) declare or pay any dividends or make any other distribution
upon any shares of its capital stock of any class
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or (b) purchase, redeem or otherwise acquire or retire or make any provisions
for redemption, acquisition or retirement of any shares of its capital stock of
any class or any warrants or options to purchase any such shares; provided that
(i) any Subsidiary of the Borrower may pay dividends to its parent and (ii) any
Credit Party may pay dividends to the Parent.
8.9 Transactions with Affiliates.
No Credit Party will, nor will it permit its Subsidiaries to, enter
into any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder, Subsidiary or
Affiliate other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm's-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
No Credit Party will, nor will it permit its Subsidiaries to, (a)
change its fiscal year or (b) in any manner that would reasonably be likely to
adversely affect the rights of the Lenders, change its articles or certificate
of incorporation or its bylaws.
8.11 No Limitations.
No Credit Party will, nor will it permit its Subsidiaries to, directly
or indirectly, create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Person to (a) pay dividends or make any other
distribution on any of such Person's capital stock, (b) pay any Indebtedness
owed to any other Credit Party, (c) make loans or advances to any other Credit
Party or (d) transfer any of its property to any other Credit Party, except for
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment or net worth provisions in any lease governing a leasehold
interest, (ii) any agreement or other instrument of a Person existing at the
time it becomes a Subsidiary of a Credit Party; provided that such encumbrance
or restriction is not applicable to any other Person, or any property of any
other Person, other than such Person becoming a Subsidiary of a Credit Party
and was not entered into in contemplation of such Person becoming a Subsidiary
of a Credit Party, (iii) this Credit Agreement and the other Credit Documents,
(iv) the Maxim Group Credit Agreement and the other Credit Documents (as
defined in the Maxim Group Credit Agreement) and (v) the Indenture.
8.12 No Other Negative Pledges.
No Credit Party will, nor will it permit its Subsidiaries to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation
except as set forth in (a) the Credit Documents, (b) the Credit Documents (as
defined in the Maxim Group Credit Agreement) and (c) the Indenture.
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8.13 Limitation on Foreign Operations.
The Credit Parties will not, nor will they permit any of their
Subsidiaries to, allow the Foreign Subsidiaries to have assets which in the
aggregate constitute more than 5% of Total Assets at any time.
8.14 Capital Expenditures.
The Credit Parties shall not, nor will they permit any of their
Subsidiaries to, make Capital Expenditures of more than (i) $15,000,000 in the
aggregate in fiscal year 1999 and (ii) $15,000,000 in the aggregate in fiscal
year 2000.
8.15 Prepayments of Indebtedness.
No Credit Party will, nor will it permit any of its Subsidiaries to,
(a) amend or modify (or permit the amendment or modification of) any of the
terms of any Indebtedness if such amendment or modification would add or change
any terms in a manner adverse to the Lenders, including but not limited to,
shortening final maturity or average life to maturity of such Indebtedness or
requiring any payment to be made sooner than originally scheduled or increasing
the interest rate applicable thereto or change any subordination provision
thereof, (b) during the existence of a Default or Event of Default, or if a
Default or Event of Default would be caused as a result thereof make (or give
any notice with respect thereto) any voluntary or optional payment or
prepayment or redemption or acquisition for value of (including, without
limitation, by way of depositing money or securities with the trustee with
respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any other Indebtedness.
8.16 Limitation on Store Openings.
The Credit Parties will not, nor will they permit their Subsidiaries
to, open or start up, in the aggregate, more than ten (10) new stores in any
fiscal year of the Borrower.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence, and during the
continuance, of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall default in the
payment (i) when due of any principal of any of the Loans or any
reimbursement obligation arising from drawings under Letters of Credit
or (ii) within three Business Days of when due of any interest on the
Loans
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or any fees or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or
observance of any term, covenant or agreement contained in
Sections 7.2, 7.3, 7.5, 7.11, 7.12, or 8.1 through 8.16
inclusive;
(ii) default in the due performance or
observance by it of any term, covenant or agreement contained
in Sections 7.1 and such default shall continue unremedied
for a period of five Business Days;
(iii) default in the due performance or
observance by it of any term, covenant or agreement (other
than those referred to in subsections (a), (b) or (c)(i) or
(ii) of this Section 9.1) contained in this Credit Agreement
and such default shall continue unremedied for a period of at
least 30 days after the earlier of a Credit Party becoming
aware of such default or notice thereof given by the Agent.
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents and such default shall
continue unremedied for a period of at least 30 days after the earlier
of a Credit Party becoming aware of such default or notice thereof
given by the Agent, or (ii) any Credit Document shall fail to be in
full force and effect or any Credit Party shall so assert or any
Credit Document shall fail to give the Agent and/or the Lenders the
security interests, liens, rights, powers and privileges purported to
be created thereby.
(e) Guaranties. The guaranty given by the Credit Parties
hereunder or by any Additional Credit Party hereafter or any provision
thereof shall cease to be in full force and effect, or any guarantor
thereunder or any Person acting by or on behalf of such guarantor
shall deny or disaffirm such Guarantor's obligations under such
guaranty.
(f) Bankruptcy, etc. The occurrence of any of the
following: (i) a court or governmental agency having jurisdiction in
the premises shall enter a decree or order for relief in respect of
any Credit Party or any of its Subsidiaries in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of any Credit
Party or any of its Subsidiaries or for any substantial part of its
property or ordering the winding up or liquidation of its affairs; or
(ii) an involuntary case under any
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applicable bankruptcy, insolvency or other similar law now or
hereafter in effect is commenced against any Credit Party or any of
its Subsidiaries and such petition remains unstayed and in effect for
a period of 60 consecutive days; or (iii) any Credit Party or any of
its Subsidiaries shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of such Person or any
substantial part of its property or make any general assignment for
the benefit of creditors; or (iv) any Credit Party or any of its
Subsidiaries shall admit in writing its inability to pay its debts
generally as they become due or any action shall be taken by such
Person in furtherance of any of the aforesaid purposes.
(g) Defaults under Other Agreements.
(i) Except for the Indenture Default, a Credit
Party or any of its Subsidiaries shall default in the due
performance or observance (beyond the applicable grace period
with respect thereto) of any material obligation or condition
of any contract or lease to which it is a party; or
(ii) With respect to any Indebtedness in excess
of $500,000 (other than Indebtedness outstanding under this
Credit Agreement) of a Credit Party or any of their
Subsidiaries (i) such Person shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if
any) with respect to any such Indebtedness, or (B) except for
the Indenture Default, default (after giving effect to any
applicable grace period) in the observance or performance
relating to such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any
other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to
cause, or permit, the holder or holders of such Indebtedness
(or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of
time is required) any such Indebtedness to become due prior
to its stated maturity; or (ii) any such Indebtedness shall
be declared due and payable, or required to be prepaid other
than by a regularly scheduled required prepayment prior to
the stated maturity thereof; or (iii) any such Indebtedness
shall mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of the Credit Parties and its
Subsidiaries involving a liability of $500,000 or more, in the
aggregate, (to the extent not paid or covered by insurance provided by
a carrier who has acknowledged coverage) and such judgments, orders or
decrees (i) are the subject of any enforcement proceeding commenced by
any creditor or (ii) shall continue unsatisfied, undischarged and
unstayed for a period ending on the first to occur of (A) the last day
on which such judgment, order or decree becomes final and unappealable
or (B) 60 days.
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(i) ERISA. The occurrence of any of the following events
or conditions: (A) any "accumulated funding deficiency," as such term
is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any Plan, or any
lien shall arise on the assets of any Credit Party or any ERISA
Affiliate in favor of the PBGC or a Plan; (B) a Termination Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination
of such Plan for purposes of Title IV of ERISA; (C) a Termination
Event shall occur with respect to a Multiemployer Plan or Multiple
Employer Plan, which is, in the reasonable opinion of the Agent,
likely to result in (i) the termination of such Plan for purposes of
Title IV of ERISA, or (ii) any Credit Party or any ERISA Affiliate
incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency (within the meaning of Section 4245 of ERISA) of such Plan;
or (D) any prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Credit Party or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which any Credit Party or any ERISA
Affiliate has agreed or is required to indemnify any person against
any such liability.
(j) Ownership. There shall occur a Change of Control.
(k) Maxim Group Credit Agreement. There shall occur an
Event of Default (as defined in the Maxim Group Credit Agreement)
under the Maxim Group Credit Agreement.
(l) Default on Subordinated Guarantees. There shall
occur (i) (other than the Indenture Default) an Event of Default (as
defined in the Indenture) under the Indenture or (ii) a Change of
Control (as defined in the Indenture) under the Indenture.
(m) Indenture Default. The failure of the Credit Parties
to receive a written waiver of the Indenture Default in form and
substance satisfactory to the Agent on or before January 31, 1999.
(n) Action by Subordinated Debt Holders. The holders of
the Subordinated Debt or any Person acting on behalf of the holders of
the Subordinated Debt shall take any remedial action (whether
affirmative or by omission) with respect to the Indenture Default
(other than the waiver thereof), including but not limited to,
acceleration of the Subordinated Debt, written demand with respect to
the Subordinated Debt or the pursuit of any assets of the Credit
Parties in connection therewith.
9.2 Acceleration; Remedies.
Upon the occurrence, and during the continuance, of an Event of
Default, and at any time thereafter unless and until such Event of Default has
been waived in writing by the Required Lenders (or the Lenders as may be
required hereunder) the Agent shall, upon the request and direction of the
Required Lenders, by written notice to the Borrower, take the following actions
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without prejudice to the rights of the Agent or any Lender to enforce its
claims against the Credit Parties, except as otherwise specifically provided
for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal
of and any accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by a
Credit Party to any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights
and interests created and existing under the Credit Documents,
including, without limitation, all rights and remedies existing under
the Collateral Documents, all rights and remedies against a Guarantor
and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Agent or the
Lenders, which notice or other action is expressly waived by the Credit
Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Lender has, to the extent permitted by law, a separate right of
payment and shall be considered a separate "creditor" holding a separate
"claim" within the meaning of Section 101(5) of the Bankruptcy Code or any
other insolvency statute.
9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
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FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent or any of the Lenders in connection with enforcing the
rights of the Lenders under the Credit Documents and any protective
advances made by the Agent or any of the Lenders with respect to the
Collateral under or pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Agent, the Issuing
Lender or any Lender;
THIRD, to the payment of all accrued interest payable to the
Lenders hereunder and all other obligations which shall have become
due and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" and "SECOND" above;
FOURTH, to the payment of the outstanding principal amount of
the Loans and unreimbursed drawings under Letters of Credit, to the
payment or cash collateralization of the outstanding LOC Obligations,
pro rata as set forth below;
FIFTH, to any principal amounts outstanding under Hedging
Agreements between a Credit Party and a Lender, pro rata, as set forth
below; and
SIXTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans,
LOC Obligations and obligations under Hedging Agreements held by such Lender
bears to the aggregate then outstanding Loans, LOC Obligations and obligations
under Hedging Agreements) of amounts available to be applied; and (c) to the
extent that any amounts available for distribution pursuant to clause "FOURTH"
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Agent in a cash collateral account
and applied (x) first, to reimburse the Issuing Lender from time to time for
any drawings under such Letters of Credit and (y) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FOURTH," and "FIFTH" above in the manner provided in this
Section 9.3.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
(a) Each Lender hereby designates and appoints NationsBank, N.A.
as Agent of such Lender to act as specified herein and the other Credit
Documents, and each such Lender hereby
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authorizes the Agent, as the agent for such Lender, to take such action on its
behalf under the provisions of this Credit Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated by the terms hereof and of the other Credit Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
the Agent shall not have any duties or responsibilities, except those expressly
set forth herein and therein, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the other Credit
Documents, or shall otherwise exist against the Agent. The provisions of this
Section are solely for the benefit of the Agent and the Lenders and none of the
Credit Parties shall have any rights as a third party beneficiary of the
provisions hereof. In performing its functions and duties under this Credit
Agreement and the other Credit Documents, the Agent shall act solely as the
agent of the Lenders and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency or trust with or for any
Credit Party.
(b) Each Lender hereby consents to and approves the terms of the
Intercreditor Agreement, a copy of which is attached hereto as Exhibit 10.1(b).
By execution hereof, the Lenders acknowledge the terms of the Intercreditor
Agreement and agree to be bound by the terms thereof and further authorize and
direct the Agent to enter into the Intercreditor Agreement on behalf of the
Lenders.
10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for
its or such Person's own gross negligence or willful misconduct) or responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained
herein or in any of the other Credit Documents or in any certificate, report,
document, financial statement or other written or oral statement referred to or
provided for in, or received by the Agent under or in connection herewith or in
connection with the other Credit Documents, or enforceability or sufficiency
therefor of any of the other Credit Documents, or for any failure of the
Borrower to perform its obligations hereunder or thereunder. The Agent shall
not be responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by a Borrower or any Credit Party
in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection
herewith or
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therewith furnished or made by the Agent to the Lenders or by or on behalf of
the Credit Parties to the Agent or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the
use of the proceeds of the Loans or the use of the Letters of Credit or of the
existence or possible existence of any Default or Event of Default or to
inspect the properties, books or records of the Credit Parties. The Agent is
not a trustee for the Lenders and owes no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any of the Credit Parties, independent
accountants and other experts selected by the Agent with reasonable care). The
Agent may deem and treat the Lenders as the owner of its interests hereunder
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent in accordance with Section
11.3(b). The Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
unless it shall first receive such advice or concurrence of the Required
Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, hereunder or under any of the other Credit Documents in accordance
with a request of the Required Lenders (or to the extent specifically provided
in Section 11.6, all the Lenders) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders and as is permitted by the
Credit Documents.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent, NMS nor any
of their officers, directors, employees, agent, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the Agent
or any affiliate thereof hereinafter taken, including any review of the affairs
of any Credit Party, shall be deemed to constitute any representation or
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warranty by the Agent to any Lender. Each Lender represents to the Agent and
NMS that it has, independently and without reliance upon the Agent or NMS or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties and made its own decision to make its
Loans hereunder and enter into this Credit Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
NMS or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Credit
Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent and NMS shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Credit Parties which may come
into the possession of the Agent, NMS or any of their officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Agent in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so), ratably according to their respective Commitments
(or if the Commitments have expired or been terminated, in accordance with the
respective principal amounts of outstanding Loans and Participation Interest of
the Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following payment in full of the Credit Party Obligations) be imposed
on, incurred by or asserted against the Agent in its capacity as such in any
way relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent. If any indemnity furnished to the Agent for any
purpose shall, in the opinion of the Agent, be insufficient or become impaired,
the Agent may call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished. The
agreements in this Section shall survive the payment of the Credit Party
Obligations and all other amounts payable hereunder and under the other Credit
Documents.
10.8 Agent in Its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with a Borrower or any other
Credit Party as though the Agent were not the Agent hereunder. With respect to
the Loans made and Letters of Credit issued and all obligations
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owing to it, the Agent shall have the same rights and powers under this Credit
Agreement as any Lender and may exercise the same as though they were not the
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 60 days after the notice of resignation, then the retiring Agent shall
select a successor Agent, provided such successor is an Eligible Assignee. Upon
the acceptance of any appointment as the Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as the Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Credit
Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described in
Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Credit Party to the Lenders hereunder, under the Notes, the other Credit
Documents or otherwise,
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irrespective of whether the Agent or the Lenders shall have made any demand
hereunder and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to have
been made immediately upon the occurrence of an Event of Default even though
such charge is made or entered on the books of such Lender subsequent thereto.
The Credit Parties hereby agree that any Person purchasing a participation in
the Loans and Commitments hereunder pursuant to Section 11.3(c) or 3.8 may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that none of
the Credit Parties may assign and transfer any of its interests
(except as permitted by Section 8.4 or 8.5) without the prior written
consent of the Lenders; and provided further that the rights of each
Lender to transfer, assign or grant participations in its rights
and/or obligations hereunder shall be limited as set forth below in
this Section 11.3.
(b) Assignments. Each Lender may assign to one or more
Eligible Assignees all or a portion of its rights and obligations
under this Credit Agreement (including, without limitation, all or a
portion of its Loans, its Notes, and its Commitments); provided,
however, that:
(i) each such assignment shall be to an
Eligible Assignee;
(ii) except in the case of an assignment to
another Lender or an assignment of all of a Lender's rights
and obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of
$1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be
of a constant, and not varying, percentage of all of its
rights and obligations under this Credit Agreement and the
Notes;
(iv) the parties to such assignment shall
execute and deliver to the Agent for its acceptance an
Assignment Agreement in substantially the form of Exhibit
11.3(b), together with a processing fee from the assignor of
$3,500.
Upon execution, delivery, and acceptance of such Assignment Agreement,
the assignee thereunder shall be a party hereto and, to the extent of
such assignment, have the obligations, rights, and benefits of a
Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Credit Agreement. Upon the consummation of any assignment
pursuant to this
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Section 11.3(b), the assignor, the Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to
the assignor and the assignee. If the assignee is not incorporated
under the laws of the United States of America or a state thereof, it
shall deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of taxes in accordance with
Section 3.13.
By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (A) such assigning Lender
warrants that it is the legal and beneficial owner of the interest
being assigned thereby free and clear of any adverse claim and the
assignee warrants that it is an Eligible Assignee; (B) except as set
forth in clause (A) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant
hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, any of the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto or the financial
condition of any Credit Party or the performance or observance by any
Credit Party of any of its obligations under this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto; (C) such assignee represents and
warrants that it is legally authorized to enter into such assignment
agreement; (D) such assignee confirms that it has received a copy of
this Credit Agreement, the other Credit Documents and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such assignment agreement;
(E) such assignee will independently and without reliance upon the
Agent, such assigning Lender or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement and the other Credit Documents; (F)
such assignee appoints and authorizes the Agent to take such action on
its behalf and to exercise such powers under this Credit Agreement or
any other Credit Document as are delegated to the Agent by the terms
hereof or thereof, together with such powers as are reasonably
incidental thereto; and (G) such assignee agrees that it will perform
in accordance with their terms all the obligations which by the terms
of this Credit Agreement and the other Credit Documents are required
to be performed by it as a Lender.
(c) Register. The Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
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(d) Acceptance. Upon its receipt of an Assignment
Agreement executed by the parties thereto, together with any Note
subject to such assignment and payment of the processing fee, the
Agent shall, if such Assignment Agreement has been completed and is in
substantially the form of Exhibit 11.3(b) hereto, (i) accept such
Assignment Agreement, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties
thereto.
(e) Participations. Each Lender may sell participations
to one or more Persons in all or a portion of its rights, obligations
or rights and obligations under this Credit Agreement (including all
or a portion of its Commitments and its Loans); provided, however,
that (i) such Lender's obligations under this Credit Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield
protection provisions contained in Sections 3.9 through 3.14,
inclusive, and the right of set-off contained in Section 11.2, and
(iv) the Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
this Credit Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to its Loans and its
Notes and to approve any amendment, modification, or waiver of any
provision of this Credit Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of or the
rate at which interest is payable on such Loans or Notes, extending
any scheduled principal payment date or date fixed for the payment of
interest on such Loans or Notes, extending its Commitments or
releasing all or substantially all of the Collateral securing the
Credit Party Obligations).
(f) Nonrestricted Assignments. Notwithstanding any other
provision set forth in this Credit Agreement, any Lender may at any
time assign and pledge all or any portion of its Loans and its Notes
to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(g) Information. Any Lender may furnish any information
concerning the Borrower or any of its Subsidiaries in the possession
of such Lender from time to time to assignees and participants
(including prospective assignees and participants), subject, however,
to the provisions of Section 11.16 hereof.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Borrower or any Credit Party and the Agent or
any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right,
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power or privilege hereunder or thereunder. The rights and remedies provided
herein are cumulative and not exclusive of any rights or remedies which the
Agent or any Lender would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket
costs and expenses of (i) the Agent and NMS in connection with (A) the
negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of Xxxxx & Xxx Xxxxx, PLLC, special counsel to the Agent),
(B) any amendment, waiver or consent relating hereto and thereto including, but
not limited to, any such amendments, waivers or consents resulting from or
related to any work-out, renegotiation or restructure relating to the
performance by the Credit Parties under this Credit Agreement and (C) searches
of the UCC and the preparation and filing of UCC financing statements in
connection with such searches subsequent to the Closing Date (including without
limitation, the reasonable fees and expenses of Xxxxx & Xxx Xxxxx, PLLC) and
(ii) the Agent and the Lenders in connection with (A) enforcement of the Credit
Documents and the documents and instruments referred to therein, including,
without limitation, in connection with any such enforcement, the reasonable
fees and disbursements of counsel for the Agent and each of the Lenders, and
(B) any bankruptcy or insolvency proceeding of a Credit Party of any of its
Subsidiaries and (b) indemnify the Agent, NMS and each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other proceeding
(whether or not the Agent, NMS or Lender is a party thereto) related to (i) the
entering into and/or performance of any Credit Document or the use of proceeds
of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding, (ii) any Environmental Claim, (iii) any claims for Non-Excluded
Taxes (but excluding in the case of (i), (ii) and (iii) above, any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
gross negligence or willful misconduct on the part of the Person to be
indemnified).
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is
in writing and signed by the Required Lenders and the then Credit Parties;
provided that no such amendment, change, waiver, discharge or termination shall
without the consent of each Lender affected thereby:
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(a) extend the final maturity of any Loan or of any
reimbursement obligation; or any portion thereof, arising from
drawings under Letters of Credit;
(b) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan or
of any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit;
(d) increase or extend the Revolving Committed Amount,
the LOC Committed Amount or the Commitment of any Lender (it being
understood and agreed that a waiver of any Default or Event of Default
or a waiver of any mandatory reduction in the Revolving Committed
Amount or the LOC Committed Amount shall not constitute a change in
the terms of the Revolving Committed Amount, LOC Committed Amount or
the Commitment of any Lender);
(e) release all or substantially all of the Collateral
securing the Credit Party Obligations hereunder (provided that the
Agent may, without consent from any other Lender, release any
Collateral that is sold or transferred by a Credit Party in
conformance with Section 8.5);
(f) release the Borrower from its obligations or release
all or substantially all of the other Credit Parties from their
respective obligations under the Credit Documents;
(g) amend, modify or waive any provision of this Section
or Section 3.4(a), 3.4(b), 3.4(c), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 5.2, 9.1(a), 11.2, 11.3 or 11.5;
(h) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders; or
(i) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under (or in respect of)
the Credit Documents.
Notwithstanding the above, no provisions of Section 10 may be amended or
modified without the consent of the Agent, and no provisions of Section 2.2 may
be amended or modified without the consent of the Issuing Lender.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any reorganization plan that affects the Loans or
the Letters of Credit, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
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11.7 Counterparts/Telecopy.
This Credit Agreement may be executed in any number of counterparts,
each of which where so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. Delivery of executed
counterparts by telecopy shall be as effective as an original and shall
constitute a representation that an original will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties
All indemnities set forth herein and all representations and
warranties made herein shall survive the execution and delivery of this Credit
Agreement, the making of the Loans, the issuance of the Letters of Credit and
the repayment of the Loans, LOC Obligations and other obligations and the
termination of the Commitments hereunder.
11.11 Governing Law; Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA. Any legal action or proceeding with
respect to this Credit Agreement or any other Credit Document may be
brought in the courts of the State of North Carolina or of the United
States for the Western District of North Carolina, and, by execution
and delivery of this Credit Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Credit Party further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to
Section 11.1, such service to become effective 10 days after such
mailing. Nothing herein shall affect the right of a Lender to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against a Credit Party in any
other jurisdiction. Each Credit Party agrees that a final judgment in
any action or proceeding shall be conclusive and
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may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law; provided that nothing in this
Section 11.11(a) is intended to impair a Credit Party's right under
applicable law to appeal or seek a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement or any other Credit Document brought in
the courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Further Assurances.
The Credit Parties agree, upon the request of the Agent, to promptly
take such actions, as reasonably requested, as is necessary to carry out the
intent of this Credit Agreement and the other Credit Documents, including, but
not limited to, such actions as are necessary to ensure that the Lenders have a
perfected security interest in the Collateral subject to no Liens other than
Permitted Liens.
11.16 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to
keep confidential and to cause any representative designated under Section 7.12
to keep confidential any non-public information from time to time supplied to
it under any Credit Document; provided, however, that nothing herein shall
prevent the disclosure of any such information to (a) the extent a Lender in
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good faith believes such disclosure is required by Requirement of Law, (b)
counsel for a Lender or to its accountants, (c) bank examiners or auditors or
comparable Persons, (d) any affiliate of a Lender, (e) any other Lender, or any
assignee, transferee or participant, or any potential assignee, transferee or
participant, of all or any portion of any Lender's rights under this Agreement
who is notified of the confidential nature of the information or (f) any other
Person in connection with any litigation to which any one or more of the
Lenders is a party; and provided further that no Lender shall have any
obligation under this Section 11.16 to the extent any such information becomes
available on a non-confidential basis from a source other than a Credit Party
or that any information becomes publicly available other than by a breach of
this Section 11.16 by any Lender or representative thereof.
11.17 Entirety.
This Credit Agreement together with the other Credit Documents and the
Fee Letter represent the entire agreement of the parties hereto and thereto,
and supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
11.18 Binding Effect; Continuing Agreement.
(a) This Credit Agreement shall become effective at
such time when all of the conditions set forth in Section 5.1 have
been satisfied or waived by the Lenders and it shall have been
executed by the Borrower, the Guarantors and the Agent, and the Agent
shall have received copies hereof (telefaxed or otherwise) which, when
taken together, bear the signatures of each Lender, and thereafter
this Credit Agreement shall be binding upon and inure to the benefit
of the Borrower, the Guarantors, the Agent and each Lender and their
respective successors and assigns.
(b) This Credit Agreement shall be a continuing
agreement and shall remain in full force and effect until all Loans,
LOC Obligations, interest, fees and other Credit Party Obligations
have been paid in full and all Commitments and Letters of Credit have
been terminated. Upon termination, the Credit Parties shall have no
further obligations (other than the indemnification provisions that
survive) under the Credit Documents and the Agent shall, at the
request and expense of the Borrower, deliver all Collateral in its
possession to the Borrower and release all Liens on Collateral;
provided that should any payment, in whole or in part, of the Credit
Party Obligations be rescinded or otherwise required to be restored or
returned by the Agent or any Lender, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, then the
Credit Documents shall automatically be reinstated and all Liens of
the Lenders shall reattach to the Collateral and all amounts required
to be restored or returned and all costs and expenses incurred by the
Agent or Lender in connection therewith shall be deemed included as
part of the Credit Party Obligations.
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
MAXIM RETAIL STORES, INC., a
Georgia corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: VP
-------------------------------------
GUARANTORS:
MAXIM INSTALLATION SERVICES, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: VP
-------------------------------------
C&S TEXTILES, INC., an Idaho corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: VP
-------------------------------------
[SIGNATURES CONTINUE]
MAXIM RETAIL STORES, INC.
CREDIT AGREEMENT
93
LENDERS:
NATIONSBANK, N.A., individually in its
capacity as a Lender, in its capacity as
the Agent, and in its capacity as the
Issuing Lender
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
[SIGNATURES CONTINUE]
MAXIM RETAIL STORES, INC.
CREDIT AGREEMENT
94
SUNTRUST BANK, ATLANTA
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
-------------------------------------
Title: Banking Officer
------------------------------------
MAXIM RETAIL STORES, INC.
CREDIT AGREEMENT
