Exhibit 4.1
EXECUTION COPY
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 6, 1999
among
NATIONAL EQUIPMENT SERVICES, INC.,
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
FIRST UNION NATIONAL BANK,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS...................................................................................... 1
1.1 Definitions........................................................................................ 1
1.2 Computation of Time Periods........................................................................ 25
1.3 Accounting Terms................................................................................... 25
SECTION 2 CREDIT FACILITIES................................................................................ 26
2.1 Revolving Loans.................................................................................... 26
2.2 Letter of Credit Subfacility....................................................................... 28
2.3 Swingline Loan Subfacility......................................................................... 33
2.4 Term Loan.......................................................................................... 36
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES................................................... 37
3.1 Default Rate....................................................................................... 37
3.2 Extension and Conversion........................................................................... 37
3.3 Prepayments........................................................................................ 38
3.4 Termination, Reduction and Increase of Revolving Committed Amount.................................. 40
3.5 Fees............................................................................................... 41
3.6 Capital Adequacy................................................................................... 42
3.7 Limitation on Eurodollar Loans..................................................................... 43
3.8 Illegality......................................................................................... 43
3.9 Requirements of Law................................................................................ 44
3.10 Treatment of Affected Loans....................................................................... 45
3.11 Taxes............................................................................................. 45
3.12 Compensation...................................................................................... 47
3.13 Pro Rata Treatment................................................................................ 48
3.14 Sharing of Payments............................................................................... 49
3.15 Payments, Computations, Etc....................................................................... 50
3.16 Evidence of Debt.................................................................................. 52
SECTION 4 GUARANTY......................................................................................... 52
4.1 The Guaranty....................................................................................... 52
4.2 Obligations Unconditional.......................................................................... 53
4.3 Reinstatement...................................................................................... 54
4.4 Certain Additional Waivers......................................................................... 54
4.5 Remedies........................................................................................... 55
4.6 Rights of Contribution............................................................................. 55
4.7 Guarantee of Payment; Continuing Guarantee......................................................... 56
SECTION 5 CONDITIONS....................................................................................... 56
5.1 Closing Conditions................................................................................. 56
5.2 Conditions to all Extensions of Credit............................................................. 60
SECTION 6 REPRESENTATIONS AND WARRANTIES................................................................... 61
6.1 Financial Condition................................................................................ 61
6.2 No Material Change................................................................................. 62
6.3 Organization and Good Standing..................................................................... 62
i
6.4 Power; Authorization; Enforceable Obligations...................................................... 62
6.5 No Conflicts....................................................................................... 63
6.6 No Default......................................................................................... 63
6.7 Ownership.......................................................................................... 63
6.8 Indebtedness....................................................................................... 63
6.9 Litigation......................................................................................... 64
6.10 Taxes............................................................................................. 64
6.11 Compliance with Law............................................................................... 64
6.12 ERISA............................................................................................. 64
6.13 Subsidiaries...................................................................................... 66
6.14 Governmental Regulations, Etc..................................................................... 66
6.15 Purpose of Loans and Letters of Credit............................................................ 67
6.16 Environmental Matters............................................................................. 67
6.17 Intellectual Property............................................................................. 68
6.18 Solvency.......................................................................................... 69
6.19 Investments....................................................................................... 69
6.20 Location of Collateral............................................................................ 69
6.21 Disclosure........................................................................................ 69
6.22 No Burdensome Restrictions........................................................................ 69
6.23 Brokers' Fees..................................................................................... 70
6.24 Labor Matters..................................................................................... 70
6.25 Year 2000 Compliance.............................................................................. 70
6.26 Material Contracts................................................................................ 70
6.27 Senior Debt....................................................................................... 70
SECTION 7 AFFIRMATIVE COVENANTS............................................................................ 71
7.1 Information Covenants.............................................................................. 71
7.2 Preservation of Existence and Franchises........................................................... 75
7.3 Books and Records.................................................................................. 75
7.4 Compliance with Law................................................................................ 75
7.5 Payment of Taxes and Other Indebtedness............................................................ 75
7.6 Insurance; Condemnation............................................................................ 76
7.7 Maintenance of Property............................................................................ 77
7.8 Performance of Obligations......................................................................... 77
7.9 Use of Proceeds.................................................................................... 77
7.10 Audits/Inspections................................................................................ 77
7.11 Financial Covenants............................................................................... 78
7.12 Additional Credit Parties......................................................................... 79
7.13 Environmental Laws................................................................................ 79
7.14 Collateral........................................................................................ 80
7.15 Pledged Real Estate Assets........................................................................ 80
7.16 Revisions or Updates to Schedules................................................................. 81
SECTION 8 NEGATIVE COVENANTS............................................................................... 81
8.1 Indebtedness....................................................................................... 81
8.2 Liens.............................................................................................. 83
8.3 Nature of Business................................................................................. 83
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8.4 Consolidation, Merger, Dissolution, etc............................................................ 83
8.5 Asset Sales........................................................................................ 84
8.6 Investments........................................................................................ 84
8.7 Restricted Payments................................................................................ 84
8.8 Prepayments of Indebtedness, etc................................................................... 85
8.9 Transactions with Affiliates....................................................................... 85
8.10 Accounting; Organizational Documents; Material Contracts.......................................... 85
8.11 Limitation on Restricted Actions.................................................................. 86
8.12 Ownership of Subsidiaries......................................................................... 86
8.13 Sale Leasebacks................................................................................... 86
8.14 No Further Negative Pledges....................................................................... 87
SECTION 9 EVENTS OF DEFAULT................................................................................ 87
9.1 Events of Default.................................................................................. 87
9.2 Acceleration; Remedies............................................................................. 90
SECTION 10 AGENCY PROVISIONS............................................................................... 91
10.1 Appointment, Powers and Immunities................................................................ 91
10.2 Reliance by Agent................................................................................. 92
10.3 Defaults.......................................................................................... 92
10.4 Rights as a Lender................................................................................ 92
10.5 Indemnification................................................................................... 93
10.6 Non-Reliance on Agent and Other Lenders........................................................... 93
10.7 Successor Agent................................................................................... 93
SECTION 11 MISCELLANEOUS................................................................................... 94
11.1 Notices........................................................................................... 94
11.2 Right of Set-Off; Adjustments..................................................................... 95
11.3 Benefit of Agreement.............................................................................. 96
11.4 No Waiver; Remedies Cumulative.................................................................... 98
11.5 Expenses; Indemnification......................................................................... 98
11.6 Amendments, Waivers and Consents.................................................................. 99
11.7 Counterparts...................................................................................... 101
11.8 Headings.......................................................................................... 101
11.9 Survival.......................................................................................... 101
11.10 Governing Law; Submission to Jurisdiction; Venue; Waiver of Trial by Jury........................ 101
11.11 Severability..................................................................................... 102
11.12 Entirety......................................................................................... 102
11.13 Binding Effect; Termination of this Credit Agreement; Termination of Existing Credit Agreement... 103
11.14 Confidentiality.................................................................................. 103
11.15 Conflict......................................................................................... 104
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SCHEDULES
=========
Schedule 1.1(a) Investments
Schedule 1.1(b) Liens
Schedule 2.1(a) Lenders
Schedule 6.13 Subsidiaries
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Collateral Locations
Schedule 6.20(b) Chief Executive Offices/Principal Places of Business
Schedule 6.24 Labor Matters
Schedule 6.26 Material Contracts
Schedule 8.1 Indebtedness
EXHIBITS
========
Exhibit 1 Form of Subordinated Note
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Swingline Note
Exhibit 2.4(f) Form of Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 3.4(b) Form of New Commitment Agreement
Exhibit 5.1(t) Form of Account Designation Letter
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.1(d) Form of Borrowing Base Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 6, 1999 (as
amended, modified, restated or supplemented from time to time, the "Credit
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Agreement"), is by and among NATIONAL EQUIPMENT SERVICES, INC., a Delaware
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corporation (the "Borrower"), the Subsidiary Guarantors (as defined herein), the
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Lenders (as defined herein) and FIRST UNION NATIONAL BANK, as Agent for the
Lenders (in such capacity, the "Agent").
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W I T N E S S E T H
WHEREAS, the Borrower, the Subsidiary Guarantors party thereto, the Lenders
party thereto and the Agent have entered into that certain Credit Agreement,
dated as of July 17, 1998, as amended, pursuant to which the Lenders provided a
$400,000,000 credit facility to the Borrower on the terms and conditions set
forth therein;
WHEREAS, the Borrower has requested that the Lenders amend and restate the
Credit Agreement to, among other things, increase the facility to $700,000,000,
for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
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1.1 Definitions.
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As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Account Designation Letter" has the meaning given to such term in Section
--------------------------
5.1(q) hereof
"Accounts Receivable" means all of each Credit Party's accounts, as such
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term is defined in the UCC, whether now existing or existing in the future,
including, without limitation, all accounts (whether or not specifically listed
on schedules furnished to the Agent) created by or arising from all of each
Credit Party's sales or leases of goods or rendition of services made under any
of each Credit Party's trade names or styles, or through any of each Credit
Party's divisions.
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"Acquisition" means the purchase of a business unit as a going concern
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which purchase may be of (i) the Capital Stock of a Person, (ii) the assets of
such Person through merger or consolidation with such Person or (iii) the plant,
property and equipment of such Person, or a portion thereof, together with the
related current assets and intangible assets of such Person.
"Acquired Company" means any Person (or assets thereof) which is acquired
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pursuant to an Acquisition.
"Additional Commitment" means, with respect to any Lender which executes a
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New Commitment Agreement in accordance with Section 3.4(b), the commitment of
such Lender in an aggregate principal amount up to the amount specified in such
New Commitment Agreement to make Revolving Loans in accordance with the
provisions of Section 2.1(a).
"Additional Credit Party" means each Person that becomes a Subsidiary
-----------------------
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable Percentage for
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Base Rate Loans.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable
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Percentage for Eurodollar Loans.
"Affiliate" means, with respect to any Person, any other Person (i)
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directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
twenty percent (20%) or more of the Capital Stock in such Person. For purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agency and Custodian Agreement" means the Amended and Restated Agency and
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Custodian Agreement, of even date herewith, among the Agent, the Borrower, on
behalf of itself and the other Credit Parties, and Xxxx Xxxxxxxxx.
"Agency Services Address" means First Union National Bank, One First Union
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Center, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attn: Agency
Services, or such other address as may be identified by written notice from the
Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading hereof,
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together with any successors or assigns.
"Agent's Commitment Letter" means that certain letter agreement, dated as
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of June 11, 1999, between the Agent and the Borrower, as amended, modified,
restated or supplemented from time to time.
"Agent's Fee Letters" means those certain letter agreements, dated as of
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June 11, 1999, between the Agent and the Borrower, as amended, modified,
restated or supplemented from time to time.
2
"Agent's Fees" shall have the meaning assigned to such term in Section
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3.5(c).
"Applicable Lending Office" means, for each Lender, the office of such
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Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Agent and the Borrower by written notice as the office by which
its Eurodollar Loans are made and maintained.
"Applicable Percentage" means for Base Rate Loans, Eurodollar Loans and
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Unused Line Fees, the appropriate applicable percentages corresponding to the
Total Debt Leverage Ratio in effect as of the most recent Calculation Date as
shown below:
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Applicable Applicable Applicable
Tier Total Debt Percentage for Percentage for Base Percentagefor
Level Leverage Ratio Eurodollar Loans Rate Loans Unused Line Fees
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Revolving Term Revolving Term
Loans Loan Loans Loan
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1 greater than 4.25 to 1.0 2.50% 2.50% 1.25% 1.25% 0.50%
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2 greater than 3.75 to 1.0 but 2.25% 2.25% 1.00% 1.00% 0.50%
less than or equal to 4.25 to 1.0
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3 greater than 3.25 to 1.0 but 2.00% 2.00% 0.75% 0.75% 0.50%
less than or equal to 3.75 to 1.0
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4 greater than 2.75 to 1.0 but 1.75% 1.75% 0.50% 0.50% 0.375%
less than or equal to 3.25 to 1.0
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5 less than or equal to 2.75 to 1.0 1.50% 1.75% 0.25% 0.50% 0.3125%
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The Applicable Percentages shall be determined and adjusted (a) quarterly on the
date five Business Days after the date on which the Agent has received from the
Borrower the quarterly officer's certificate required to be delivered to the
Agent and the Lenders in accordance with the provisions of Section 7.1(c) and
(b) upon the consummation of a Permitted Acquisition (each such date referred to
in clauses (a) and (b), a "Calculation Date"); provided, however, that (i) the
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initial Applicable Percentages shall be based on the Total Debt Leverage Ratio
in effect on the Closing Date based on the immediately preceding Calculation
Date, and (ii) if the Borrower fails to provide the officer's certificate to the
Agent for any fiscal quarter as required by and within the time limits set forth
in Section 7.1(c), the Applicable Percentages from the applicable date of such
failure shall be based on Tier Level 1 until five Business Days after an
appropriate officer's certificate is provided to the Agent, whereupon the Tier
Level shall be determined by the Total Debt Leverage Ratio set forth in such
certificate. Except as set forth above, each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
Notwithstanding anything to the contrary contained herein, if, at any time, the
Senior Debt Leverage Ratio shall be less than 2.5 to 1.0, the Borrower may elect
to reduce the Applicable Percentages for Revolving Loans (both Base Rate Loans
and Eurodollar Loans) at all Tier Levels by 0.25% provided that the Borrower
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shall have delivered to
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the Agent financial projections for the period commencing with the date of such
election through the last day covered by the financial projections delivered to
the Agent on the Closing Date pursuant to Section 5.1(c)(iv) hereof
demonstrating that, on a Pro Forma Basis, the Senior Debt Leverage Ratio of the
Consolidated Parties shall be at least 0.25 lower than the maximum allowable
Senior Debt Leverage Ratio for the corresponding period as set forth in Section
7.11(c) (such election referred to as a "Price Reduction Election").
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"Asset Disposition" means the disposition of any or all of the assets
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(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, transfer or otherwise, but excluding
(i) dispositions of Equipment Held for Resale in the ordinary course of
business, (ii) dispositions of Rental Equipment by a Consolidated Party in any
calendar month to the extent that the aggregate Net Cash Proceeds from such
dispositions when combined with all other such dispositions previously made by
all the Consolidated Parties in such calendar month do not exceed 5% of the net
book value of all Rental Equipment of the Credit Parties, (iii) dispositions of
obsolete or worn equipment by a Credit Party, other than the sale or other
disposition of equipment described in clauses (i) or (ii) immediately above, in
any fiscal year to the extent that the aggregate Net Cash Proceeds from such
dispositions when combined with all other such dispositions previously made by
all the Consolidated Parties in such fiscal year do not exceed $1,000,000, (iv)
dispositions of Cash Equivalents and (v) dispositions of real estate assets by a
Consolidated Party during any fiscal year to the extent that the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in such fiscal year
do not exceed $5,000,000.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
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States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence of any
----------------
of the following with respect to such Person: (i) a court or governmental agency
having jurisdiction in the premises shall enter a decree or order for relief in
respect of such Person in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or ordering
the winding up or liquidation of its affairs; or (ii) there shall be commenced
against such Person an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any case,
proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
4
"Base Rate" means, for any day, the rate per annum equal to the higher of
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(a) the Federal Funds Rate for such day plus one-half of one percent (0.5%) and
(b) the Prime Rate for such day. 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 Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate determined by
--------------
reference to the Base Rate.
"Borrower" means the Person identified as such in the heading hereof,
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together with any permitted successors and assigns.
"Borrowing Base" means, as of any day, (a) the sum of (i) 85% of Net
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Accounts Receivable, (ii) 50% of net book value of Parts and Supplies Inventory,
(iii) 100% of the net book value of Rental Equipment and (iv) 80% of the net
book value of Equipment Held for Resale, in each case as set forth in the most
recent Borrowing Base Certificate delivered to the Agent and the Lenders in
accordance with the terms of Section 7.1(d) less (b) reserves established from
----
time to time by the Agent in its reasonable discretion.
"Borrowing Base Certificate" has the meaning given to such term in Section
--------------------------
7.1(d) hereof.
"Business Day" means a day other than a Saturday, Sunday or other day on
------------
which commercial banks in Charlotte, North Carolina are authorized or required
by law to close, except that, when used in connection with a Eurodollar Loan,
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such day shall also be a day on which dealings between banks are carried on in
U.S. dollar deposits in London, England.
"Capital Lease" means, as applied to any Person, any lease of any Property
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(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.
"Capital Stock" means (i) in the case of a corporation, capital stock, (ii)
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in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
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guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) U.S. dollar denominated
time deposits and certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each case with
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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
5
by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase agreements
entered into by any Person with a bank or trust company (including any of the
Lenders) or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations 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 primarily of the character
described in the foregoing subdivisions (a) through (d).
"Change of Control" means the occurrence of any of the following events:
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(i) any Person or two or more Persons acting in concert (other than the
Principal Stockholders) shall have acquired "beneficial ownership", directly or
indirectly, of, or shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of, or control over, Voting Stock of the Borrower (or
other securities convertible into such Voting Stock) representing 20% or more of
the combined voting power of all Voting Stock of the Borrower, (ii) a majority
of the Borrower's Board of Directors shall consist of Persons other than
"Continuing Directors," (iii) immediately after any merger, consolidation,
combination, reclassification or recapitalization or similar transaction, the
Principal Stockholders shall be the "beneficial owner", directly or indirectly,
of outstanding shares of stock of the Borrower (or any Person surviving such
transaction) entitling the Principal Stockholders to exercise 50% or more of the
total voting power of all classes of stock of the Borrower (or the surviving
Person in such transaction) entitled to vote in the elections of the directors
and, in an anticipation of, in connection with or as a result of, such
transaction, the Borrower (or such surviving Person) shall have incurred or
issued additional Indebtedness such that the total Indebtedness so incurred or
issued equals at least 50% of the consideration payable in such transaction;
provided, however, that any such transaction shall not be considered a Change of
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Control if the Purchasers shall have participated therein on no less than a pari
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passu basis (assuming conversion of all of the Preferred Stock into common stock
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of the Borrower) with the Principal Stockholders, (iv) the stockholders of the
Borrower shall have approved a reorganization, merger or consolidation or
similar transaction, in each case, with respect to which all or substantially
all the Persons who were the "beneficial owners" of the outstanding shares of
capital stock of the Borrower immediately prior to such reorganization, merger
or consolidation, beneficially own, directly or indirectly, less than 50% of the
Voting Stock of the Borrower (excluding the Voting Stock that the Purchasers
shall be entitled to receive as a result of such reorganization, merger or
consolidation) resulting from such reorganization, merger or consolidation, (v)
the stockholders of the Borrower shall have approved the sale or other
disposition of all or substantially all of the assets of the Borrower in one
transaction or in a series of related transactions, or (vi) any transaction
shall occur, the result of which is that the common stock of the Borrower is not
required to be registered under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the holders of such common stock
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shall not receive common stock of the Person surviving such transaction which is
required to be registered under Section 12 of said Act. As used herein,
"beneficial ownership" and "beneficial owner" shall have the respective meanings
provided in Rule 13d-3 promulgated under the Exchange Act, "Continuing Director"
shall mean any member of the Board of
6
Directors of the Borrower on the Closing Date, any director elected pursuant to
Section 10.10 of the Stock Purchase Agreement and any other member of the Board
of Directors who shall be recommended or elected to succeed a Continuing
Director by a majority of Continuing Directors who are the members of the Board
of Directors and "Principal Stockholders" shall mean Golder, Thoma, Xxxxxxx,
Xxxxxx Fund V, L.P., Xxxx Xxxxx, Xxxxxxx Xxxxxxxxx or any Affiliates of any such
Person.
"Closing Date" means the date hereof.
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"Code" means the Internal Revenue Code of 1986, as amended, and any
----
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"Collateral" means a collective reference to the collateral which is
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identified in, and at any time will be covered by, the Collateral Documents.
"Collateral Documents" means a collective reference to the Security
--------------------
Agreement, the Pledge Agreement, the Agency and Custodian Agreement and such
other documents executed and delivered in connection with the attachment and
perfection of the Agent's security interests and liens arising thereunder,
including without limitation, UCC financing statements and intellectual property
filings.
"Commitment" means the Revolving Commitment, the Term Loan Commitment, the
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LOC Commitment and the Swingline Commitment.
"Consolidated Capital Expenditures" means, for any period, all capital
---------------------------------
expenditures of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP.
"Consolidated EBITDA" means, for any period, the sum of (i) Consolidated
-------------------
Net Income for such period, but excluding therefrom all extraordinary or non-
recurring items of income or loss, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes and (C) depreciation and amortization
expense, all as determined in accordance with GAAP.
"Consolidated Funded Indebtedness" means, as of the date of determination,
--------------------------------
all Funded Indebtedness of the Consolidated Parties.
"Consolidated Interest Expense" means, for any period, interest expense
-----------------------------
(including the amortization of debt discount and premium, the interest component
under Capital Leases and the implied interest component under Synthetic Leases)
of the Consolidated Parties on a consolidated basis for such period, as
determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income (excluding
-----------------------
extraordinary items) after taxes for such period of the Consolidated Parties on
a consolidated basis, as determined in accordance with GAAP.
7
"Consolidated Net Worth" means, as of any date, shareholders' equity or net
----------------------
worth of the Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP.
"Consolidated Parties" means a collective reference to the Borrower and its
--------------------
Subsidiaries, and "Consolidated Party" means any one of them.
------------------
"Consolidated Senior Indebtedness" means, as of the date of determination,
---------------------------------
Consolidated Funded Indebtedness less Subordinated Debt.
----
"Contractual Obligations" means, with respect to any Person, any term or
-----------------------
provision of any securities issued by such Person, or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement to
which such Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Credit Documents" means a collective reference to this Credit Agreement,
----------------
the Notes, the LOC Documents, each Joinder Agreement, the Agent's Fee Letters,
the Collateral Documents and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto (in each case
as the same may be amended, modified, restated, supplemented, extended, renewed
or replaced from time to time), and "Credit Document" means any one of them.
---------------
"Credit Parties" means a collective reference to the Borrower and the
--------------
Guarantors, and "Credit Party" means any one of them.
------------
"Credit Party Obligations" means, without duplication, (i) all of the
------------------------
obligations of the Credit Parties to the Lenders (including the Issuing Lender
and the Swingline Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other Credit
Documents (including, but not limited to, any interest accruing after the
occurrence of a Bankruptcy Event with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and obligations, whenever arising, owing from any Credit Party
to any Lender, or any Affiliate of a Lender, arising under any Hedging
Agreement.
"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 term
of this Credit Agreement within one Business Day of when due, (b) other than as
set forth in (a) above, has failed to pay to the Agent or any Lender an amount
owed by such Lender pursuant to the terms of this Credit Agreement within one
Business Day of when due, unless such amount is subject to a good faith dispute
or (c) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any of assets
of which) a receiver, trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United States of
------- -
America.
8
"Domestic Subsidiary" means, with respect to any Person, any Subsidiary of
-------------------
such Person which is incorporated or organized under the laws of any State of
the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial part of another
---------------
business or other long-term assets, in each case, in, or used or useful in, the
same or a similar line of business as the Borrower and its Subsidiaries were
engaged in on the Closing Date, or any reasonable extensions or expansions
thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; and
-----------------
(iii) any other Person approved by the Agent (such approval not to be
unreasonably withheld or delayed) and, unless an Event of Default has occurred
and is continuing at the time any assignment is effected in accordance with
Section 11.3, the Borrower (such approval not to be unreasonably withheld or
delayed by the Borrower and such approval to be deemed given by the Borrower if
no objection is received by the assigning Lender and the Agent from the Borrower
within five Business Days after notice of such proposed assignment has been
provided by the assigning Lender to the Borrower); provided, however, that
-------- -------
neither the Borrower nor an Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable Federal,
------------------
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equipment Held for Resale" means all of each Credit Party's Inventory
-------------------------
consisting of equipment less than one year old which is held for resale or held
for lease by such Credit Party; provided, however, such equipment held for lease
-------- -------
by such Credit Party shall become "Rental Equipment" and no longer be "Equipment
Held for Resale" upon the leasing of such equipment by such Credit Party.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with any
---------------
Consolidated Party within the meaning of Section 4001(a)(14) of ERISA, or is a
member of a group which includes any Consolidated Party and which is treated as
a single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
-----------
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any Consolidated Party 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
9
termination of a Multiple Employer Plan; (iii) the distribution of a notice of
intent to terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to terminate
or the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v)
any event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated Party or any
ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for imposition
of a lien under Section 302(f) of ERISA exist with respect to any Plan; or
(viii) the adoption of an amendment to any Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate based upon
---------------
the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
---------------
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Agent to be equal to the quotient obtained by
dividing (a) the Interbank Offered Rate for such Eurodollar Loan for such
Interest Period by (b) 1 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate at
------------------------------
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurodollar liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Eurodollar Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined, or (ii) any
category of extensions of credit or other assets which include Eurodollar Loans.
The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning as defined in Section 9.1.
----------------
"Executive Officer" of any Person means any of the chief executive officer,
-----------------
chief operating officer, president, vice president, chief financial officer or
treasurer of such Person.
"Existing Credit Agreement" means that certain Credit Agreement dated as of
-------------------------
July 17, 1998, as amended from time to time thereafter, among the Borrower, the
guarantors party thereto, the lenders party thereto and First Union National
Bank, as agent for such Lenders.
"Fees" means all fees payable pursuant to Section 3.5.
----
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
--------
for such day shall be such rate
10
on such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Agent (in its individual capacity) on such day on
such transactions as determined by the Agent.
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary of
------------------
such Person which is not a Domestic Subsidiary of such Person.
"Funded Indebtedness" means, with respect to any Person, without
-------------------
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (f), (g), (i), (l) and (m) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Indebtedness of another
Person of the type referred to in clause (a) above secured by (or for which the
holder of such Funded 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, (c) all Guaranty Obligations of
such Person with respect to Indebtedness of the type referred to in clause (a)
above of another Person and (d) Indebtedness of the type referred to in clause
(a) above of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer and is legally obligated or has
a reasonable expectation of being liable with respect thereto. For purposes
hereof, the Junior Subordinated Convertible Promissory Note in the principal
amount of $15,000,000 issued by the Borrower in favor of the sellers of
Xxxxxxxxxxx Crane Service, Inc. shall not constitute Funded Indebtedness.
"GAAP" means generally accepted accounting principles in the United States
----
applied on a consistent basis and subject to the terms of Section 1.3.
"Xxxxxx Xxxxx" means Golder, Thoma, Cressey, Rauner, Inc., and its
------------
successors and permitted assigns.
"Governmental Authority" means any Federal, state, local or foreign court
----------------------
or governmental agency, authority, instrumentality or regulatory body.
"Guarantors" means a collective reference to each of the Subsidiary
----------
Guarantors, together with their successors and permitted assigns, and
"Guarantor" means any one of them.
---------
"Guaranty Obligations" means, with respect to any Person, without
--------------------
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any Property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss
11
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection agreement or
------------------
foreign currency exchange agreement between Borrower and any Lender, or any
Affiliate of a Lender.
"Indebtedness" means, with respect to any Person, 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 (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the deferred
purchase price of Property or services purchased by such Person (other than
trade debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance sheet
of such Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (f) 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, (g) all Guaranty
Obligations of such Person, (h) the principal portion of all obligations of such
Person under Capital Leases, (i) all obligations of such Person under Hedging
Agreements or other interest rate protection agreements or other hedging
agreements, (j) the maximum amount of all standby letters of credit issued or
bankers' acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and required by the terms
thereof to be redeemed or for which mandatory sinking fund payments are due on
or prior to the Maturity Date and all preferred Capital Stock issued by a Person
which has a current pay coupon, (l) the principal portion of all obligations of
such Person under Synthetic Leases and (m) the Indebtedness of any partnership
or unincorporated joint venture in which such Person is a general partner or a
joint venturer.
"Interbank Offered Rate" means, for any Eurodollar Loan for any Interest
----------------------
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor 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 (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If for any reason such rate is not available, the term
"Interbank Offered Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate 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 (rounded upwards, if necessary, to the nearest
1/100 of 1%).
12
"Interest Coverage Ratio" means the ratio of Consolidated EBITDA (computed
-----------------------
for the four fiscal quarters then ending) to Consolidated Interest Expense
payable in cash (computed for the four fiscal quarters then ending.
"Interest Payment Date" means (a) as to Base Rate Loans (other than
---------------------
Swingline Loans), the last day of each quarter, the date of repayment of
principal of such Loan and the Maturity Date, (b) as to Eurodollar Loans, the
last day of each applicable Interest Period, the date of repayment of principal
of such Loan 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 and (c) as to any Swingline Loan, the last day of each
calendar month and the Maturity Date.
"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.
"Inventory" means all of each Credit Party's inventory, including without
---------
limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Credit Parties'
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale or lease or leased or furnished or to be furnished under contracts of
service; and (iii) all goods returned to or repossessed by the Credit Parties.
"Investment" means (a) the acquisition (whether for cash, property,
----------
services, assumption of Indebtedness, securities or otherwise) of assets,
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
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person.
"Issuing Lender" means First Union National Bank.
--------------
"Issuing Lender Fees" shall have the meaning assigned to such term in
-------------------
Section 3.5(b)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in the form of
-----------------
Exhibit 7.12 hereto, executed and delivered by an Additional Credit Party in
------------
accordance with the provisions of Section 7.12.
13
"Lender" means any of the Persons identified as a "Lender" on the signature
------
pages hereto, and any Person which may become a Lender by way of assignment in
accordance with the terms hereof or pursuant to Section 3.4(b) hereof, together
with their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the Issuing Lender
----------------
for the account of the Borrower in accordance with the terms of Section 2.2 and
the letters of credit issued and outstanding on the date hereof and listed on
Schedule 8.1.
------------
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans and/or the Term Loan (or a
---- -----
portion of any Revolving Loan or Term Loan) bearing interest at the Adjusted
Base Rate or the Adjusted Eurodollar Rate and/or any Swingline Loans,
individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
--------------
Letters of Credit, and to honor payment obligations under, Letters of Credit
hereunder in an aggregate stated amount at any time outstanding (together with
the amounts of any unreimbursed drawings thereon) of up to the LOC Committed
Amount and with respect to each Lender, the commitment of each Lender to
purchase participation interests in the Letters of Credit.
"LOC Committed Amount" shall have the meaning assigned to such term in
--------------------
Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit, such Letter of
-------------
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (i) the rights and obligations of the parties
concerned or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
---------------
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
----
amount of all drawings under Letters of Credit honored by the Issuing Lender but
not theretofore reimbursed by the Borrower.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
condition (financial or otherwise), operations, business, assets, liabilities or
prospects of the Consolidated Parties, taken as a whole, (ii) the ability of any
Credit Party to perform any obligation under the Credit Documents to which it is
a party, (iii) the material rights and remedies of the Lenders under the Credit
Documents or (iv) the Collateral taken as a whole, in each case determined by
the Agent in its reasonable discretion.
14
"Material Contract" means any contract or other arrangement (other than any
-----------------
leases of real property or the Credit Documents), whether written or oral, to
which any Consolidated Party is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a Material Adverse Effect.
"Materials of Environmental Concern" means any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means July 17, 2003.
-------------
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
-------
assignee of the business of such company in the business of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
------------------
in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated Party or any
----------------------
ERISA Affiliate and at least one employer other than the Consolidated Parties or
any ERISA Affiliate are contributing sponsors.
"Net Accounts Receivable" means the aggregate Accounts Receivable of the
-----------------------
Credit Parties as determined in accordance with GAAP less any of such
receivables which remain unpaid more than 90 days from the original invoice
date.
"Net Cash Proceeds" means the aggregate cash proceeds received by the
-----------------
Consolidated Parties in respect of any Asset Disposition, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions), (b) taxes paid or payable as a result thereof and
(c) reasonable reserves established for indemnification obligations in
connection with such Asset Disposition; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by the Consolidated
Parties in any Asset Disposition.
"New Commitment Agreement" has the meaning assigned to such term in Section
------------------------
3.4(b).
"Note" or "Notes" means the Revolving Notes, the Swingline Note and/or the
---- -----
Term Notes, individually or collectively, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in substantially
-------------------
the form of Exhibit 2.1(b)(i), as required by Section 2.1(b)(i).
-----------------
"Notice of Extension/Conversion" means the written notice of extension or
------------------------------
conversion in substantially the form of Exhibit 3.2, as required by Section 3.2.
-----------
15
"Operating Lease" means, as applied to any Person, any lease (including,
---------------
without limitation, leases which may be terminated by the lessee at any time) of
any Property (whether real, personal or mixed) which is not a Capital Lease
other than any such lease in which that Person is the lessor.
"Other Taxes" has the meaning assigned to such term in Section 3.11.
-----------
"Participation Interest" means a purchase by a Lender of a participation in
----------------------
Letters of Credit or LOC Obligations as provided in Section 2.2, in Swingline
Loans as provided in Section 2.3 or in any Loans as provided in Section 3.14.
"Parts and Supplies Inventory" means all of each Credit Party's Inventory
----------------------------
consisting of parts and supplies.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means an Acquisition by any Credit Party which
---------------------
Acquisition complies with the following requirements (in each case to the
reasonable satisfaction of the Agent) (i) the Acquired Company shall be an
operating company that engages in a line of business substantially similar to
the line of business of the Consolidated Parties engaged in on the Closing Date
(or a holding company which owns such an operating company), (ii) the Purchase
Price for such Acquisition shall not exceed $70 million, and immediately
following any such acquisition, total availability under the Borrowing Base for
the making of Revolving Loans shall not be less than $20 million, (iii) the
Borrower shall have completed its due diligence process with respect to such
Acquisition, (iv) such Acquisition shall not be hostile, (v) no Default or Event
of Default shall exist immediately prior to or immediately after the
consummation of such Acquisition, (vi) the Agent shall have received all items
required by Sections 7.12, 7.14 and 7.15 in connection with the Acquired
Company if required to be delivered prior to the consummation of the Permitted
Acquisition, (vii) the Total Debt Leverage Ratio after giving pro forma effect
to such Acquisition must be 0.25 less than the maximum allowable Total Debt
Leverage Ratio as of the fiscal quarter ending immediately preceding the date of
such Acquisition and (viii) the Borrower shall have delivered to the Agent: (A)
with respect to Permitted Acquisitions with a purchase price in excess of
$2,500,000, a review of the financial condition of the Acquired Company
conducted by a firm of independent certified public accountants of nationally
recognized standing reasonably acceptable to the Agent, (B) the "Board Paper"
for the Acquired Company (i.e., a short memo prepared by the Borrower with
respect to the Acquired Company), (C) a description of such Acquisition in
reasonable detail and the corresponding documentation and historical financial
information of the Acquired Company, (D) financial projections demonstrating
that after giving effect to such Acquisition, the Consolidated Parties shall be
in compliance with all of the covenants set forth in Section 7.11 for the period
commencing with the date of such Acquisition through the last day covered by the
financial projections delivered to the Agent on the Closing Date pursuant to
Section 5.1(c)(iv), (E) a Pro Forma Compliance Certificate with respect to such
Acquisition demonstrating that, upon giving effect to such Acquisition, the
Consolidated Parties shall be in compliance on a Pro Forma Basis with all of the
covenants contained herein including, without limitation, the covenants set
forth in Section 7.11 hereof and (F) environmental assessment reports and
related documents of a recent date with respect to all real property owned or
leased by the Acquired Company. All information, documents and financial data
required in connection with any
16
Permitted Acquisition shall be furnished to the Agent at least 7 Business Days
prior to the closing of such proposed Acquisition.
"Permitted Investments" means Investments which are either (i) cash and
---------------------
Cash Equivalents; (ii) accounts receivable created, acquired or made by any
Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (iii) Investments
consisting of Capital Stock, obligations, securities or other property received
by any Consolidated Party in settlement of accounts receivable (created in the
ordinary course of business) from bankrupt obligors; (iv) Investments existing
as of the Closing Date and set forth in Schedule 1.1(a), (v) Guaranty
---------------
Obligations permitted by Section 8.1; (vi) advances or loans to directors or
officers that do not exceed $500,000 in the aggregate at any one time
outstanding for all of the Consolidated Parties for the purchase of Capital
Stock of the Borrower; (vii) Investments in any Credit Party, (viii) advances to
officers, directors and employees for travel, entertainment or other business-
related expenses incurred or anticipated to be incurred in the ordinary course
of business, (ix) promissory notes and other instruments received by a Credit
Party as consideration in connection with asset sales permitted hereunder and
(x) Permitted Acquisitions.
"Permitted Liens" means:
---------------
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title arising
in the ordinary course of business, provided that such Liens secure only
--------
amounts not yet due and payable or, if due and payable, are unfiled and no
other action has been taken to enforce the same or are being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall, within
--------
30 days after the entry thereof, have
17
been discharged or execution thereof stayed pending appeal, or shall have
been discharged within 30 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered Property for its intended purposes;
(vii) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such Person
to the extent permitted under Section 8.1(c), provided that any such Lien
--------
attaches to such Property concurrently with or within 90 days after the
acquisition thereof;
(viii) leases or subleases granted to others not interfering in any
material respect with the business of any Consolidated Party;
(ix) liens evidenced by precautionary filings of lessors under
operating leases;
(x) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions; and
(xi) Liens existing as of the Closing Date and set forth on
Schedule 1.1(b); provided that (a) no such Lien shall at any time be
-------- ------ --------
extended to or cover any Property other than the Property subject thereto
on the Closing Date and (b) the principal amount of the Indebtedness
secured by such Liens shall not be extended, renewed, refunded or
refinanced.
"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 Consolidated
Party or any ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within the
meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the amended and restated pledge agreement dated as
----------------
of the Closing Date executed in favor of the Agent by each of the Credit
Parties, as amended, modified, restated or supplemented from time to time.
"Price Reduction Election" has the meaning assigned to such term in the
------------------------
definition of "Applicable Percentage".
"Prime Rate" means the per annum rate of interest established from time to
----------
time by First Union National Bank as its prime rate, which rate may not be the
lowest rate of interest charged by First Union National Bank to its customers.
18
"Pro Forma Basis" shall mean, with respect to any Permitted Acquisition or
---------------
other transaction permitted hereunder, that such Permitted Acquisition or other
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end preceding
the date of such Permitted Acquisition or other transaction. In connection with
any calculation of the financial covenants set forth in Section 7.11, upon
giving effect to a Permitted Acquisition or other transaction on a Pro Forma
Basis, any Indebtedness of the Acquired Company which is retired in connection
with such transaction, any Indebtedness incurred by a Credit Party to finance
such Permitted Acquisition or other transaction and any other financial
statement components shall be adjusted in a manner mutually satisfactory to the
Agent and the Borrower. For purposes of any such calculation, the principles
set forth in the second paragraph of Section 1.3 shall be applicable.
"Pro Forma Compliance Certificate" means a certificate of an Executive
--------------------------------
Officer of the Borrower delivered to the Agent in connection with a Permitted
Acquisition and containing reasonably detailed calculations, upon giving effect
to the applicable transaction on a Pro Forma Basis, of the financial covenants
set forth in Section 7.11 as of the most recent fiscal quarter end preceding the
date of such Permitted Acquisition.
"Property" means any interest in any kind of property or asset, whether
--------
real, personal or mixed, or tangible or intangible.
"Purchase Price" means all cash paid, notes issued and/or Indebtedness
--------------
assumed by a Credit Party as the consideration paid by such Credit Party in
connection with a Permitted Acquisition.
"Purchasers" shall mean The 1818 Fund III, L.P., Co-Investment Partners,
----------
L.P., Erie Indemnity Company, Erie Insurance Exchange and Aquila Limited
Partnership
"Register" has the meaning given such term in Section 11.3(c).
--------
"Regulation T, U, or X" means Regulation T, U or X, respectively, of the
---------------------
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
-------
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles) of any Materials of Environmental Concern.
"Rental Equipment" means all of each Credit Party's Inventory consisting of
----------------
equipment which is rented by such Credit Party in the ordinary course of
business or is held for lease by such Credit Party.
"Reportable Event" means any of the events set forth in Section 4043(c) of
----------------
ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Lenders" means, at any time, Lenders which are then in compliance
----------------
with their obligations hereunder (as determined by the Agent) and holding in the
aggregate at least 51% of (i) the
19
Revolving Commitments (and Participation Interests therein) and the outstanding
Term Loan Commitments or (ii) if the Commitments have been terminated, the
outstanding Loans and Participation Interests (including the Participation
Interests of the Issuing Lender in any Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its material property is subject.
"Restricted Payment" means (i) any dividend or other payment or
------------------
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding (including
without limitation any payment in connection with any merger or consolidation
involving any Consolidated Party), or to the direct or indirect holders of any
shares of any class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, in their capacity as such (other than dividends or distributions
payable in the same class of Capital Stock of the applicable Person or to any
Credit Party (directly or indirectly through Subsidiaries)), (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any Consolidated Party, now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding and (iv) any payment to any
Affiliate of any Credit Party except to the extent expressly permitted in this
Credit Agreement.
"Revolving Commitment" means, with respect to each Lender, the commitment
--------------------
of such Lender in an aggregate principal amount at any time outstanding of up to
such Lender's Revolving Commitment Percentage of the Revolving Committed Amount,
(i) to make Revolving Loans in accordance with the provisions of Section 2.1(a),
(ii) to purchase Participation Interests in Letters of Credit in accordance with
the provisions of Section 2.2(c) and (iii) to purchase Participation Interests
in Swingline Loans in accordance with the provisions of Section 2.3(b).
"Revolving Commitment Percentage" means, for any Lender, the percentage
-------------------------------
identified as its Revolving Commitment Percentage on Schedule 2.1(a), as such
---------------
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 11.3.
"Revolving Committed Amount" has the meaning given to such term in Section
--------------------------
2.1(a).
"Revolving Loans" has the meaning given to such term in Section 2.1(a).
---------------
"Revolving Note" or "Revolving Notes" means the promissory notes of the
-------------- ---------------
Borrower in favor of each of the Lenders evidencing the Revolving Loans provided
pursuant to Section 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"Revolving Obligations" means, collectively, the Revolving Loans, the
---------------------
Swingline Loans and the LOC Obligations.
20
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
---
Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
------------------------------
with any Person or to which any such Person is a party, providing for the
leasing to any Consolidated Party of any Property, whether owned by such
Consolidated Party as of the Closing Date or later acquired, which has been or
is to be sold or transferred by such Consolidated Party to such Person or to any
other Person from whom funds have been, or are to be, advanced by such Person on
the security of such Property.
"Security Agreement" means the amended and restated security agreement
------------------
dated as of the Closing Date executed in favor of the Agent by each of the
Credit Parties, as amended, modified, restated or supplemented from time to
time.
"Senior Debt Leverage Ratio" means, as of the last day of each fiscal
--------------------------
quarter, the ratio of Consolidated Senior Indebtedness (computed as of the last
day of each such fiscal quarter) to Consolidated EBITDA (computed for the four
fiscal quarters then ending).
"Senior Subordinated Notes" means the aggregate $275,000,000 Senior
-------------------------
Subordinated Notes of the Borrower issued pursuant to the Indenture dated
November 25, 1997 and the Indenture dated December 11, 1998, as supplemented.
"Single Employer Plan" means any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
------- --------
particular date, that on such date (i) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature in their ordinary course, (iii) such Person is not engaged in a business
or a transaction, and is not about to engage in a business or a transaction, for
which such Person's Property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged or is to engage, (iv) the fair value of the Property of
such Person taken on a going concern basis is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person and (v) the present fair salable value of the assets of such Person taken
on a going concern basis is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured. In computing the amount of contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount which, in light
of all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit Fee" has the meaning assigned to such term in
----------------------------
Section 3.5(b)(i).
"Stock Purchase Agreement" means the Stock Purchase Agreement dated as of
------------------------
April 27, 1999 between the Borrower and the Purchasers.
21
"Subordinated Debt" means (a) the Senior Subordinated Notes, (b) any other
-----------------
publicly-issued unsecured Indebtedness incurred by the Borrower, which is
expressly subordinated and made junior to the payment and performance in full of
the Credit Party Obligations and contains terms and conditions reasonably
satisfactory to the Required Lenders, (c) privately issued unsecured
Indebtedness which is expressly subordinated and made junior to the payment and
performance in full of the Credit Party Obligations and contains terms and
conditions satisfactory to the Required Lenders, provided that the aggregate
--------
principal amount of the Indebtedness referred to in this clause (c) at any time
outstanding shall not exceed $55,000,000; provided further that in the case of
--------
Indebtedness referred to in this clause (c) the Lenders acknowledge that
subordination and other terms and conditions substantially identical, in the
sole judgment of the Agent, to those contained in the form of Subordinated Note
attached hereto as Exhibit 1 are satisfactory. Notwithstanding the foregoing,
---------
the Junior Subordinated Convertible Promissory Note in the principal amount of
$15,000,000 issued by the Borrower in favor of the sellers of Xxxxxxxxxxx Xxxxx
Service, Inc. shall be classified as Subordinated Debt permitted pursuant to
Section 8.1(e).
"Subordinated Payments" means any fees, expenses or other payments incurred
---------------------
or owing by any Credit Party, which, in each case, are specifically subordinated
in right of payment to the prior payment of the Credit Party Obligations on
terms and conditions satisfactory to the Required Lenders.
"Subsidiary" means, as to any Person at any time, (a) any corporation more
----------
than 50% of whose Capital 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 such 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 such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than 50% of the Capital Stock.
"Subsidiary Guarantor" means each of the Persons identified as a
--------------------
"Subsidiary Guarantor" on the signature pages hereto and each Subsidiary of a
Credit Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns, and "Subsidiary Guarantor" means any one
--------------------
of them.
"Swingline Commitment" means the commitment of the Swingline Lender to make
--------------------
Swingline Loans in an aggregate principal amount at any time outstanding of up
to the Swingline Committed Amount.
"Swingline Committed Amount" has the meaning assigned to such term in
--------------------------
Section 2.3(a).
"Swingline Lender" means First Union National Bank.
----------------
"Swingline Loan" has the meaning assigned to such term in Section 2.3(a).
--------------
22
"Swingline Note" means the promissory note of the Borrower in favor of the
--------------
Swingline Lender in the original principal amount of $5,000,000, as such
promissory note may be amended, modified, restated or replaced from time to
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.
"Taxes" has the meaning assigned to such term in Section 3.11.
-----
"Term Loan" has the meaning assigned to such term in Section 2.4(a).
---------
"Term Loan Commitment" means, with respect to each Lender, the commitment
--------------------
of such Lender to make its portion of the Term Loan in a principal amount equal
to such Lender's Term Loan Commitment Percentage of the Term Loan Committed
Amount.
"Term Loan Commitment Percentage" means, for any Lender, the percentage
-------------------------------
identified as its Term Loan Commitment Percentage on Schedule 2.1(a), as such
---------------
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 11.3.
"Term Loan Committed Amount" has the meaning assigned to such term in
--------------------------
Section 2.4(a).
"Term Note" or "Term Notes" means the promissory notes of the Borrower in
--------- ----------
favor of each of the Lenders evidencing the Term Loan provided pursuant to
Section 2.4(f), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"Total Debt Leverage Ratio" means, as of the last day of each fiscal
-------------------------
quarter of the Borrower, the ratio of Consolidated Funded Indebtedness to
Consolidated EBITDA (computed for the four fiscal quarters then ending).
"Trade Letter of Credit Fee" has the meaning assigned to such term in
--------------------------
Section 3.5(b)(ii).
"Unused Line Fee" has the meaning assigned to such term in Section 3.5(a).
---------------
"Unused Line Fee Calculation Period" has the meaning assigned to such term
----------------------------------
in Section 3.5(a).
"Unused Revolving Committed Amount" means, for any period, the amount by
---------------------------------
which (a) the then applicable Revolving Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal amount of
all Revolving Loans plus (ii) the outstanding aggregate principal amount of all
----
LOC Obligations.
"Voting Stock" means, with respect to any Person, Capital Stock issued by
------------
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of
23
directors (or persons performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of whose
-----------------------
Voting Stock is at the time owned by such Person directly or indirectly through
other Wholly Owned Subsidiaries.
1.2 Computation of Time Periods.
---------------------------
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
----------------
Unless otherwise defined or specified herein, all accounting terms shall be
construed herein and all accounting determinations for purposes of determining
compliance with Section 7.11 hereof and otherwise to be made under this Credit
Agreement shall be made in accordance with GAAP applied on a basis consistent in
all material respects with the financial statements delivered pursuant to
Section 5.1(c) (the "Financials"). All financial statements required to be
----------
delivered hereunder from and after the Closing Date and all financial records
shall be maintained in accordance with GAAP as in effect as of the date of the
Financials. If GAAP shall change from the basis used in preparing the
Financials, the certificates required to be delivered pursuant to Section 7.1
demonstrating compliance with the covenants contained herein shall include
calculations setting forth the adjustments necessary to demonstrate how the
Consolidated Parties are in compliance with the financial covenants based upon
GAAP as in effect on the Closing Date. If the Credit Parties shall change their
method of inventory accounting, all calculations necessary to determine
compliance with the covenants contained herein shall be made as if such method
of inventory accounting had not been so changed.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 7.11
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.1), any Indebtedness of
an Acquired Company which is retired in connection with a Permitted Acquisition
shall be excluded from such calculations and deemed to have been retired as of
the first day of such applicable period and income statement items and other
balance sheet items (whether positive or negative) attributable to the Acquired
Company acquired in such transaction shall be included in such calculations to
the extent relating to such applicable period, subject to adjustments mutually
acceptable to the Agent and the Borrower.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
---------------
24
(a) Revolving Commitment. Subject to the terms and conditions hereof
--------------------
and in reliance upon the representations and warranties set forth herein,
each Lender severally agrees to make available to the Borrower such
Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Revolving Loans") from time to time
---------------
from the Closing Date until the Maturity Date, or such earlier date as the
Revolving Commitments shall have been terminated as provided herein;
provided, however, that (i) with regard to the Lenders collectively, the
-------- -------
amount of Revolving Obligations outstanding shall not exceed the lesser of
(A) SIX HUNDRED MILLION DOLLARS ($600,000,000) (as such aggregate maximum
amount may be increased or reduced from time to time as provided in Section
3.4, the "Revolving Committed Amount") and (B) the Borrowing Base less the
-------------------------- ----
outstanding Term Loan; provided, further, (ii) with regard to each Lender
-------- -------
individually, the amount of such Lender's Revolving Commitment Percentage
of the sum of the Revolving Loans plus LOC Obligations plus Swingline Loans
---- ----
outstanding shall not exceed such Lender's Revolving Committed Amount.
Revolving Loans may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request; provided, however, that
-------- -------
no more than ten (10) Eurodollar Loans shall be outstanding hereunder at
any time, of which no more than seven (7) of such Eurodollar Loans shall be
Revolving Loans (it being understood that, for purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate
Eurodollar Loans, even if they begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions hereof,
be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period). Revolving Loans hereunder
may be repaid and reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
-------------------------
(i) Notice of Borrowing. The Borrower shall request a Revolving Loan
-------------------
borrowing by written notice (or telephonic notice promptly confirmed
in writing) to the Agent not later than 12:00 P.M. (Charlotte, North
Carolina time) on the Business Day of the requested borrowing in the
case of Base Rate Loans, and on the third Business Day prior to the
date of the requested borrowing in the case of Eurodollar Loans. Each
such request for borrowing shall be irrevocable and shall specify (A)
that a Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate principal
amount to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Eurodollar Loans or a combination
thereof, and if Eurodollar Loans are requested, the Interest Period(s)
therefor. If the Borrower shall fail to specify in any such Notice of
Borrowing (I) an applicable Interest Period in the case of a
Eurodollar Loan, then such notice shall be deemed to be a request for
an Interest Period of one month, or (II) the type of Revolving Loan
requested, then such notice shall be deemed to be a request for a Base
Rate Loan hereunder. The Agent shall give notice to each affected
Lender promptly upon receipt of each Notice of Borrowing pursuant to
this Section 2.1(b)(i), the contents thereof and each such Lender's
share of any borrowing to be made pursuant thereto.
25
(ii) Minimum Amounts. Each Revolving Loan that is a Base Rate Loan
---------------
shall be in a minimum aggregate principal amount of $1,000,000 and
integral multiples of $1,000,000 in excess thereof (or the remaining
amount of the Revolving Committed Amount, if less). Each Revolving
Loan that is a Eurodollar Loan shall be in a minimum aggregate
principal amount of $5,000,000 and integral multiples of $1,000,000 in
excess thereof.
(iii) Advances. Each Lender will make its Revolving Commitment
--------
Percentage of each Revolving Loan borrowing available to the Agent for
the account of the Borrower as specified in Section 3.15(a), or in
such other manner as the Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Agent. Such borrowing will then be made available to
the Borrower by the Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by
the Agent.
(c) Repayment. The principal amount of all Revolving Loans shall
---------
be due and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
--------
(i) Base Rate Loans. During such periods as Revolving Loans shall
---------------
be comprised in whole or in part of Base Rate Loans, such Base Rate
Loans shall bear interest at a per annum rate equal to the 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.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans 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 Commitment Percentage of the Revolving Committed Amount and in
substantially the form of Exhibit 2.1(e).
------
2.2 Letter of Credit Subfacility.
----------------------------
(a) Issuance. Subject to the terms and conditions hereof and of
--------
the LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender agrees
to issue, and each Lender severally agrees to participate in the issuance
by the Issuing Lender of Letters of Credit in Dollars from time to time
from the Closing Date until the Maturity Date as
26
the Borrower may request, in a form acceptable to the Issuing Lender;
provided, however, that (i) the LOC Obligations outstanding shall not at
-------- -------
any time exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000) (the "LOC
---
Committed Amount"), (ii) with regard to the Lenders collectively, the
----------------
amount of the Revolving Obligations shall not exceed the lesser of (A) the
Revolving Committed Amount and (B) the Borrowing Base less the outstanding
----
Term Loan and (iii) with regard to each Lender individually, the amount
of such Lender's Revolving Commitment Percentage of the sum of Revolving
Loans plus LOC Obligations plus Swingline Loans outstanding shall not
---- ----
exceed such Lender's Revolving Commitment Percentage of the Revolving
Committed Amount. No Letter of Credit shall (x) have an original expiry
date more than one year from the date of issuance or (y) as originally
issued or as extended, have an expiry date extending beyond the Maturity
Date. Each Letter of Credit shall comply with the related LOC Documents.
The issuance and expiry dates of each Letter of Credit shall be a Business
Day.
(b) Notice and Reports. The request for the issuance of a Letter of
------------------
Credit shall be submitted by the Borrower to the Issuing Lender at least
three (3) Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon request,
disseminate to each of the Lenders a detailed report specifying the Letters
of Credit which are then issued and outstanding and any activity with
respect thereto which may have occurred since the date of the prior report,
and including therein, among other things, the beneficiary, the face amount
and the expiry date, as well as any payment or expirations which may have
occurred.
(c) Participation. Each Lender, upon issuance of a Letter of Credit,
-------------
shall be deemed to have purchased without recourse a Participation Interest
from the Issuing Lender in such Letter of Credit and the obligations
arising thereunder and any collateral relating thereto, in each case in an
amount equal to its pro rata share of the obligations under such Letter of
Credit (based on the respective Revolving Commitment Percentages of the
Lenders) and shall absolutely, unconditionally and irrevocably assume and
be obligated to pay to the Issuing Lender and discharge when due, its pro
rata share of the obligations arising in connection with such Letter of
Credit. Without limiting the scope and nature of each Lender's
Participation Interest in any Letter of Credit, to the extent that the
Issuing Lender has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Lender its
pro rata share of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant to
the provisions of subsection (d) below. The obligation of each Lender to
so reimburse the Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Default, an Event of Default
or any other occurrence or event. Any such reimbursement shall not relieve
or otherwise impair the obligation of the Borrower to reimburse the Issuing
Lender under any Letter of Credit, together with interest as hereinafter
provided.
(d) Reimbursement. In the event of any drawing under any Letter of
-------------
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower
intends to otherwise reimburse the Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection (e)
below on the related Letter of
27
Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. The Borrower promises to reimburse the Issuing
Lender on the day of drawing under any Letter of Credit (either with the
proceeds of a Revolving Loan obtained hereunder or otherwise) in same day
funds. If the Borrower shall fail to reimburse the Issuing Lender as
provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Adjusted Base Rate plus 2%. The
----
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against
the Issuing Lender, the Agent, the Lenders, the beneficiary of the Letter
of Credit drawn upon or any other Person, including without limitation any
defense based on any failure of the Borrower or any other Credit Party to
receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the other Lenders of the amount of any unreimbursed drawing and each
Lender shall promptly pay to the Agent for the account of the Issuing
Lender in Dollars and in immediately available funds, the amount of such
Lender's pro rata share of such unreimbursed drawing. Such payment shall be
made on the day such notice is received by such Lender from the Issuing
Lender if such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding the
day such notice is received. If such Lender does not pay such amount to the
Issuing Lender in full upon such request, such Lender shall, on demand, pay
to the Agent for the account of the Issuing Lender interest on the unpaid
amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal
to, if paid within two (2) Business Days of the date that such Lender is
required to make payments of such amount pursuant to the preceding
sentence, the Federal Funds Rate and thereafter at a rate equal to the Base
Rate. Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be absolute
and unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or
the acceleration of the obligations of the Borrower hereunder and shall be
made without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Lender to the
Issuing Lender, such Lender shall, automatically and without any further
action on the part of the Issuing Lender or such Lender, acquire a
Participation Interest in an amount equal to such payment (excluding the
portion of such payment constituting interest owing to the Issuing Lender)
in the related unreimbursed drawing portion of the LOC Obligation and in
the interest thereon and in the related LOC Documents, and shall have a
claim against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower
------------------------------
shall have requested, or been deemed to have requested, a Revolving Loan
advance to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing
under a Letter of Credit, in which case a Revolving Loan advance comprised
of Base Rate Loans (or Eurodollar Loans to the extent the Borrower has
complied with the procedures of Section 2.1(b)(i) with respect thereto)
shall be immediately made to the Borrower by all Lenders (notwithstanding
any termination of the Commitments pursuant to Section 9.2) pro rata based
--- ----
on
28
the respective Revolving Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to
Section 9.2) and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each such Lender
hereby irrevocably agrees to make its pro rata share of each such Revolving
Loan immediately upon any such request or deemed request in the amount, in
the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of such borrowing may not comply with the
---------------
minimum amount for advances of Revolving Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be
made by the time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Revolving Loans are otherwise permitted to be
made hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event
that any Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower or any other Credit Party), then each such Lender hereby agrees
that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Issuing
Lender such Participation Interests in the outstanding LOC Obligations as
shall be necessary to cause each such Lender to share in such LOC
Obligations ratably (based upon the respective Revolving Commitment
Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2)), provided that at
--------
the time any purchase of Participation Interests pursuant to this sentence
is actually made, the purchasing Lender shall be required to pay to the
Issuing Lender, to the extent not paid to the Issuer by the Borrower in
accordance with the terms of subsection (d) above, interest on the
principal amount of Participation Interests purchased for each day from and
including the day upon which such borrowing would otherwise have occurred
to but excluding the date of payment for such Participation Interests, at
the rate equal to, if paid within two (2) Business Days of the date of the
Revolving Loan advance, the Federal Funds Rate, and thereafter at a rate
equal to the Base Rate. In the event that the Borrower pays any such
interest on its reimbursement obligations to the Issuing Lender following
the payment by a Lender of interest on the principal amount of the
Participation Interest purchased by such Lender in accordance with the
foregoing, then the Issuing Lender shall rebate to such Lender its pro rata
share of the interest so paid by the Borrower.
(f) Designation of Credit Parties as Account Parties. Notwithstanding
------------------------------------------------
anything to the contrary set forth in this Credit Agreement, including
without limitation Section 2.2(a), a Letter of Credit issued hereunder may
contain a statement to the effect that such Letter of Credit is issued for
the account of a Credit Party other than the Borrower, provided that
notwithstanding such statement, the Borrower shall be the actual account
party for all purposes of this Credit Agreement for such Letter of Credit
and such statement shall not affect the Borrower's reimbursement
obligations hereunder with respect to such Letter of Credit.
29
(g) Renewal, Extension. The renewal or extension of any Letter of
------------------
Credit shall, for purposes hereof, be treated in all respects the same as
the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender shall have the
-----------------------------
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may be
---
incorporated therein and deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to pay, and protect, indemnify and
save each Lender harmless from and against, any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that such Lender may incur or
be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of such Lender to
honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority (all such acts
or omissions, herein called "Government Acts").
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (C) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or
not they be in cipher; (D) for any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under
a Letter of Credit or of the proceeds thereof; and (E) for any
consequences arising from causes beyond the control of such Lender,
including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by any Lender (including the Issuing Lender), under or in connection
with any Letter of Credit or the related certificates, if taken or
omitted in good faith, shall not put such Lender under any resulting
liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be construed
and applied to protect and
30
indemnify each Lender (including the Issuing Lender) against any and
all risks involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of itself
and each of the other Credit Parties), including, without limitation,
any and all Government Acts. No Lender (including the Issuing Lender)
shall, in any way, be liable for any failure by such Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i)
shall survive the termination of this Credit Agreement. No act or
omission of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Lenders (including
the Issuing Lender) to enforce any right, power or benefit under this
Credit Agreement.
(j) Notwithstanding anything to the contrary contained in this
subsection (j), the Borrower shall have no obligation to indemnify any
Lender (including the Issuing Lender) in respect of any liability incurred
by such Lender (A) arising out of the gross negligence or willful
misconduct of such Lender, as determined by a court of competent
jurisdiction, or (B) caused by such Lender's failure to pay under any
Letter of Credit after presentation to it of a request strictly complying
with the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by any
law, regulation, court order or decree.
(k) Responsibility of Issuing Lender. It is expressly understood and
--------------------------------
agreed that the obligations of the Issuing Lender hereunder to the Lenders
are only those expressly set forth in this Credit Agreement and that the
Issuing Lender shall be entitled to assume that the conditions precedent
set forth in Section 5.2 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been satisfied;
provided, however, that nothing set forth in this Section 2.2 shall be
-------- -------
deemed to prejudice the right of any Lender to recover from the Issuing
Lender any amounts made available by such Lender to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of
the Issuing Lender.
(l) Conflict with LOC Documents. In the event of any conflict between
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
2.3 Swingline Loan Subfacility.
--------------------------
(a) Swingline Commitment. Subject to the terms and conditions hereof,
--------------------
the Swingline Lender, in its individual capacity, agrees to make certain
revolving credit loans to the Borrower (each a "Swingline Loan" and,
--------------
collectively, the "Swingline Loans") from time to time from the Closing
---------------
Date until the Maturity Date for the purposes hereinafter set forth;
31
provided, however, (i) the aggregate amount of Swingline Loans outstanding
-------- -------
at any time shall not exceed FIVE MILLION DOLLARS ($5,000,000.00) (the
"Swingline Committed Amount"), (ii) with regard to the Lenders
---------------------------
collectively, the amount of the Revolving Obligations shall not exceed the
lesser of (A) the Revolving Committed Amount and (B) the Borrowing Base
less the outstanding Term Loan and (iii) with regard to each Lender
----
individually, the amount of such Lender's Revolving Commitment Percentage
of the sum of the Revolving Loans plus LOC Obligations plus Swingline Loans
---- ----
outstanding shall not exceed such Lender's Revolving Commitment Percentage
of the Revolving Committed Amount. Swingline Loans hereunder shall be made
in accordance with the provisions of this Section 2.3, and may be repaid
and reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
-----------------------
(i) Notices; Disbursement. The Borrower shall request a
---------------------
Swingline Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 1:00 P.M.
(Charlotte, North Carolina time) on the Business Day of the requested
borrowing. Each such request for borrowing shall be irrevocable and
shall specify (A) that a Swingline Loan is requested, (B) the date of
the requested borrowing (which shall be a Business Day) and (C) the
aggregate principal amount to be borrowed. Each Swingline Loan shall
have such maturity date as the Swingline Lender and the Borrower shall
agree upon receipt by the Swingline Lender of any such notice from the
Borrower. The Swingline Lender shall initiate the transfer of funds
representing the Swingline Loan advance to the Borrower by 3:00 P.M.
(Charlotte, North Carolina time) on the Business Day of the requested
borrowing.
(ii) Minimum Amounts. Each Swingline Loan shall be in a
---------------
minimum principal amount of $500,000 and in integral multiples of
$100,000 in excess thereof.
(iii) Repayment of Swingline Loans. The principal amount of all
----------------------------
Swingline Loans shall be due and payable on the Maturity Date. The
Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the
Borrower shall be deemed to have requested a Revolving Loan advance
comprised solely of Base Rate Loans in the amount of such Swingline
Loans; provided, however, that any such demand shall be deemed to have
-------- -------
been given one Business Day prior to the Maturity Date and on the date
of the occurrence of any Event of Default described in Section 9.1 and
upon acceleration of the indebtedness hereunder and the exercise of
remedies in accordance with the provisions of Section 9.2. Each
Lender hereby irrevocably agrees to make its pro rata share of each
such Revolving Loan in the amount, in the manner and on the date
specified in the preceding sentence notwithstanding (I) the amount of
---------------
such borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (II) whether any
conditions specified in Section 5.2 are then satisfied, (III) whether
a Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Revolving Loan to be made by the time
32
otherwise required hereunder, (V) whether the date of such borrowing
is a date on which Revolving Loans are otherwise permitted to be made
hereunder or (VI) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the
event that any Revolving Loan cannot for any reason be made on the
date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code
with respect to the Borrower or any other Credit Party), then each
Lender hereby agrees that it shall forthwith purchase (as of the date
such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to
such purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each such
Lender to share in such Swingline Loans ratably based upon its
Revolving Commitment Percentage of the Revolving Committed Amount
(determined before giving effect to any termination of the Commitments
pursuant to Section 3.4), provided that (A) all interest payable on
--------
the Swingline Loans shall be for the account of the Swingline Lender
until the date as of which the respective participation is purchased
and (B) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Lender shall be required to
pay to the Swingline Lender, to the extent not paid to the Swingline
Lender by the Borrower in accordance with the terms of subsection (c)
below, interest on the principal amount of participation purchased for
each day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the rate equal to the Federal Funds Rate. In the
event that the Borrower pays any such interest owing on the Swingline
Loans, following the payment by a Lender of the interest on the
principal amount of the participation purchased by such Lender in
accordance with the foregoing, then the Swingline Lender shall rebate
to such Lender, its pro rata share of the interest so paid by the
Borrower.
(c) Interest on Swingline Loans. Subject to the provisions of Section
---------------------------
3.1, each Swingline Loan shall bear interest at a per annum rate equal to
the Adjusted Base Rate. Interest on Swingline Loans shall be payable in
arrears on each applicable Interest Payment Date (or at such other times as
may be specified herein).
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
--------------
executed promissory note of the Borrower to the Swingline Lender in
substantially the form of Exhibit 2.3(d).
--------------
2.4 Term Loan.
---------
(a) Term Commitment. Subject to the terms and conditions hereof and in
---------------
reliance upon the representations and warranties set forth herein each
Lender severally agrees to make available to the Borrower on the Closing
Date such Lender's Term Loan Commitment Percentage of a term loan in
Dollars (the "Term Loan") in the aggregate principal amount of ONE HUNDRED
---------
MILLION DOLLARS ($100,000,000) (the "Term Loan Committed
-------------------
33
Amount"). The Term Loan may consist of Base Rate Loans or Eurodollar
------
Loans, or a combination thereof, as the Borrower may request; provided,
--------
however, that no more than ten (10) Eurodollar Loans shall be outstanding
-------
hereunder at any time of which no more than three (3) of such Eurodollar
Loans shall be Term Loans (it being understood that, for purposes hereof,
Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period). Amounts
repaid on the Term Loan may not be reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an appropriate
--------------------
Notice of Borrowing to the Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Closing Date, with respect to the portion of
the Term Loan initially consisting of a Base Rate Loan, or on the third
Business Day prior to the Closing Date, with respect to the portion of the
Term Loan initially consisting of one or more Eurodollar Loans, which
Notice of Borrowing shall be irrevocable and shall specify (i) that the
funding of a Term Loan is requested and (ii) whether the funding of the
Term Loan shall be comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested, the Interest
Period(s) therefor. If the Borrower shall fail to deliver such Notice of
Borrowing to the Agent by 11:00 A.M. (Charlotte, North Carolina time) on
the third Business Day prior to the Closing Date, then the full amount of
the Term Loan shall be disbursed on the Closing Date as a Base Rate Loan.
Each Lender shall make its Term Loan Commitment Percentage of the Term Loan
available to the Agent for the account of the Borrower at the office of the
Agent specified in Schedule 2.1(a), or at such other office as the Agent
---------------
may designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on
the Closing Date in Dollars and in funds immediately available to the
Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
---------------
part of the Term Loan shall be in an aggregate principal amount that is not
less than $1,000,000 and integral multiples of $500,000 (or the then
remaining principal balance of the Term Loan, if less).
(d) Repayment of Term Loan. The principal amount of the Term Loan
----------------------
shall be due and payable in full on the Maturity Date, unless accelerated
sooner pursuant to Section 9.2.
(e) Interest. Subject to the provisions of Section 3.1, the Term Loan
--------
shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Term Loan 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 the Term Loan 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.
34
Interest on the Term Loan shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(f) Term Notes. The portion of the Term Loan made by each Lender
----------
shall be evidenced by a duly executed promissory note of the Borrower to
such Lender in an original principal amount equal to such Lender's Term
Loan Commitment Percentage of the Term Loan and substantially in the form
of Exhibit 2.4(f).
--------------
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
----------------------------------------------
3.1 Default Rate.
------------
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Adjusted Base Rate plus 2%).
----
3.2 Extension and Conversion.
------------------------
The Borrower shall have the option, on any Business Day, to extend existing
Loans into a subsequent permissible Interest Period or to convert Loans into
Loans of another interest rate type; provided, however, that (i) except as
-------- -------
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) without the consent of the Required
Lenders, Eurodollar Loans may be extended, and Base Rate Loans may be converted
into Eurodollar Loans, only if the conditions precedent set forth in Section 5.2
are satisfied on the date of extension or conversion, (iii) Loans extended as,
or converted into, Eurodollar Loans shall be subject to the terms of the
definition of "Interest Period" set forth in Section 1.1 and shall be in such
---------------
minimum amounts as provided in, with respect to Revolving Loans, Section
2.1(b)(ii) or, with respect to the Term Loan, Section 2.4(c), (iv) no more than
ten (10) Eurodollar Loans shall be outstanding hereunder at any time, of which
no more than seven (7) of such Eurodollar Loans shall be Revolving Loans and no
more than (3) of such Eurodollar Loans shall be Term Loans (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period) and (v) any
request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to the office of the Agent specified in Schedule
--------
2.1(a), or at such other office as the Agent may designate in writing, prior to
------
12:00 P.M. (Charlotte, North Carolina time) on the Business Day of, in the case
of the conversion of a Eurodollar Loan into a Base Rate Loan, and on the
35
third Business Day prior to, in the case of the extension of a Eurodollar Loan
as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or conversion
shall be irrevocable and shall constitute a representation and warranty by the
Borrower of the matters specified in subsections (b), (c), (d), (e) and (f) of
Section 5.2. In the event the Borrower fails to request extension or conversion
of any Eurodollar Loan in accordance with this Section, or any such conversion
or extension is not permitted or required by this Section, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion affecting
any Loan.
3.3 Prepayments.
-----------
(a) Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay Loans in whole or in part from time to time; provided, however, that
-------- -------
each partial prepayment of Loans shall be in a minimum principal amount of
$5,000,000 and integral multiples of $1,000,000. Subject to the foregoing
terms, amounts prepaid under this Section 3.3(a) shall be applied as the
Borrower may elect; provided that if the Borrower fails to specify a
--------
voluntary prepayment then such prepayment shall be applied first to
Revolving Loans and then to the Term Loan, in each case first to Base Rate
Loans and then to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 3.3(a) shall be subject to
Section 3.12, but otherwise without premium or penalty.
(b) Mandatory Prepayments.
---------------------
(i) Revolving Committed Amount. If at any time (A) the amount of
--------------------------
the Revolving Obligations then outstanding shall exceed the lesser of
(x) the Revolving Committed Amount and (y) the Borrowing Base less the
----
outstanding Term Loan (B) the aggregate amount of LOC Obligations
outstanding shall exceed the LOC Committed Amount or (C) the amount of
Swingline Loans outstanding shall exceed the Swingline Committed
Amount, the Borrower shall immediately make payment on the Loans
and/or to a cash collateral account in respect of the LOC Obligations,
in an amount sufficient to eliminate the deficiency.
(ii) Asset Disposition. At such time as the Borrower or any of its
-----------------
Subsidiaries consummates an Asset Disposition, the Borrower shall
immediately notify the Agent of (a) the consummation of such Asset
Disposition and (b) the amount of Net Cash Proceeds received by the
Borrower or Subsidiary in connection with such Asset Disposition. The
Credit Parties hereby agree that the Borrower shall forward 100% of
the Net Cash Proceeds of such Asset Disposition to the Lenders as a
prepayment of the Loans (to be applied as set forth in Section
3.3(b)(v) below).
(iii) Casualty and Condemnation Proceeds. At such time as the
----------------------------------
Borrower or any of its Subsidiaries shall be required to pay cash
proceeds to the Agent from any insurance
36
policy or from any condemnation or taking pursuant to Section 7.6
hereof, the Borrower shall immediately notify the Agent thereof and
shall forward 100% of the cash proceeds to the Agent as required by
Section 7.6. If the Agent elects to apply such proceeds to the
prepayment of the Loans pursuant to Section 7.6, such prepayment shall
be applied as set forth in Section 3.3(b)( v) below.
(iv) Term Loan. If at any time after the Revolving Commitments
---------
have been terminated in full and permanently reduced to zero the
amount of the Term Loans outstanding shall exceed the Borrowing Base,
the Borrower shall immediately make payment on the Term Loans in an
amount sufficient to eliminate the deficiency.
(v) Application of Mandatory Prepayments. All amounts required
------------------------------------
to be paid pursuant to Section 3.3(b)(i) shall be applied first to
Revolving Loans and then to a cash collateral account to secure LOC
Obligations. All amounts required to be prepaid pursuant to Sections
3.3(b)(ii) and (iii) above shall be applied pro rata to (1) Revolving
Loans and (after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations and (2) the Term
Loan. One or more holders of the Term Loan may decline to accept a
mandatory prepayment under Sections 3.3(b)(ii) or (iii) to the extent
there are sufficient amounts outstanding under the Term Loan to be
prepaid with such prepayment, in which case such declined prepayments
shall be allocated pro rata among (x) the Revolving Loans and (y) pro
rata among the Term Loans held by Lenders accepting such prepayments.
All amounts required to be paid pursuant to Section 3.3(b)(iv) above
shall be applied to the Term Loan. Within the parameters of the
applications set forth above, prepayments shall be applied first to
Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. All prepayments under this Section 3.3(b)
shall be subject to Section 3.12.
3.4 Termination, Reduction and Increase of Revolving Committed Amount.
-----------------------------------------------------------------
(a) Termination and Reduction of Revolving Loan Commitments. The
-------------------------------------------------------
Borrower may from time to time permanently reduce or terminate the
Revolving Committed Amount in whole or in part (in minimum aggregate
amounts of $5,000,000 or in integral multiples of $1,000,000 in excess
thereof (or, if less, the full remaining amount of the then applicable
Revolving Committed Amount)) upon five Business Days' prior written notice
to the Agent; provided, that, no such termination or reduction shall be
--------
made which would cause the amount of the Revolving Obligations outstanding
to exceed the lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base less the outstanding Term Loan, unless, concurrently with
----
such termination or reduction, the Loans are repaid to the extent necessary
to eliminate such excess. The Agent shall promptly notify each affected
Lender of receipt by the Agent of any notice from the Borrower pursuant to
this Section 3.4.
(b) Increase in Revolving Loan Commitments. The Borrower shall have
--------------------------------------
the right upon at least fifteen (15) Business Days' prior written notice to
the Agent to increase the Revolving Committed Amount by up to $50,000,000,
in a single increase, at any time on or
37
after the Closing Date, subject, however, in any such case, to
------- -------
satisfaction of the following conditions precedent:
(i) no Default or Event of Default has occurred and is
continuing on the date on which such Revolving Committed Amount
increase is to become effective;
(ii) the representations and warranties set forth in Section 6
of this Credit Agreement shall be true and correct in all material
respects on and as of the date on which such Revolving Committed
Amount increase is to become effective;
(iii) on or before the date on which such Revolving Committed
Amount increase is to become effective, the Agent shall have received,
for its own account, the mutually acceptable fees and expenses
required by separate agreement of the Borrower and the Agent to be
paid in connection with such increase;
(iv) such Revolving Committed Amount increase shall be an
integral multiple of $5,000,000 and shall in no event be less than
$5,000,000; and
(v) such requested Revolving Commitment increase shall be
effective on such date only to the extent that, on or before such
date, (A) the Agent shall have received and accepted a corresponding
amount of Additional Commitment(s) pursuant to a commitment letter(s)
acceptable to the Agent from one or more Lenders acceptable to the
Agent and, with respect to any Lender that is not at such time a
Lender hereunder, to the Borrower and (B) each such Lender has
executed an agreement in the form of Exhibit 3.4(b) hereto (each such
--------------
agreement a "New Commitment Agreement"), accepted in writing therein
------------------------
by the Agent and, with respect to any Lender that is not at such time
a Lender hereunder, by the Borrower, with respect to the Additional
Commitment of such Lender.
3.5 Fees.
----
(a) Unused Line Fee. In consideration of the Revolving Commitments of
---------------
the Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "Unused Line Fee") computed at a per
---------------
annum rate equal to the Applicable Percentage for Unused Line Fee then in
effect on the Unused Revolving Committed Amount for each day during the
applicable Unused Line Fee Calculation Period (hereinafter defined). The
Unused Line Fee shall commence to accrue on the Closing Date and shall be
due and payable in arrears on the last business day of each March, June,
September and December (and any date that the Revolving Committed Amount is
reduced as provided in Section 3.4 and the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or
portion thereof for which the Unused Line Fee is payable hereunder being
herein referred to as an "Unused Line Fee Calculation Period"), beginning
----------------------------------
with the first of such dates to occur after the Closing Date. For purposes
of computation of the Unused Fee, the Swingline Loans shall not be counted
toward or considered usage under the Revolving Committed Amount.
38
(b) Letter of Credit Fees.
---------------------
(i) Letter of Credit Issuance Fee. In consideration of the
-----------------------------
issuance of standby Letters of Credit hereunder, the Borrower promises
to pay to the Agent for the account of each Lender a fee (the "Standby
-------
Letter of Credit Fee") on such Lender's Revolving Commitment
--------------------
Percentage of the average daily maximum amount available to be drawn
under each such standby Letter of Credit computed at a per annum rate
for each day from the date of issuance to the date of expiration equal
to the Applicable Percentage for Revolving Loans which are Eurodollar
Loans then in effect. The Standby Letter of Credit Fee will be
payable monthly in arrears on the last Business Day of each calendar
month for the immediately preceding calendar month (or a portion
thereof).
(ii) Trade Letter of Credit Fee. In consideration of the
--------------------------
issuance of trade Letters of Credit hereunder, the Borrower promises
to pay to the Agent for the account of each Lender a fee (the "Trade
-----
Letter of Credit Fee") on such Lender's Revolving Commitment
--------------------
Percentage of the amount of each drawing under any such trade Letter
of Credit equal to three-eighths percent (3/8%). The Trade Letter of
Credit Fee will be payable on each date of drawing under a trade
Letter of Credit.
(iii) Issuing Lender Fees. In addition to the Standby Letter of
-------------------
Credit Fee payable pursuant to clause (i) above and the Trade Letter
of Credit Fee payable pursuant to clause (ii) above, the Borrower
promises to pay to the Issuing Lender for its own account without
sharing by the other Lenders (A) a letter of credit fronting fee of
one-quarter percent (1/4%) per annum on the average daily maximum
amount available to be drawn under outstanding Letters of Credit
payable monthly in arrears with the Standby Letter of Credit Fee and
the Trade Letter of Credit Fee, and (B) customary charges from time to
time of the Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and drawings
under, such Letters of Credit (collectively, the "Issuing Lender
--------------
Fees").
----
(c) Administrative Fees. The Borrower agrees to pay to the Agent, for
-------------------
its own account and First Union Capital Markets, as applicable, the fees
referred to in the Agent's Fee Letters (collectively, the "Agent's Fees").
------------
3.6 Capital Adequacy.
----------------
If any Lender has determined in good faith, after the date hereof, that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Lender's policies with respect to
39
capital adequacy), then, upon notice from such Lender to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. Each determination by
any such Lender of amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties hereto.
3.7 Limitation on Eurodollar Loans.
------------------------------
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Agent determines (which determination shall be conclusive)
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; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, continue Eurodollar Loans, or to convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 Illegality.
----------
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans, shall forthwith be canceled and, until such time as it shall
no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.13.
3.9 Requirements of Law.
-------------------
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by
40
any Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Eurodollar Loans, its
Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of any
Eurodollar Loans (other than taxes imposed on the overall net income of
such Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender (or its Applicable Lending Office), including the Commitment of
such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting this
Credit Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
continue Eurodollar Loans, or to convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); provided
--------
that such suspension shall not affect the right of such Lender to receive the
compensation so requested. Each Lender shall promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this Section
3.9 and will designate a different Applicable Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section 3.9 shall furnish to the
Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.10 Treatment of Affected Loans.
---------------------------
If the obligation of any Lender to make any Eurodollar Loan or to continue,
or to convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such
41
Lender's Eurodollar Loans shall be automatically converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for such Eurodollar
Loans (or, in the case of a conversion required by Section 3.8 hereof, on such
earlier date as such Lender may specify to the Borrower with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to such
conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by such
Lender as Eurodollar Loans shall be made or continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 Taxes.
-----
(a) Any and all payments by any Credit Party to or for the account of
any Lender or the Agent hereunder or under any other Credit Document shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each
---------
Lender and the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or
its Applicable Lending Office) or the Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If any Credit Party
-----
shall be required by law to deduct any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to any
Lender or the Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.11) such Lender or the
Agent receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Credit Party shall make such
deductions, (iii) such Credit Party shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law, and (iv) such Credit Party shall furnish to the
42
Agent, at its address referred to in Section 11.1, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 3.11) paid by such Lender or the Agent (as the
case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Agent (but only so long as
such Lender remains lawfully able to do so), shall provide the Borrower and
the Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively
connected with the conduct of a trade or business in the United States,
(ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any
other form or certificate required by any taxing authority (including any
certificate required by Sections 871(h) and 881(c) of the Internal Revenue
Code), certifying that such Lender is entitled to an exemption from or a
reduced rate of tax on payments pursuant to this Credit Agreement or any of
the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to
indemnification under Section 3.11(a) or 3.11(b) with respect to Taxes
imposed by the United States; provided, however, that should a Lender,
-------- -------
which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(f) If any Credit Party is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.11, then such
Lender will agree to use reasonable
43
efforts to change the jurisdiction of its Applicable Lending Office so as
to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the applicable Credit Party shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 3.11 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and
the termination of the Commitments hereunder.
3.12 Compensation.
------------
Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, convert, continue, or prepay a Eurodollar Loan
on the date for such borrowing, conversion, continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, continuation, or
conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
------------------
44
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
-----
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
interest on the Loans or reimbursement obligations arising from drawings
under Letters of Credit, each payment of Unused Fees, each payment of the
Standby Letter of Credit Fee, each payment of the Trade Letter of Credit
Fee, each reduction in Commitments and each conversion or extension of any
Loan, shall be allocated pro rata among the Lenders in accordance with the
respective principal amounts of their outstanding Loans and Participation
Interests.
(b) Advances. No Lender shall be responsible for the failure or delay
--------
by any other Lender in its obligation to make its ratable share of a
borrowing 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 in
writing by any Lender prior to the date of any requested borrowing that
such Lender does not intend to make available to the Agent its ratable
share of such borrowing 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
borrowing, 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 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 the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Rate.
3.14 Sharing of Payments.
-------------------
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender
45
through the exercise of a right of setoff, banker's lien, counterclaim or other
event as aforesaid shall be rescinded or must otherwise be restored, each Lender
which shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest 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 Interest
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 Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 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 3.14 to share in the benefits of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
---------------------------
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in dollars in immediately available
funds, without setoff, deduction, counterclaim or withholding of any kind,
at the Agent's office specified in Schedule 2.1(a) not later than 2:00 P.M.
---------------
(Charlotte, North Carolina time) on the date when due. Payments received
after such time shall be deemed to have been received on the next
succeeding Business Day. The Agent may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Borrower or any other Credit Party
maintained with the Agent (with notice to the Borrower or such other Credit
Party). The Borrower shall, at the time it makes any payment under this
Credit Agreement, specify to the Agent the Loans, LOC Obligations, Fees,
interest or other amounts payable by the Borrower hereunder to which such
payment is to be applied (and in the event that it fails so to specify, or
if such application would be inconsistent with the terms hereof, the Agent
shall distribute such payment to the Lenders in such manner as the Agent
may determine to be appropriate in respect of obligations owing by the
Borrower hereunder, subject to the terms of Section 3.13(a)). The Agent
will distribute such payments to such Lenders, if any such payment is
received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business
Day in like funds as received prior to the end of such Business Day and
otherwise the Agent will distribute such payment to such Lenders on the
next succeeding Business Day. Whenever any payment hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to accrual
of interest and Fees for the period of such extension), except that in the
case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead
be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on
the basis of actual number of days elapsed
46
over a year of 360 days, except with respect to computation of interest on
Base Rate Loans which (unless the Base Rate is determined by reference to
the Federal Funds Rate) shall be calculated based on a year of 365 or 366
days, as appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
---------------------------------------------
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered
as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agent with respect
to the Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of each
of the Lenders in connection with enforcing its rights under the Credit
Documents or otherwise with respect to the Credit Party Obligations owing
to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations but excluding Credit Party Obligations
to the extent they consist of Obligations under Hedging Agreements);
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above;
SEVENTH, to all Credit Party Obligations consisting of Obligations
under Hedging Agreements ;and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the
47
then outstanding Loans and LOC Obligations held by such Lender bears to the
aggregate then outstanding Loans and LOC Obligations) of amounts available
to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH"
above; and (iii) to the extent that any amounts available for distribution
pursuant to clause "FIFTH" above are attributable to the issued but undrawn
amount of outstanding Letters of Credit, such amounts shall be held by the
Agent in a cash collateral account and applied (A) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters of
Credit and (B) then, following the expiration of all Letters of Credit, to
all other obligations of the types described in clauses "FIFTH" and "SIXTH"
above in the manner provided in this Section 3.15(b).
3.16 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 any Credit Party and each Lender's share thereof. The Agent
will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such
subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (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
Credit Parties therein recorded; provided, however, that the failure of any
-------- -------
Lender or the Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner
affect the obligation of the Credit Parties to repay the Credit Party
obligations owing to such Lender.
SECTION 4
GUARANTY
--------
4.1 The Guaranty.
------------
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, as primary obligor
48
and not as surety, the prompt payment of the Credit Party Obligations in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Credit Party Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Credit Party
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 Obligations Unconditional.
-------------------------
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor for amounts paid under this Section
4 until such time as the Lenders (and any Affiliates of Lenders entering into
Hedging Agreements) have been paid in full, all Commitments under this Credit
Agreement have been terminated and no Person or Governmental Authority shall
have any right to request any return or reimbursement of funds from the Lenders
in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed
that, to the fullest extent permitted by law, the occurrence of any one or more
of the following shall not alter or impair the liability of any Guarantor
hereunder which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Credit Party
Obligations shall be extended, or such performance or compliance shall be
waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
49
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 Reinstatement.
-------------
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the 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, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
--------------------------
Each Guarantor agrees that such Guarantor shall have no right of recourse
to security for the Credit Party Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of rights
of contribution pursuant to Section 4.6.
4.5 Remedies.
--------
50
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreement and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 Rights of Contribution.
----------------------
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of such Guaranteed Obligations.
For purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
----------------------
obligations arising under the other provisions of this Section 4; (b) "Excess
------
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
-------
Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
--------------
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties taken as a going concern exceeds the amount
of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Credit Parties taken as a going concern exceeds the amount of all of the
debts and liabilities (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Credit Parties
hereunder) of the Credit Parties; provided, however, that, for purposes of
-------- -------
calculating the Pro Rata Shares of the Guarantors in respect of any payment of
Guaranteed Obligations, any Guarantor that became a Guarantor subsequent to the
date of any such payment shall be deemed to have been a Guarantor on the date of
such payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such payment; and (d) "Contribution Share" shall mean, for any
------------------
Guarantor in respect of any Excess Payment made by any other Guarantor, the
ratio (expressed as a percentage) as of the date of such Excess Payment of (i)
the amount by which the aggregate present fair salable value of all of its
assets and properties exceeds the amount of all debts and liabilities of such
Guarantor (including
51
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Credit Parties other than the maker of such Excess Payment exceeds the amount of
all of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Credit
Parties) of the Credit Parties other than the maker of such Excess Payment;
provided, however, that, for purposes of calculating the Contribution Shares
-------- -------
of the Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Guaranteed
Obligations.
4.7 Guarantee of Payment; Continuing Guarantee.
------------------------------------------
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
----------
5.1 Closing Conditions.
------------------
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) 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 in its sole discretion.
(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 Closing 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 Closing Date.
(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
52
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 Closing 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 could have a Material Adverse Effect.
(v) Incumbency. An incumbency certificate of each Credit Party
----------
certified by a secretary or assistant secretary to be true and correct
as of the Closing Date.
(c) Financial Statements. Receipt by the Agent of (i) the audited
--------------------
consolidated financial statements of the Borrower and its Subsidiaries,
including balance sheets and income and cash flow statements for the fiscal
years ending December 31, 1997 and 1998, in each case prepared in
conformity with GAAP and in form and substance reasonably satisfactory to
the Agent, (ii) the unaudited consolidated financial statements of the
Borrower and its Subsidiaries, including balance sheets and income and cash
flow statements for the three-month period ended March 31, 1999, in each
case prepared in conformity with GAAP and in form and substance reasonably
satisfactory to the Agent, (iii) satisfactory financial projections for the
Borrower and its Subsidiaries for each twelve-month period through the
twelve-month period occurring five (5) years from the Closing Date and (iv)
such other information relating to the Borrower and its Subsidiaries as the
Agent may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein.
(d) Opinions of Counsel. The Agent shall have received a legal
-------------------
opinion in form and substance reasonably satisfactory to the Lenders dated
as of the Closing Date from counsel to the Credit Parties.
(e) Personal Property Collateral. The Agent shall have received:
----------------------------
(i) searches of Uniform Commercial Code 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;
(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 and
53
such patent/trademark/copyright filings as requested by the Agent in
order to perfect the Agent's security interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged
to the Agent pursuant to the Pledge Agreement, together with duly
executed in blank, undated stock powers attached thereto (unless, with
respect to the pledged Capital Stock of any Foreign Subsidiary, such
stock powers are deemed unnecessary by the Agent in its reasonable
discretion under the law of the jurisdiction of incorporation of such
Person); and
(v) duly executed consents as are necessary, in the Agent's
reasonable discretion, to perfect the Agent's security interest in the
Collateral.
(f) Priority of Liens. The Agent shall have received satisfactory
-----------------
evidence that (i) the Agent, on behalf of the Lenders, holds a perfected,
first priority Lien on all Collateral (provided that the Agent's perfected
Lien shall not be required to be first priority with respect to Collateral
subject to a previously perfected Permitted Lien) and (ii) none of the
Collateral is subject to any other Liens other than Permitted Liens.
(g) Opening Borrowing Base. Receipt by the Agent of a Borrowing Base
----------------------
Certificate as of the Closing Date, substantially in the form of Exhibit
-------
7.1(d) and certified by the chief financial officer of the Borrower to be
------
true and correct as of the Closing Date.
(h) Evidence of Insurance. Receipt by the Agent of copies of
---------------------
insurance policies or certificates of insurance of the Consolidated Parties
evidencing liability and casualty insurance meeting the requirements set
forth in the Credit Documents, including, but not limited to, naming the
Agent as sole loss payee on behalf of the Lenders.
(i) Material Adverse Effect. No material adverse change shall have
-----------------------
occurred since December 31, 1998 in the condition (financial or otherwise),
business, assets, operations, management or prospects of the Consolidated
Parties taken as a whole.
(j) Litigation. There shall not exist any pending or threatened
----------
action, suit, investigation or proceeding against a Consolidated Party that
could reasonably be expected to have a Material Adverse Effect.
(k) Officer's Certificates. The Agent shall have received a
----------------------
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date certifying that (A) each Credit Party is in
compliance with all existing financial obligations, including, without
limitation, the Senior Subordinated Notes, (B) all governmental,
shareholder and third party consents and approvals, if any, with respect to
the Credit Documents and the transactions contemplated thereby have been
obtained, (C) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party or any transaction
contemplated by the Credit Documents, if such action, suit,
54
investigation or proceeding could reasonably be expected to have a Material
Adverse Effect, and (D) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions contemplated
therein to occur on such date, (1) each of the Credit Parties is Solvent,
(2) no Default or Event of Default exists, (3) all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all material respects, (4) the Credit Parties are in pro forma
compliance with each of the financial covenants set forth in Section 7.11
as of June 30, 1999 (which certificate shall set forth the calculations
therefor in reasonable detail), and (5) Consolidated Funded Indebtedness
does not exceed $680 million (of which at least $270 million is comprised
of Indebtedness evidenced by the Senior Subordinated Notes.
(l) Corporate Structure. The corporate capital and ownership
-------------------
structure of the Consolidated Parties shall be as described in Schedule
--------
6.13.
----
(m) Government Consent. Receipt by the Agent of evidence that all
------------------
governmental, shareholder and material third party consents and approvals
necessary or desirable in connection with the financings and other
transactions contemplated hereby have been obtained except for those the
failure of which to so obtain could not reasonably be expected to have a
Material Adverse Effect.
(n) Fees and Expenses. Payment by the Credit Parties of all fees and
-----------------
expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(o) Financial Requirements. Receipt by the Agent of satisfactory
----------------------
evidence that Consolidated Funded Indebtedness does not exceed $680 million
(of which at least $270 million is comprised of Indebtedness evidenced by
the Senior Subordinated Notes).
(p) Funds Flow Memorandum. Receipt by the Agent of (i) a statement of
---------------------
sources and uses of funds covering all payments reasonably expected to be
made by the Credit Parties in connection with the transactions contemplated
by the Credit Documents to be consummated on the Closing Date and (ii)
payment instructions with respect to each wire transfer to be made by the
Agent, or the Credit Parties on the Closing Date setting forth the amount
of such transfer, the purpose of such transfer, the name and number of the
account to which such transfer is to be made, the name and ABA number of
the bank or other financial institution where such account is located and
the name and telephone number of an individual that can be contacted to
confirm receipt of such transfer.
(q) Account Designation Letter. Receipt by the Agent of an account
--------------------------
designation letter (the "Account Designation Letter") in the form of
--------------------------
Exhibit 5.1(t) hereto.
--------------
(r) Other. Receipt by the Lenders of such other documents,
-----
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent),
55
real estate leases, material contracts, debt agreements, property ownership
and contingent liabilities of the Consolidated Parties.
5.2 Conditions to all Extensions of Credit.
--------------------------------------
The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any Revolving
Loan or any portion of the Term Loan, an appropriate Notice of Borrowing or
Notice of Extension/Conversion or (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);
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against any Consolidated Party
an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation of
its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) No circumstances, events or conditions shall have occurred since
December 31, 1998 which would have a Material Adverse Effect; and
(f) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the amount of the Revolving Obligations
shall not exceed the lesser of (A) the Revolving Committed Amount and (B)
the Borrowing Base less the outstanding Term Loan, (ii) the LOC Obligations
----
shall not exceed the LOC Committed Amount and (iii) the outstanding
Swingline Loans shall not exceed the Swingline Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c), (d), (e) and (f)
above.
56
SECTION 6
REPRESENTATIONS AND WARRANTIES
------------------------------
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
-------------------
The financial statements delivered to the Lenders pursuant to Section
5.1(c) and Sections 7.1(a) and (b) (i) have been prepared in accordance with
GAAP and (ii) present fairly in all material respects (on the basis disclosed in
the footnotes to such financial statements) the consolidated and consolidating
financial condition, results of operations and cash flows of the Consolidated
Parties as of such date and for such periods.
6.2 No Material Change.
------------------
Since December 31, 1998 (a) there has been no development or event relating
to or affecting a Consolidated Party which has had or could reasonably be
expected to have a Material Adverse Effect and (b) except as otherwise permitted
under this Credit Agreement, no dividends or other distributions have been
declared, paid or made upon the Capital Stock in a Consolidated Party nor has
any of the Capital Stock in a Consolidated Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 Organization and Good Standing.
------------------------------
Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
---------------------------------------------
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit
57
Party is a party, except for filings to perfect the Liens created by the
Collateral Documents and filings required from time to time by the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
This Credit Agreement has been, and each other Credit Document to which any
Credit Party is a party will be, duly executed and delivered on behalf of the
Credit Parties. This Credit Agreement constitutes, and each other Credit
Document to which any Credit Party is a party when executed and delivered will
constitute, a legal, valid and binding obligation of such Credit Party
enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
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 its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation T, U or X),
order, writ, judgment, injunction, decree or permit applicable to it except
where such violation, conflict or contravention could not reasonably be expected
to have a Material Adverse Effect, (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 reasonably be 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.
6.6 No Default.
----------
No Consolidated Party 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 could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
6.7 Ownership.
---------
Each Consolidated Party is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.8 Indebtedness.
------------
Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.
58
6.9 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 Consolidated Party which could reasonably be expected to
have a Material Adverse Effect.
6.10 Taxes.
-----
Each Consolidated Party has filed, or caused to be filed, all tax returns
(federal, state, local and foreign) required to be filed and paid (a) all
amounts of taxes shown thereon to be due (including interest and penalties) and
(b) all other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) known
by such Consolidated Party to be due and owing by it, 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. No Credit Party is aware as of the Closing Date of any
proposed tax assessments against it or any other Consolidated Party.
6.11 Compliance with Law.
-------------------
Each Consolidated Party 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 could not reasonably be expected to have a Material
Adverse Effect.
6.12 ERISA.
-----
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in
compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
59
(c) Except as would not have a Material Adverse Effect, neither any
Consolidated Party nor any ERISA Affiliate has incurred, or, to the best
knowledge of the Credit Parties, could be reasonably expected to incur, any
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Except as would not have a Material Adverse Effect, neither
any Consolidated Party nor any ERISA Affiliate would become subject to any
withdrawal liability under ERISA if any Consolidated Party or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. Neither any
Consolidated Party nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization (within the meaning of
Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of ERISA),
and no Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject any
Consolidated 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 Consolidated Party
or any ERISA Affiliate has agreed or is required to indemnify any Person
against any such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliate has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Code apply has been administered in compliance in all material respects of
such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder will
involve any transaction which is subject to the prohibitions of Sections
404, 406 or 407 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code. The representation by the Credit
Parties in the preceding sentence is subject, in the event that the source
of the funds used by the Lenders in connection with this transaction is an
insurance company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995), compliance
with the regulations issued under Section 401(c)(1)(A) of ERISA, or the
issuance of any other prohibited transaction exemption or similar relief,
to the effect that assets in an insurance company's general asset account
do not constitute assets of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA of a "plan" within the meaning of Section
4975(e)(1) of the Code.
6.13 Subsidiaries.
------------
Set forth on Schedule 6.13 is a complete and accurate list of all
-------------
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
-------------
jurisdiction of incorporation, the number of shares of each
60
class of Capital Stock outstanding, the number and percentage of outstanding
shares of each class owned (directly or indirectly) by such Consolidated Party;
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding Capital Stock of all such Subsidiaries is validly
issued, fully paid and non-assessable and is owned by each such Consolidated
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 6.13, no Subsidiary 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.
6.14 Governmental Regulations, Etc.
-----------------------------
(a) No part of the Letters of Credit or proceeds of the Loans will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or 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 Consolidated
Parties. None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds
of the Loans) will violate or result in a violation of the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or
regulations issued pursuant thereto, or Regulation T, U or X.
(b) No Consolidated Party 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
Consolidated Party is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, and is
not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) As of the Closing Date, no director, executive officer or
principal shareholder of any Consolidated Party 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.
61
(d) Each Consolidated Party has obtained and holds 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 ownership of its
respective Property and to the conduct of its respective businesses as
presently conducted except where the failure to so obtain or maintain could
not reasonably be expected to have a Material Adverse Effect.
(e) No Consolidated Party is in violation of any applicable statute,
regulation or ordinance of the United States of America, or of any state,
city, town, municipality, county or any other jurisdiction, or of any
agency thereof (including without limitation, environmental laws and
regulations), which violation could have a Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions.
6.15 Purpose of Loans and Letters of Credit.
--------------------------------------
The proceeds of the Loans hereunder shall be used solely by the Borrower
(i) for working capital, (ii) for refinancing certain existing Indebtedness of
the Consolidated Parties, (iii) to make Permitted Acquisitions (and to pay
related fees and expenses) and (iv) for general corporate purposes.
6.16 Environmental Matters.
---------------------
Except as would not have a Material Adverse Effect,
(a) Each of the facilities and properties owned, leased or operated
by the Consolidated Parties (the "Properties") and all operations at the
----------
Properties are in compliance with all applicable Environmental Laws, and
there is no violation of any Environmental Law with respect to the
Properties or the businesses operated by the Consolidated Parties (the
"Businesses"), and there are no conditions relating to the Businesses or
----------
Properties that could give rise to liability under any applicable
Environmental Laws.
(b) None of the Properties contains, or has previously contained, any
Materials of Environmental Concern at, on or under the Properties in
amounts or concentrations that constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(c) No Consolidated Party has received any written or verbal notice
of, or inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Businesses, nor does any
Consolidated Party have knowledge or reason to believe that any such notice
will be received or is being threatened.
62
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed
of at, on or under any of the Properties or any other location, in each
case by or on behalf of any Consolidated Party in violation of, or in a
manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the best knowledge of any Credit Party, threatened, under
any Environmental Law to which any Consolidated Party is or will be named
as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to the Consolidated Parties, the Properties or the Businesses.
(f) There has been no release, or threat of release, of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations (including, without limitation, disposal) of any
Consolidated Party in connection with the Properties or otherwise in
connection with the Businesses, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws.
6.17 Intellectual Property.
---------------------
Each Consolidated Party owns, or has the legal right to use, all
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 could not reasonably be expected to have a Material Adverse Effect. Set
forth on Schedule 6.17 is a list of all Intellectual Property owned by each
-------------
Consolidated Party or that any Consolidated Party has the right to use. Except
as provided on Schedule 6.17, no claim has been asserted and is pending by any
-------------
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does any
Credit Party know of any such claim, and to the Credit Parties' knowledge the
use of such Intellectual Property by any Consolidated Party does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.18 Solvency.
--------
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 Investments.
-----------
All Investments of each Consolidated Party are Permitted Investments.
6.20 Location of Collateral.
----------------------
63
Set forth on Schedule 6.20(a) is a list of all locations where any tangible
----------------
personal property of a Consolidated Party is located, including county and state
where located. Set forth on Schedule 6.20(b) is the chief executive office and
----------------
principal place of business of each Consolidated Party.
6.21 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 Consolidated 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 not misleading.
6.22 No Burdensome Restrictions.
--------------------------
No Consolidated Party is a party to any agreement or instrument, or is in
breach of or in violation of any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
6.23 Brokers' Fees.
-------------
Except for fees payable to First Union Capital Markets in connection with
the closing and syndication of this Credit Agreement, no Consolidated Party has
any obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents to occur on the Closing Date.
6.24 Labor Matters.
-------------
Except as set forth on Schedule 6.24, there are no collective bargaining
-------------
agreements or Multiemployer Plans covering the employees of a Consolidated Party
as of the Closing Date and none of the Consolidated Parties has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years.
6.25 Year 2000 Compliance.
--------------------
Each of the Credit Parties has conducted a review and assessment of its
computer applications and made inquiry of its key suppliers, vendors and
customers with respect to the "year 2000 problem" (that is, the risk that
computer applications may not be able to properly perform date-sensitive
functions after December 31, 1999) and, based on that review and inquiry, the
Credit Parties believe that the year 2000 problem will not result in a material
adverse change in its business condition (financial or otherwise), operations,
business, assets, liabilities or prospects of the Credit Parties taken as a
whole, or on the ability of any Credit Party to perform any material obligation
under the Credit Documents to which it is a party.
64
6.26 Material Contracts.
------------------
Attached hereto as Schedule 6.26 is a true, correct and complete list of
-------------
all the Material Contracts currently in effect on the date hereof. All of the
Material Contracts are in full force and effect.
6.27 Senior Debt.
-----------
The Loans and other extensions of credit under this Credit Agreement
constitute "Senior Debt" under the indenture for the Senior Subordinated Notes.
SECTION 7
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding (other than contingent indemnity
obligations), and until all of the Commitments 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
Consolidated Parties, a consolidated balance sheet and income statement of
the Consolidated Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and of
cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited
by independent certified public accountants of recognized national standing
reasonably acceptable to the Agent and whose opinion shall be to the effect
that such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not be
limited as to the scope of the audit or qualified as to the status of the
Consolidated Parties as a going concern.
(b) Interim Financial Statements.
----------------------------
(i) Quarterly Financial Statements. As soon as available, and
------------------------------
in any event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which case
90 days after the end thereof) a consolidated balance sheet and income
statement of the Consolidated Parties, as of the end of such fiscal
quarter, together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal quarter, in each case
setting forth in comparative form consolidated figures for the
65
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 Consolidated Parties and have been prepared in accordance
with GAAP, subject to changes resulting from audit and normal year-end
audit adjustments.
(ii) Monthly Financial Statements. As soon as available, and in
----------------------------
any event within 30 days after the close of each fiscal month, financial
statements of the Consolidated Parties as of the end of such month
substantially in the form of the monthly financial statements prepared in
connection with the fiscal month ended June 30, 1999 and in form and detail
reasonably acceptable to the Agent (as such form may be updated or modified
from time to time in a manner reasonably acceptable to the Agent).
(c) Officer's Certificate. At the time of delivery of the financial
---------------------
statements provided for in Sections 7.1(a) and 7.1(b)(i) above, a
certificate of the chief financial officer of the Borrower substantially in
the form of Exhibit 7.1(c), (i) demonstrating compliance with the financial
--------------
covenants contained in Section 7.11 by calculation thereof as of the end of
each such fiscal period and (ii) stating that no Default or Event of
Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Credit Parties
propose to take with respect thereto.
(d) Borrowing Base Certificates. Within 30 days after the end of
---------------------------
each calendar month, a report on the Borrowing Base (a "Borrowing Base
--------------
Certificate") as of the end of the immediately preceding month,
-----------
substantially in the form of Exhibit 7.1(d) and certified by the chief
--------------
financial officer of the Borrower to be true and correct as of the date
thereof, together with (i) a consolidated summary of aged Accounts
Receivable as of the last day of such month, (ii) a schedule of inventory
of the Credit Parties as of the last day of such month and (iii) a
calculation of the financial covenant contained in Section 7.11(e)
demonstrating compliance therewith as of the end of such calendar month.
(e) Annual Budgets. No later than 30 days after the beginning of each
--------------
fiscal year, a budget for such fiscal year of the Borrower which includes
(i) a projected consolidated balance sheet and statement of income of the
Credit Parties for such fiscal year and a projected consolidated statement
of cash flows of the Credit Parties for such fiscal year and (ii) projected
consolidated and consolidating balance sheets, statements of income and
statements of cash flows of the Credit Parties on a monthly basis for such
fiscal year.
(f) 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.
66
(g) Auditor's Reports. Promptly upon receipt thereof, a copy of any
-----------------
other report or "management letter" submitted by independent accountants to
any Consolidated Party in connection with any annual, interim or special
audit of the books of such Person.
(h) Reports. Promptly upon transmission or receipt thereof, (i)
-------
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders generally or to a holder
of any Indebtedness owed by any Consolidated Party in its capacity as such
a holder and (ii) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection Agency,
or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state
or local agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety matters.
(i) Notices. Upon obtaining knowledge thereof, the Credit Parties
-------
will give written notice to the Agent immediately of (i) the occurrence of
an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, and (ii) the occurrence of
any of the following with respect to any Consolidated Party: (A) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against such Consolidated Party which if adversely determined
could reasonably be expected to have a Material Adverse Effect, (B) the
institution of any proceedings against such Consolidated Party with respect
to, or the receipt of notice by such Consolidated Party 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 could reasonably be expected
to have a Material Adverse Effect, or (C) any notice or determination
concerning the imposition of any withdrawal liability by a Multiemployer
Plan against such Consolidated Party or any ERISA Affiliate, the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA or the termination
of any Plan.
(j) ERISA. Upon obtaining knowledge thereof, the Credit Parties will
-----
give written notice to the Agent promptly (and in any event within five
business days) of: (i) any event or condition, including, but not limited
to, any Reportable Event, that constitutes, or might reasonably lead to, an
ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt of
notice as prescribed in ERISA or otherwise of any withdrawal liability
assessed against the Credit Parties or any 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 any Consolidated Party or any ERISA Affiliate is required
to contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with respect
thereto; or (iv) any change in the funding status of any Plan that could
have a Material Adverse Effect, together with a description of any such
event or condition or a copy of any such notice and a statement by the
chief financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which
has been
67
or is being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the Credit Parties shall furnish
the Agent and the Lenders with such additional information concerning any
Plan as may be reasonably requested, including, but not limited to, copies
of each annual report/return (Form 5500 series), as well as all schedules
and attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39) of
ERISA).
(k) Environmental.
-------------
(i) Upon the reasonable written request of the 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 as to the nature and extent of the presence
of any Materials of Environmental Concern on any Properties (as
defined in Section 6.16) and as to the compliance by any Consolidated
Party with Environmental Laws at such Properties. If the Credit
Parties fail to deliver such an environmental report within seventy-
five (75) days after receipt of such written request then the Agent
may arrange for same, and the Consolidated Parties hereby grant to the
Agent and their representatives access to the Properties to reasonably
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) The Consolidated Parties will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Materials of
Environmental Concern on, from or affecting any of the Properties to
the extent necessary to be in compliance with all Environmental Laws
and with the validly issued orders and directives of all Governmental
Authorities with jurisdiction over such Properties to the extent any
failure could have a Material Adverse Effect.
(l) Additional Patents and Trademarks. At the time of delivery of
---------------------------------
the financial statements and reports provided for in Section 7.1(a), a
report signed by the chief financial officer or treasurer of the Borrower
setting forth (i) a list of registration numbers for all patents,
trademarks, service marks, tradenames and copyrights awarded to any
Consolidated Party since the last day of the immediately preceding fiscal
year and (ii) a list of all patent applications, trademark applications,
service xxxx applications, trade name applications and copyright
applications submitted by any Consolidated Party since the last day of the
immediately preceding fiscal year and the status of each such application,
all in such form as shall be reasonably satisfactory to the Agent.
68
(m) Accounts Receivable Aging Report. Promptly after request by the
--------------------------------
Agent, an Accounts Receivable aging report as of the date reasonably
required by the Agent.
(n) Other Information. With reasonable promptness upon any such request,
-----------------
such other information regarding the business, properties or financial
condition of any Consolidated Party as the Agent or the Required Lenders
may reasonably request.
7.2 Preservation of Existence and Franchises.
----------------------------------------
Except as a result of or in connection with a merger of a Subsidiary
permitted under Section 8.4, each Credit Party will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority except where the failure
to so preserve could not reasonably be expected to have a Material Adverse
Effect.
7.3 Books and Records.
-----------------
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 Compliance with Law.
-------------------
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
---------------------------------------
Each Credit Party will, and will cause each of its Subsidiaries to, pay and
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) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Consolidated
-------- -------
Party shall 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) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could
reasonably be expected to have a Material Adverse Effect.
7.6 Insurance; Condemnation.
-----------------------
69
Each Credit Party will, and will cause each of the Consolidated Parties to,
maintain public liability insurance, third party property damage insurance and
replacement value insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as are
commercially reasonable and customary in the industry in which such Consolidated
Parties are engaged. In addition, the Credit Parties will obtain and maintain,
within 60 days of the Closing Date, general liability insurance in the minimum
aggregate amount of $10,000,000 for the Consolidated Parties. All policies
covering the Collateral are to name the Borrower and the Agent, on behalf of the
Lenders, as loss payees, on casualty insurance policies, and to name the
Borrower, the Agent and the Lenders as additional insureds on liability
insurance policies, and are to contain such other provisions as the Agent may
reasonably require to fully protect the Agent's interest in the Collateral and
to any payments to be made under such policies. True copies of all original
insurance policies are to be delivered to the Agent on or prior to the Closing
Date, premium prepaid, with the loss payable endorsement in the Agent's favor,
and shall provide for not less than thirty (30) days prior written notice to the
Agent, of the exercise of any right of cancellation. In the event any
Consolidated Party fails to respond in a timely and appropriate manner (as
determined by the Agent in its reasonable discretion) with respect to making a
claim under any insurance policies required to be maintained under this Section
7.6, the Agent shall have the right, in the name of the Agent or any
Consolidated Party, to file claims under such insurance policies, to receive and
give acquittance for any payments that may be payable thereunder, and to execute
any and all endorsements, receipts, releases, assignments, reassignments or
other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. Each Credit Party
will provide written notice to the Lenders of the occurrence of any of the
following events within five (5) Business Days after an Executive Officer of
such Credit Party learns of the occurrence of such event: any asset or property
owned or used by any Consolidated Party is (a) materially damaged or destroyed,
or suffers any other loss or (b) is condemned, confiscated or otherwise taken,
in whole or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purpose
to which such asset or property was used immediately prior to such condemnation,
confiscation or taking, by exercise of the powers of condemnation or eminent
domain or otherwise, and in either case the amount of the damage, destruction,
loss or diminution in value of the Collateral is in excess of $4,375,000 (each
such event or occurrence in excess of $4,375,000 being herein referred to as a
"Casualty Loss"). Each Credit Party will diligently file and prosecute its
claim or claims for any award or payment in connection with a Casualty Loss. In
the event of a Casualty Loss, the Credit Parties will pay to the Agent, promptly
upon receipt thereof, any and all insurance proceeds and payments received by
any Consolidated Party on account of damage, destruction or loss of all or any
portion of the Collateral. The Agent may, at its election and in its sole
discretion (and with the approval of the Required Lenders if such Casualty Loss
is in excess of $8,750,000), either (i) apply the proceeds realized from
Casualty Losses to payment of accrued and unpaid interest on, or outstanding
principal of, the Term Loans or the Revolving Loans, as provided in Section
3.3(b), or (ii) pay such proceeds to the Credit Parties to be used to repair,
replace or rebuild the asset or property or portion thereof that was the subject
of the Casualty Loss. After the occurrence and during the continuance of an
Event of Default, (A) no settlement on account of any such Casualty Loss shall
be made without the consent of the Required Lenders and (B) the Agent may
participate in any such proceedings and the Credit Parties will deliver to the
Agent such documents as may be requested by the Agent to permit such
participation and will consult with the Agent, its attorneys and
70
agents in the making and prosecution of such claim or claims. Each Credit Party
hereby irrevocably authorizes and appoints the Agent its attorney-in-fact, after
the occurrence and during the continuance of an Event of Default, to collect and
receive any such award or payment and to file and prosecute such claim or
claims, which power of attorney shall be irrevocable and shall be deemed to be
coupled with an interest, and each Credit Party shall, upon demand of the Agent,
make, execute and deliver any and all assignments and other instruments
sufficient for the purpose of assigning any such award or payment to the Agent
for the benefit of the Lenders, free and clear of any encumbrances of any kind
or nature whatsoever.
7.7 Maintenance of Property.
-----------------------
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 Performance of Obligations.
--------------------------
Each Credit Party will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
7.9 Use of Proceeds.
---------------
The Borrower will use the proceeds of the Loans and will use the Letters of
Credit solely for the purposes set forth in Section 6.15.
7.10 Audits/Inspections.
------------------
Each Credit Party will, and will cause each of its Subsidiaries to, at the
expense of the Credit Parties, permit the Agent and representatives appointed by
the Agent (including, without limitation, independent accountants, agents,
attorneys, and appraisers) at any time, upon reasonable notice, in the Agent's
sole discretion or at the direction of the Required Lenders to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, to conduct periodic
field exams and/or appraisals of the rental fleet of the Consolidated Parties
and to make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person. Notwithstanding the foregoing, the Credit
Parties shall only be required to pay for two (2) such inspections per year
unless an Event of Default has occurred and is continuing.
71
7.11 Financial Covenants.
-------------------
(a) Interest Coverage Ratio. The Interest Coverage Ratio, as of the
-----------------------
last day of each fiscal quarter of the Consolidated Parties, shall be
greater than or equal to 2.50 to 1.00.
(b) Total Debt Leverage Ratio. The Total Debt Leverage Ratio, as of
-------------------------
the last day of each fiscal quarter of the Consolidated Parties, shall be
less than or equal to (i) 4.50 to 1.00 for each fiscal quarter ending on or
after June 30, 1999 but prior to December 31, 1999 and (ii) 4.25 to 1.00
for each fiscal quarter ending on or after December 31, 1999.
(c) Senior Debt Leverage Ratio. The Senior Debt Leverage Ratio, as of
--------------------------
the last day of each fiscal quarter of the Consolidated Parties, shall be
less than or equal to (i) 3.25 to 1.0 for the fiscal quarter ending on June
30, 1999, (ii) 3.00 to 1.00 for the fiscal quarter ending on September 30,
1999 and (iii) 2.75 to 1.00 for each fiscal quarter ending on or after
December 31, 1999.
Notwithstanding the foregoing, in the event that the Borrower makes a
Price Reduction Election, the maximum allowable Senior Debt Leverage Ratio
for each corresponding period occurring after the date of such Price
Reduction Election through the Maturity Date shall be permanently reduced
by 0.25.
(d) Consolidated Net Worth. At all times Consolidated Net Worth shall
----------------------
be greater than or equal to the sum of $110,000,000, increased on a
cumulative basis as of the end of each fiscal quarter of the Borrower,
commencing with the fiscal quarter ending December 31, 1997 by an amount
equal to (i) 50% of Consolidated Net Income for the fiscal quarter then
ended (without deductions for any losses) and (ii) 100% of the Net Cash
Proceeds of issuances of Capital Stock by any Consolidated Party in
whatever form (other than to another Credit Party) occurring subsequent to
the Closing Date.
(e) Senior Debt to Borrowing Base. Consolidated Senior Indebtedness
-----------------------------
secured by Permitted Liens, as of the last day of each fiscal month of the
Consolidated Parties, plus LOC Obligations shall not exceed the Borrowing
----
Base.
7.12 Additional Credit Parties.
-------------------------
(a) On or before the date any Person becomes a Subsidiary of any
Credit Party, the Borrower shall provide the Agent with written notice
thereof setting forth information in reasonable detail describing all of
the assets of such Person and shall (a) if such Person is a Domestic
Subsidiary of a Credit Party, cause such Person to execute a Joinder
Agreement in substantially the same form as Exhibit 7.12, (b) cause 100%
------------
(if such Person is a Domestic Subsidiary of a Credit Party) or 65% (if such
Person is a direct Foreign Subsidiary of a Credit Party) of the Capital
Stock of such Person to be delivered to the Agent (together with undated
stock powers signed in blank (unless, with respect to a Foreign Subsidiary,
such stock powers are deemed unnecessary by the Agent in its reasonable
72
discretion under the law of the jurisdiction of incorporation of such
Person)) and pledged to the Agent pursuant to an appropriate pledge
agreement(s) in form acceptable to the Agent and (c) cause such Person to
deliver appropriate UCC-1 financing statements reasonably satisfactory to
the Agent.
(b) As soon as practicable and in any event not later than 30 days
after any Person becomes a Subsidiary of any Credit Party, the Borrower
shall cause such Person to deliver such other documentation as the Agent
may reasonably request in connection with the foregoing, including, without
limitation, real estate title insurance policies, environmental reports,
certified resolutions and other organizational and authorizing documents of
such Person, and favorable opinions of counsel to such Person all in form,
content and scope reasonably satisfactory to the Agent.
7.13 Environmental Laws.
------------------
(a) The Consolidated Parties shall comply in all material respects
with, and take reasonable actions to ensure compliance in all material
respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply in all material respects with and
maintain, and take reasonable actions to ensure that all tenants and
subtenants obtain and comply in all material respects with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except to the extent that failure
to do so would not reasonably be expected to have a Material Adverse
Effect;
(b) The Consolidated Parties shall conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal
and other actions required under Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings
and the failure to do or the pendency of such proceedings would not
reasonably be expected to have a Material Adverse Effect; and
(c) The Consolidated Parties shall defend, indemnify and hold harmless
the Agent and the Lenders, and their respective employees, agents, officers
and directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever
kind or nature known or unknown, contingent or otherwise, arising out of,
or in any way relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower
or any of its Subsidiaries or the Properties, or any orders, requirements
or demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification
therefor. The agreements in this
73
paragraph shall survive repayment of the Loans and all other amounts
payable hereunder, and termination of the Commitments.
7.14 Collateral.
----------
If, subsequent to the Closing Date, a Credit Party shall acquire any
intellectual property, securities instruments, chattel paper or other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents, the Borrower shall notify the Agent of the same
in each case as soon as practicable after the acquisition thereof. Each Credit
Party shall take such action as requested by the Agent and at its own expense,
to ensure that the Agent shall have a first priority perfected Lien in all
personal property of the Credit Parties (whether now owned or hereafter
acquired), subject only to Permitted Liens. Each Credit Party shall, and shall
cause each of its Subsidiaries to, adhere to the covenants regarding the
location of personal property as set forth in the Security Agreement. The
Credit Parties shall use its best efforts to deliver to the Agent (i) with
respect to all real property leased by any Credit Party as of the Closing Date,
landlord waivers and consents with respect to each such leased property no later
than 90 days after the Closing Date and (ii) with respect to all leases for real
property entered into by any Credit Party subsequent to the Closing Date,
landlord waivers and consents with respect to each such leased property, in each
case in form and substance reasonably satisfactory to the Agent.
7.15 Pledged Real Estate Assets.
--------------------------
Upon the request of the Agent, each Credit Party will, and will cause each
of its Subsidiaries to, cause (a) all of its owned real property and (b) all of
its leased real property, whether owned or leased as of, or subsequent to, the
Closing Date, to be subject at all times to first priority, perfected and title
insured Liens (other than Permitted Liens) in favor of the Agent pursuant to the
terms and conditions of such security documents and instruments, in form and
substance satisfactory to the Agent, as the Agent shall reasonably request. In
connection with any mortgage in favor of the Agent delivered pursuant to this
Section 7.15, the Agent shall be entitled to receive a title report, title
------------
insurance, such maps, plats or surveys as it may reasonably request, flood
insurance as required by law, evidence that the subject real property is in
compliance with all zoning and environmental laws and such other information and
documents as the Agent shall reasonably request. In furtherance of the
foregoing terms of this Section 7.15, each Credit Party agrees to promptly
------------
provide the Agent with written notice of the acquisition by, or the entering
into a lease by, any Consolidated Party of any real property assets having a
market value greater than $250,000 or annual lease payments in excess of
$250,000, setting forth in reasonable detail the location and a description of
the real property assets so acquired or leased.
7.16 Revisions or Updates to Schedules.
---------------------------------
If any of the information or disclosures provided on any of Schedules 6.13,
--------------
6.17, 6.20(a), 6.20(b) or 6.26, originally attached hereto become outdated or
------------------------------
incorrect in any material respect, the Borrowers shall deliver to the Agent and
the Lenders as part of the compliance certificate required pursuant to Section
-------
7.1(c) such revision or updates to such Schedule(s) as may be necessary or
------
74
appropriate to update or correct such Schedule(s), provided, that no such
--------
revisions or updates to any such Schedule(s) shall be deemed to have amended,
modified or superseded such Schedule(s) as originally attached hereto, or to
have cured any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule(s), unless and until the
Required Lenders, in their sole and absolute discretion, shall have accepted in
writing such revisions or updates to such Schedule(s) or unless such revision or
updates to such Schedule(s) would not have a Material Adverse Affect and would
not cause or result in a breach of a covenant hereunder or otherwise cause or
result in a Default or Event of Default hereunder.
SECTION 8
NEGATIVE COVENANTS
------------------
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding (other than contingent indemnity
obligations), and until all of the Commitments hereunder shall have terminated:
8.1 Indebtedness.
------------
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower set forth in Schedule 8.1 (and
------------
renewals, refinancings and extensions thereof on terms and conditions no
less favorable to such Person than such existing Indebtedness);
(c) purchase money Indebtedness (including obligations in respect of
Capital Leases or Synthetic Leases) hereafter incurred by the Credit
Parties to finance the purchase of fixed assets provided that (i) the total
--------
of all such Indebtedness (including any such Indebtedness referred to on
Schedule 8.1) shall not exceed an aggregate principal amount equal to eight
------------
percent (8%) of the Revolving Committed Amount at any one time outstanding;
(ii) such Indebtedness when incurred shall not exceed the purchase price of
the asset(s) financed; and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(d) obligations of the Borrower in respect of Hedging Agreements
entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;
75
(e) Subordinated Debt;
(f) Guaranty Obligations of any Credit Party with respect to
Indebtedness permitted pursuant to this Section 8.1 or other amounts with
-----------
respect to ordinary course obligations of a Credit Party in the nature of
operating leases or supply contracts;
(g) intercompany loans and advances made by the Borrower to any Credit
Party, by any Credit Party to the Borrower or by any Credit Party to
another Credit Party;
(h) indemnity obligations of any Credit Party arising in connection
with the representations and warranties made by such Credit Party with
respect to the sale or acquisition by such Credit Party of a Person or a
business unit of such Person sold or purchased as a going concern;
(i) Indebtedness in connection with attachment or judgment Liens which
are Permitted Liens, provided that the total of all such Indebtedness for
--------
all the Consolidated Parties taken together shall not exceed $1,000,000 by
in the aggregate at any one time outstanding;
(j) Indebtedness of any Credit Party evidenced by promissory notes or
other instruments given to officers or directors of such Credit Party in
consideration for the repurchase of Capital Stock or options of such Credit
Party; provided that such promissory notes or other instruments shall not
provide for any current payment of interest or principal on or prior to the
Maturity Date; and
(k) other unsecured Indebtedness of the Consolidated Parties in an
amount not to exceed $8,750,000 in the aggregate at any one time.
8.2 Liens.
-----
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
------------------
The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
8.4 Consolidation, Merger, Dissolution, etc.
---------------------------------------
The Credit Parties will not permit any Consolidated Party to enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution); provided that, notwithstanding the
--------
foregoing provisions of this Section 8.4, (a) the Borrower may merge or
76
consolidate with any of its Subsidiaries provided that (i) the Borrower shall be
--------
the continuing or surviving corporation, (ii) the Credit Parties shall cause to
be executed and delivered such documents, instruments and certificates as the
Agent may request in order to maintain the perfection and priority of the
Agent's liens on the assets of the Credit Parties as required by Section 7.14
after giving effect to such transaction and (iii) after giving effect to such
transaction, no Default or Event of Default exists, (b) any Credit Party other
than the Borrower may merge or consolidate with any other Credit Party other
than the Borrower provided that (i) the Credit Parties shall cause to be
--------
executed and delivered such documents, instruments and certificates as the Agent
may request in order to maintain the perfection and priority of the Agent's
liens on the assets of the Credit Parties as required by Section 7.14 after
giving effect to such transaction and (ii) after giving effect to such
transaction, no Default or Event of Default exists, (c) any Consolidated Party
which is not a Credit Party may be merged or consolidated with or into any
Credit Party provided that (i) such Credit Party shall be the continuing or
--------
surviving corporation, (ii) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may request
in order to maintain the perfection and priority of the Agent's liens on the
assets of the Credit Parties as required by Section 7.14 after giving effect to
such transaction and (iii) after giving effect to such transaction, no Default
or Event of Default exists, (d) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any other Consolidated Party
which is not a Credit Party provided that, after giving effect to such
--------
transaction, no Default or Event of Default exists and (e) any Consolidated
Party may merge with any Person other than another Consolidated Party in
connection with a Permitted Acquisition if such Consolidated Party shall be the
continuing or surviving corporation.
8.5 Asset Sales.
-----------
The Credit Parties will not permit any Consolidated Party to sell, lease,
transfer or otherwise dispose of, directly or indirectly, any of its assets
other than (a) sales or other dispositions of Equipment Held for Resale in the
ordinary course of business, (b) sales or other dispositions of Rental Equipment
in any calendar month so long as (i) the aggregate Net Cash Proceeds from such
dispositions when combined with all other such dispositions previously made by
all the Consolidated Parties in such calendar month do not exceed 5% of the net
book value of all Rental Equipment of the Credit Parties, (ii) the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in the fiscal year
in which such dispositions were made do not exceed 15% of the net book value of
all Rental Equipment of the Credit Parties and (iii) not more than 25% of the
purchase price paid for such assets is in the form of a promissory note or other
deferred payment instrument, (c) sales or other dispositions of obsolete or worn
equipment by a Credit Party other than the sale or other disposition of
equipment described in clauses (a) or (b) immediately above, (d) sales or other
dispositions of Cash Equivalents, (e) Sale and Leaseback Transactions permitted
pursuant to Section 8.13 hereof and (f) sales or other dispositions for cash and
fair value of real estate assets in any fiscal year so long as the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in such fiscal year
do not exceed $5,000,000.
8.6 Investments.
-----------
77
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 Restricted Payments.
-------------------
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, make a Restricted Payment other than the following Restricted
Payments so long as no Default or Event of Default shall exist immediately prior
to or immediately after the making of any such permitted Restricted Payment:
(a) the payments of dividends from any Consolidated Party to the Borrower or to
another Consolidated Party that is a direct Parent of such Consolidated Party,
(b) the payment of reasonable salaries and bonuses to management by the
Consolidated Parties, (c) repurchases of Capital Stock or options of any Credit
Party held by management of such Credit Party, provided that the aggregate
--------
amount of such repurchases shall not exceed $1,000,000 in cash per fiscal year,
(d) customary and reasonable corporate overhead reimbursements payable by the
Subsidiary Guarantors to the Borrower and (e) payments of the types described in
clauses (vi) and (viii) of the definition of "Permitted Investments".
8.8 Prepayments of Indebtedness, etc.
---------------------------------
The Credit Parties will not permit any Consolidated Party to (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness (including, without limitation,
Subordinated Debt) if such amendment or modification would add or change any
terms in a manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, or (b) make (or give any
notice with respect thereto) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any other
Indebtedness.
8.9 Transactions with Affiliates.
----------------------------
The Credit Parties will not permit any Consolidated Party to enter into any
transaction with, including, without limitation, the purchase, sale or exchange
of property or the rendering of any service to, any Subsidiary or Affiliate of
any Consolidated Party except (a) in the ordinary course of and pursuant to the
reasonable requirements of such Consolidated Party's business and upon fair and
reasonable terms no less favorable to such Consolidated Party than could be
obtained in a comparable arm's-length transaction with an unaffiliated Person,
(b) as permitted under Section 8.1 or Section 8.7 hereof, (c) for intercompany
loans and advances from the Borrower to any Subsidiary Guarantor or from any
Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor and (d)
for intercompany transfers of equipment among Subsidiary Guarantors for the
purpose of meeting customer demand for Rental Equipment, provided that the
--------
Subsidiary Guarantors shall keep adequate internal records of all such
transfers.
78
8.10 Accounting; Organizational Documents; Material Contracts.
--------------------------------------------------------
(i) The Credit Parties will not and will not permit any Consolidated
Party to change its fiscal year or otherwise materially change its accounting
practices (including, without limitation, depreciation methodology as applied by
the Borrower and its Subsidiaries pursuant to the Borrower's Control Bulletin
No. 5, as revised March 31, 1998) without the prior written consent of the
Required Lenders, except for such changes necessary to conform the fiscal year
or the accounting practices of an Acquired Company to that of the Borrower.
(ii) The Credit Parties will not and will not permit any Consolidated
Party to amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational document) or bylaws (or other similar
document) in a manner adverse to the Lenders.
(iii) The Credit Parties will not and will not permit any Consolidated
Party to, without the prior written consent of the Agent, amend, modify, cancel
or terminate or permit the amendment, modification, cancellation or termination
of any of the Material Contracts, except in the event that such amendments,
modifications, cancellations or terminations could not reasonably be expected to
have a Material Adverse Effect.
8.11 Limitation on Restricted Actions.
--------------------------------
The Credit Parties will not permit any Consolidated Party 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) in the case of any Subsidiary Guarantors, pay
dividends or make any other distribution on any of such Person's Capital Stock
other than pursuant to the indenture for the Senior Subordinated Notes, (b) pay
any Indebtedness owed to the Credit Parties, (c) make loans or advances to any
other Credit Party or (d) transfer any of its property to any other Credit
Party, except for encumbrances or restrictions existing under or by reason of
(i) customary non-assignment provisions in any lease governing a leasehold
interest, (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) customary provisions contained in purchase money financing
arrangements permitted by Section 8.1(c) and (iv) this Credit Agreement and the
other Credit Documents.
8.12 Ownership of Subsidiaries.
-------------------------
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Borrower or any Wholly-Owned Subsidiary of the
Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (ii)
permit any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower), (iii) permit, create,
incur, assume or suffer to exist any Lien thereon, in each case except (A) to
qualify directors where required by applicable law
79
or to satisfy other requirements of applicable law with respect to the ownership
of Capital Stock of Foreign Subsidiaries or (B) for Permitted Liens and (iv)
notwithstanding anything to the contrary contained in clause (ii) above, permit
any Subsidiary of the Borrower to issue any shares of preferred Capital Stock.
8.13 Sale Leasebacks.
---------------
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, enter into any Sale and Leaseback Transaction other than any Sale
Leaseback Transaction pursuant to which the consideration paid, when aggregated
with the consideration received from all other Sale and Leaseback Transactions
of the Credit Parties, does not exceed $5,000,000.
8.14 No Further Negative Pledges.
---------------------------
The Credit Parties will not, and will not permit any Consolidated Party to,
create or otherwise cause or suffer to exist or become effective, directly or
indirectly, (i) any prohibition or restriction (including any agreement to
provide equal and ratable security to any other Person in the event a Lien is
granted to or for the benefit of the Agent and the Lenders) on the creation or
existence of any Lien upon the assets of any Consolidated Party, other than
pursuant to the indenture for the Senior Subordinated Notes or pursuant to
documentation relating to purchase money financing arrangements permitted by
Section 8.1(c) or (ii) any Contractual Obligation which may restrict or limit
the Agent's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof after the occurrence of an Event of Default other than standard
and customary subordination, nondisturbance and attornment agreements under or
in connection with leases of Rental Equipment.
SECTION 9
EVENTS OF DEFAULT
-----------------
9.1 Events of Default.
-----------------
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
----------------
(a) Payment. Any Credit Party shall fail to pay (i) any interest or
-------
Fees hereunder within three (3) Business Days of when due hereunder, in
each case whether at stated maturity, by acceleration, or otherwise, (ii)
any principal of the Revolving Loans, the Term Loan or the LOC Obligations
when due, whether at stated maturity, by acceleration or otherwise or (iii)
any expenses hereunder within five (5) Business Days after receipt of
notice by the Credit Parties from the Agent or any applicable Lender that
such expenses are payable; or
80
(b) Representations. Any representation, warranty or statement made
---------------
or deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
---------
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.4, 7.9, 7.11 or 8.1
through 8.14, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b), (c) or (d)
and such default shall continue unremedied for a period of at least 5
Business Days after the earlier of any chairman, president, chief
executive officer, chief financial officer or vice president of a
Credit Party becoming aware of such default or notice thereof by the
Agent; or
(iii) default in the due performance or observance of any other
covenant, contained in this Credit Agreement, the other Credit
Documents (including Hedging Agreements), and in the event such breach
or failure to comply is capable of cure, is not cured within thirty
(30) days of its occurrence;
(d) Other Credit Documents. (i) Any Credit Party shall default in
----------------------
the due performance or observance of any term, covenant or agreement in any
of the other Credit Documents (subject to applicable grace or cure periods,
if any), or (ii) except as a result of or in connection with a merger of a
Subsidiary permitted under Section 8.4, any Credit Document shall fail to
be in full force and effect or to give the Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby, or
any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
----------
merger of a Subsidiary permitted under Section 8.4, the guaranty given by
any Subsidiary Guarantor hereunder (including any Additional Credit Party)
or any provision thereof shall cease to be in full force and effect, or any
Subsidiary Guarantor (including any Additional Credit Party) hereunder or
any Person acting by or on behalf of such Subsidiary Guarantor shall deny
or disaffirm such Subsidiary Guarantor's obligations under such guaranty,
or any Subsidiary Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect
---------------
to any Consolidated Party; or
(g) Defaults under Other Agreements.
-------------------------------
(i) Any Consolidated Party shall default in the performance or
observance (beyond the applicable grace period with respect thereto,
if any) of any Material Contract;
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(ii) With respect to (x) any Subordinated Debt or (y) any other
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $5,000,000 in the aggregate for the
Consolidated Parties taken as a whole, (A) any Consolidated Party
shall (1) default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such Indebtedness,
or (2) the occurrence and continuance of a default in the observance
or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee or
agent on behalf of such holders) to cause (determined without regard
to whether any notice or lapse of time is required), any such
Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior
to the stated maturity thereof; or
(iii) (a) any holder of Subordinated Debt alleges (or any
Governmental Authority with applicable jurisdiction determines) that
the Subordinated Debt is not subordinated to any of the Credit Party
Obligations or (b) the subordination provisions in any agreement
relating to Subordinated Debt shall, in whole or in part, terminate,
cease to be effective or cease to be legally valid, binding and
enforceable as to any holder of the Subordinated Debt; or
(h) Judgments. One or more judgments or decrees shall be entered
---------
against one or more of the Consolidated Parties involving a liability of
$1,000,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged coverage
and has the ability to perform) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event
-----
or condition could have a Material Adverse Effect: (i) 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 Consolidated Party
or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan, which
is, in the reasonable opinion of the Agent, likely to result in (A) the
termination of such Plan for purposes of Title IV of ERISA, or (B) any
Consolidated 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 or (within the meaning of Section
4245 of ERISA) such Plan; or (iv) 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 Consolidated
Party or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA
82
or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability; or
(j) Ownership. There shall occur a Change of Control.
---------
9.2 Acceleration; Remedies.
----------------------
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties, take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments terminated
--------------------------
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
------------
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Credit Parties to the Agent
and/or any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the Credit
---------------
Parties agree that upon receipt of such notice, or upon the occurrence of
an Event of Default under Section 9.1(f), they will immediately pay) to the
Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding
Letters of Credit in an amount equal to the maximum aggregate amount which
may be drawn under all Letters of Credits then outstanding.
(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 Subsidiary Guarantor and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to any Credit Party, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations arising
from drawings under Letters of Credit, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Agent and/or any of the Lenders hereunder automatically shall immediately become
due and payable without the giving of any notice or other action by the Agent or
the Lenders.
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SECTION 10
AGENCY PROVISIONS
-----------------
10.1 Appointment, Powers and Immunities.
----------------------------------
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
10.2 Reliance by Agent.
-----------------
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof.
As to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders; provided,
--------
however, that the Agent shall not be required to take any action that exposes
-------
the Agent to personal liability or that is contrary to any Credit Document or
applicable law or unless it shall first be
84
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
10.3 Defaults.
--------
The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has received written notice
from a Lender or the a Credit Party specifying 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 of the occurrence of a Default or Event of Default,
the Agent shall give prompt notice thereof to the Lenders. The Agent shall
(subject to Section 10.2 hereof) take such action with respect to such Default
or Event of Default as shall reasonably be directed by the Required Lenders,
provided that, unless and until the Agent shall have received such directions,
-------- ----
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interest of the Lenders.
10.4 Rights as a Lender.
------------------
With respect to its Commitment and the Loans made by it, First Union
National Bank (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. First Union National Bank (and
any successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make investments
in, provide services to, and generally engage in any kind of lending, trust, or
other business with any Credit Party or any of its Subsidiaries or Affiliates as
if it were not acting as Agent, and First Union National Bank (and any successor
acting as Agent) and its Affiliates may accept fees and other consideration from
any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.
10.5 Indemnification.
---------------
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including attorneys'
fees), or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any Lender) in any
way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document (including any of the foregoing arising from the negligence of
the Agent); provided that no Lender shall be liable for any of the foregoing to
--------
the extent they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share
85
of any costs or expenses payable by the Credit Parties under Section 11.5, to
the extent that the Agent is not promptly reimbursed for such costs and expenses
by the Credit Parties. The agreements in this Section 10.5 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.6 Non-Reliance on Agent and Other Lenders.
---------------------------------------
Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Credit Documents. Except for notices, reports, and other documents
and information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 Successor Agent.
---------------
The Agent may resign at any time by giving notice thereof to the Lenders
and the Credit Parties. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent with the approval of the Borrower
(so long as no Event of Default has occurred and is continuing), which approval
shall not be unreasonably withheld or delayed. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 10 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
SECTION 11
MISCELLANEOUS
-------------
11.1 Notices.
-------
86
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, in the case of the Credit Parties and the
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
--------
2.1(a), or at such other address as such party may specify by written notice to
------
the other parties hereto:
if to any Credit Party:
National Equipment Services, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Vice President, Secretary
Telephone: (000) 000-0000 (ext. 11)
Telecopy: (000) 000-0000
With a copy to:
Sandford E. Perl, Esq.
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 000-000-0000
if to the Agent:
First Union National Bank
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
87
with a copy to:
First Union National Bank
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx Xxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 Right of Set-Off; Adjustments.
-----------------------------
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such set-
off and application made by such Lender; provided, however, that the failure to
-------- -------
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this Section 11.2 are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender may have.
11.3 Benefit of Agreement.
--------------------
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
--------
transfer any of its interests and obligations without prior written consent
of the Lenders; provided further that the rights of each Lender to
-------- -------
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
-------- -------
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Credit Agreement,
88
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; and
(iii) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the
form of Exhibit 11.3(b) hereto, together with any Note subject to such
---------------
assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
Section 11.3(b), the assignor, the Agent and the Credit Parties shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not a United States person
under Section 7701(a)(30) of the Code, it shall deliver to the Credit
Parties and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the
--------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Credit Parties, 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 Credit Parties or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
-------
11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record the
-------
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under
this Credit Agreement (including all or a portion of its Commitment or its
Loans); provided, however, that (i) such Lender's obligations under this
-------- -------
Credit Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Sections 3.7 through 3.12,
inclusive, and the right of set-off contained in Section 11.2, and
89
(iv) the Credit Parties 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 Credit Parties relating to the Credit Party
Obligations owing to such Lender and to approve any amendment,
modification, or waiver of any provision of this Credit Agreement (other
than amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans or
Notes, extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Notes, or extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Consolidated Parties 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 11.15 hereof.
11.4 No Waiver; Remedies Cumulative.
------------------------------
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Credit Parties 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 Expenses; Indemnification.
-------------------------
(a) The Credit Parties jointly and severally agree to pay on demand all
costs and expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this Credit
Agreement, the other Credit Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent (including the cost of internal counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Credit Documents. The Credit Parties further jointly
and severally agree to pay on demand all costs and expenses of the Agent and the
Lenders, if any (including, without limitation, reasonable attorneys' fees and
expenses and the cost of internal counsel), incurred in connection with any
Default or Event of Default (whether
90
through negotiations, legal proceedings, or otherwise) of the Credit Documents
and the other documents to be delivered hereunder.
(b) The Credit Parties jointly and severally agree to indemnify and hold
harmless the Agent and each Lender and each of their Affiliates and their
respective officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
------------------
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans (including any of the foregoing
arising from the negligence of the Indemnified Party), except to the extent such
claim, damage, loss, liability, cost, or expense is found in a final, non-
appealable judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or willful misconduct. In the case of
an investigation, litigation or other proceeding to which the indemnity in this
Section 11.5 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any of the Credit Parties,
their respective directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The Credit
Parties agree not to assert any claim against the Agent, any Lender, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the Credit
Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 11.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
11.6 Amendments, Waivers and Consents.
--------------------------------
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
-------- -------
(i) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(a) extend the final maturity of any Loan or of any reimbursement
obligation, or any portion thereof, arising from drawings under
Letters of Credit,
91
(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 the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any Default
or Event of Default or mandatory reduction in the Commitments shall
not constitute a change in the terms of any Commitment of any Lender),
(e) release the Borrower or substantially all of the other Credit
Parties from its or their obligations under the Credit Documents,
(f) except as the result of or in connection with an Asset
Disposition permitted by Section 8.5, release all or substantially all
of the Collateral,
(g) amend, modify or waive any provision of this Section 11.6 or
Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(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 or all
or substantially all of the other Credit Parties of any of its or
their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
(ii) without the consent of Lenders holding in the aggregate more than
50% of the outstanding Term Loan, extend the time for or the amount or the
manner of application of proceeds of any mandatory prepayment required by
Sections 3.3(b)(ii) or (iii) hereof;
(iii) without the consent of the Agent, no provision of Section 10
may be amended; and
(iv) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended, and without the consent of the Swingline
Lender, no provision of Section 2.3 may be amended.
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 bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
92
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) Lenders holding at least 75% of the
aggregate Commitments may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
11.7 Counterparts.
------------
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any
of the parties hereto of an executed counterpart of this Credit Agreement shall
be as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof 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 Survival.
--------
All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue; Waiver of Trial by
--------------------------------------------------------------------
Jury.
----
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, 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 NEW YORK. Any
legal action or proceeding with respect to this Credit Agreement or any
other Credit Document may be brought in the courts of the State of North
Carolina in Mecklenburg County or of the United States for the Western
District of North Carolina or of the State of New York or of the United
States for the Southern District of New York, and, by execution and
delivery of this Credit Agreement, each of the Credit Parties hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Credit Parties further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section 11.1,
such service to become effective three (3) days after such mailing.
Nothing herein shall affect the right of the
93
Agent or any Lender to serve process in any other manner permitted by law
or to commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts
referred to in subsection (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS AND
EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
(d) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against any other party hereto 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 herein or therein and hereby waive any right or claim to
punitive or exemplary damages they have now or which may arise in the
future in connection with any action, proceeding or counterclaim arising
out of or relating to this Credit Agreement, any of the other Credit
Documents or the transactions contemplated herein or therein.
11.11 Severability.
------------
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
--------
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein (but excluding the Agent's Commitment Letter and
the Agent's Fee Letters).
11.13 Binding Effect; Termination of this Credit Agreement; Termination of
Existing Credit Agreement.
94
(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 each Credit Party 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 each Credit Party, the Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit shall
be outstanding, all of the Credit Party Obligations have been irrevocably
satisfied in full and all of the Commitments hereunder shall have expired
or been terminated.
(c) The Credit Parties and the Lenders (including the Issuing Lender)
party to the Existing Credit Agreement each hereby agrees that, at such
time as this Credit Agreement shall have become effective pursuant to the
terms of subsection (a) above, (i) the Existing Credit Agreement
automatically shall be deemed amended and restated in its entirety by this
Credit Agreement, (ii) the Commitments under the Existing Credit Agreement
and as defined therein automatically shall be terminated and replaced with
the Commitments hereunder and (iii) all of the promissory notes executed by
the Borrower in connection with the Existing Credit Agreement automatically
shall be canceled and replaced by the Notes.
11.14 Confidentiality.
---------------
The Agent and each Lender (each, a "Lending Party") agrees to keep
-------------
confidential any information furnished or made available to it by the Credit
Parties pursuant to this Credit Agreement that is marked confidential; provided
--------
that nothing herein shall prevent any Lending Party from disclosing such
information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, agent, auditor, attorney or advisor
of any Lending Party or Affiliate of any Lending Party, (b) to any other Person
if it is reasonably necessary for the administration of the credit facility
provided herein, (c) as required by any law, rule, or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand of
any regulatory agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit Agreement,
(g) in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
(i) subject to provisions substantially similar to those contained in this
Section 11.15, to any actual or proposed participant or assignee and (j) to Gold
----
Sheets and other similar bank trade publications (such information to consist of
------
deal terms and other information customarily found in such publications).
11.15 Conflict.
--------
95
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
96
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: NATIONAL EQUIPMENT SERVICES, INC.
--------
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: V.P.
SUBSIDIARY
----------
GUARANTORS:
----------
NES ACQUISITION CORP.
BAT ACQUISITION CORP.
NES EAST ACQUISITION CORP.
NES MICHIGAN ACQUISITION CORP.
ALBANY LADDER COMPANY, INC.
FALCONITE, INC.
FALCONITE EQUIPMENT, INC.
M&M PROPERTIES, INC.
CARL'S MID SOUTH RENT-ALL CENTER
INCORPORATED
FALCONITE REBUILD CENTER, INC.
FALCONITE AVIATION, INC.
XXXXXXX & FALCONITE EQUIPMENT CO.,
INC.
XXXXXXXXXXX CRANE SERVICE, INC.
REBEL STUDIO RENTALS, INC.,
BARRICADE & LIGHT RENTAL, INC.
XXXXX-XXXXXXX EQUIPMENT, LLC
By: Xxxxxxxxxxx Crane Service, Inc.,
its Sole Member
WELLESLEY CRANE SERVICE CO., INC.
XXXXX & ASSOCIATES, INC.,
NES SHORING ACQUISITION, INC.,
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: V.P.
97
PLANK MANAGEMENT, INC.,
a Texas corporation
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: V.P.
THE PLANK COMPANIES, L.P.,
a Delaware limited partnership
By: Plank Management, Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: V.P.
98
RICHLITE, INC.,
a Virginia corporation
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: V.P.
INTERSTATE TRAFFIC CONTROL, INC.,
a West Virginia corporation
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: V.P.
99
LENDERS: FIRST UNION NATIONAL BANK,
-------
individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: V.P.
COMERICA BANK,
as a Lender
By: /s/ Xxxxxxx X. Block
---------------------------
Name: Xxxxxxx X. Block
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ Xxxx Xxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: V.P.
MERCANTILE BUSINESS CREDIT INC.,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
100
TRANSAMERICA BUSINESS CREDIT CORPORATION,
as a Lender
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.,
as a Lender
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank,
as a Lender
By: /s/ Xxxxxx X. Xxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Assistant Vice President
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President & Manager
COMPASS BANK,
as a Lender
By: /s/ Xxxxxxx X. May
-------------------------------
Name: Xxxxxxx X. May
Title: Assistant Vice President
FLEET NATIONAL BANK,
as a Lender
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
BANKERS TRUST COMPANY,
as a Lender
By: /s/ Xxxx Xx Xxxxx
-------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
LASALLE BANK N.A.
as a Lender
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: S.V.P.
CITICORP DEL-LEASE, INC.,
as a Lender
By: /s/ Xxxxxx Xxxxxxxx, Xx.
-------------------------------
Name: Xxxxxx Xxxxxxxx, Xx.
Title: Vice President
KEY CORPORATE CAPITAL INC.,
as a Lender
By: /s/ Xxx X. XxXxxxxx
-------------------------------
Name: Xxx X. XxXxxxxx
Title: Vice President
THE PROVIDENT BANK,
as a Lender
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Vice President
WACHOVIA BANK, N.A.,
as a Lender
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
Title: Assistant Vice President
XXXXXX TRUST AND SAVINGS BANK,
as a Lender
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
CITIZENS BUSINESS CREDIT CORPORATION,
a Division of Citizens Leasing Island Corporation,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: SVP
ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG,
as a Lender
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: First Vice President
THE FUJI BANK, LIMITED,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President & Group Head
NATIONAL CITY BANK,
as a Lender
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Duly Authorized Signatory
SUNTRUST BANK, ATLANTA,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
REGIONS BANK,
as a Lender
By: /s/ Xxx Xxxxxxx
-------------------------------
Name: Xxx Xxxxxxx
Title: V.P.
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as a Lender
By: /s/ Xxxxxxx X. XxxXxxxxxx
-------------------------------
Name: Xxxxxxx X. XxxXxxxxxx
Title: Vice President
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES,
as a Lender
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
ALLFIRST BANK,
as a Lender
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
DIME COMMERCIAL CORP.,
as a Lender
By: /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: VP
SOVEREIGN BANK,
as a Lender
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: V.P.
