Exhibit 10.1
CREDIT AGREEMENT
Dated as of February 13, 1998
among
CORT FURNITURE RENTAL CORPORATION,
as Borrower,
CORT BUSINESS SERVICES CORPORATION
and
CERTAIN SUBSIDIARIES OF THE BORROWER FROM TIME TO TIME
PARTIES HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
AND
NATIONSBANK, N.A.,
as Agent
TABLE OF CONTENTS
SECTION 1
DEFINITIONS................................................................. 1
1.1 Definitions......................................................... 1
1.2 Other Definitional Provisions....................................... 23
1.3 Accounting Terms and Determinations................................. 23
SECTION 2
CREDIT FACILITIES........................................................... 24
2.1 Revolving Loans..................................................... 24
2.2 Letter of Credit Subfacility........................................ 27
2.3 Swingline Loan Subfacility.......................................... 30
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES.............................. 32
3.1 Default Rate........................................................ 32
3.2 Extension and Conversion............................................ 33
3.3 Reductions in Commitments and Prepayments........................... 33
3.4 Fees................................................................ 35
3.5 Capital Adequacy.................................................... 35
3.6 Inability To Determine Interest Rate................................ 36
3.7 Illegality.......................................................... 36
3.8 Requirements of Law................................................. 37
3.9 Taxes............................................................... 38
3.10 Indemnity........................................................... 41
3.11 Pro Rata Treatment.................................................. 41
3.12 Sharing of Payments................................................. 42
3.13 Place and Manner of Payments........................................ 43
3.14 Indemnification; Nature of Issuing Lender's Duties.................. 44
SECTION 4
GUARANTY.................................................................... 44
4.1 The Guaranty........................................................ 44
4.2 Obligations Unconditional........................................... 45
4.3 Reinstatement....................................................... 46
4.4 Certain Additional Waivers.......................................... 46
4.5 Remedies............................................................ 46
4.6 Continuing Guarantee................................................ 47
SECTION 5
CONDITIONS.................................................................. 47
5.1 Conditions to Closing Date.......................................... 47
5.2 Conditions to All Extensions of Credit.............................. 49
SECTION 6
REPRESENTATIONS AND WARRANTIES.............................................. 50
6.1 Financial Condition................................................. 50
6.2 No Change........................................................... 51
6.3 Corporate Existence; Compliance with Law............................ 51
6.4 Corporate Power; Authorization; Enforceable Obligations............. 51
6.5 No Legal Bar; No Default............................................ 52
6.6 No Material Litigation.............................................. 52
6.7 Investment Company Act.............................................. 52
6.8 Federal Regulations................................................. 52
6.9 ERISA............................................................... 53
6.10 Environmental Matters............................................... 53
6.11 Use of Proceeds..................................................... 54
6.12 Subsidiaries........................................................ 54
6.13 Taxes............................................................... 55
6.14 Solvency............................................................ 55
SECTION 7
AFFIRMATIVE COVENANTS....................................................... 55
7.1 Financial Statements................................................ 55
7.2 Certificates; Other Information..................................... 56
7.3 Payment of Loans.................................................... 57
7.4 Conduct of Business and Maintenance of Existence.................... 57
7.5 Maintenance of Property; Insurance.................................. 58
7.6 Inspection of Property; Books and Records; Discussions.............. 58
7.7 Notices............................................................. 58
7.8 Environmental Laws.................................................. 59
7.9 Financial Covenants................................................. 60
7.10 Additional Subsidiary Guarantors.................................... 60
SECTION 8
NEGATIVE COVENANTS.......................................................... 61
8.1 Indebtedness........................................................ 61
8.2 Liens............................................................... 62
8.3 Nature of Business.................................................. 62
8.4 Consolidation, Merger, Sale or Purchase of Assets................... 62
8.5 Advances, Investments and Loans..................................... 64
8.6 Transactions with Affiliates........................................ 64
8.7 Ownership of Subsidiaries........................................... 64
8.8 Fiscal Year......................................................... 64
8.9 Prepayments of Indebtedness, etc.................................... 64
8.10 Dividends........................................................... 65
SECTION 9
EVENTS OF DEFAULT........................................................... 66
9.1 Events of Default................................................... 66
SECTION 10
AGENCY PROVISIONS........................................................... 69
10.1 Appointment......................................................... 69
10.2 Delegation of Duties................................................ 70
10.3 Exculpatory Provisions.............................................. 70
10.4 Reliance on Communications.......................................... 70
10.5 Notice of Default................................................... 71
10.6 Non-Reliance on Agent and Other Lenders............................. 71
10.7 Indemnification..................................................... 72
10.8 Agent in its Individual Capacity.................................... 72
10.9 Successor Agent..................................................... 72
10.10 Termination of Securities Interests................................. 73
SECTION 11
MISCELLANEOUS............................................................... 73
11.1 Amendments and Waivers.............................................. 73
11.2 Notices............................................................. 74
11.3 No Waiver; Cumulative Remedies...................................... 75
11.4 Survival of Representations and Warranties.......................... 75
11.5 Payment of Expenses and Taxes....................................... 75
11.6 Successors and Assigns; Participations; Purchasing Lenders.......... 76
11.7 Adjustments; Set-off................................................ 79
11.8 Table of Contents and Section Headings.............................. 80
11.9 Counterparts........................................................ 80
11.10 Severability........................................................ 80
11.11 Integration......................................................... 81
11.12 Governing Law....................................................... 81
11.13 Consent to Jurisdiction and Service of Process...................... 81
11.14 Confidentiality..................................................... 82
11.15 Acknowledgments..................................................... 82
11.16 Waivers of Jury Trial............................................... 82
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of February 13, 1998 (the "Credit
Agreement"), is by and among CORT FURNITURE RENTAL CORPORATION, a Delaware
corporation (the "Borrower"), CORT BUSINESS SERVICES CORPORATION, a Delaware
corporation (the "Company") and those Subsidiaries of the Borrower identified as
a "Guarantor" on the signature pages hereto and such other Subsidiaries as may
from time to time become a party hereto (together with the Company, the
"Guarantors"), the several lenders identified on the signature pages hereto and
such other lenders as may from time to time become a party hereto (the
"Lenders"), and NATIONSBANK, N.A., as agent for the Lenders (in such capacity,
the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders provide a $75,000,000
credit facility (with the possibility of expansion to $150,000,000) 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
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Additional Credit Party" means each Person that becomes a Guarantor
after the Closing Date by execution of a Joinder Agreement in accordance
with Section 7.10.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the equity interest in such
Person; provided, however, that for purposes hereof, none of Citibank,
N.A., Citicorp Venture Capital, Ltd. or their respective subsidiaries or
portfolio companies shall be considered to be an "Affiliate" of the Company
or the Borrower, except for purposes of the definition of "Permitted
Investments" herein and Section 8.6. For purposes of this definition,
"control" when used with respect to any Person means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
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"Agent" means NationsBank, N.A. and any successors and assigns in such
capacity.
"Agent's Fee Letter" means the letter agreement dated as of November
10, 1997 among NationsBank, N.A., NationsBanc Xxxxxxxxxx Securities, Inc.
and the Borrower as amended, modified, supplemented or replaced from time
to time.
"Agent's Fees" means such term as defined in Section 3.4(c).
"Aggregate Revolving Committed Amount" means the aggregate amount of
all of the Revolving Commitments in effect from time to time.
"Applicable Percentage" means, for any day, the rate per annum set
forth below opposite the applicable Pricing Level then in effect it being
understood that the Applicable Percentage for (i) Eurodollar Loans shall be
the percentage set forth under the column "Applicable Percentage for
Eurodollar Loans and Letter of Credit Fee", (ii) the Letter of Credit Fee
shall be the percentage set forth under the column "Applicable Percentage
for Eurodollar Loans and Letter of Credit Fee", and (iii) the Commitment
Fee shall be the percentage set forth under the column "Applicable
Percentage for Commitment Fee":
Applicable Percentage Applicable
Consolidated for Percentage
Pricing Funded Eurodollar Loan and for
Level Debt Ratio Letter of Credit Fee Commitment Fee
------- ------------ --------------------- --------------
V greater than 2.5 1.250% 0.300%
IV less than or equal to 2.5
but greater than 2.0 1.125% 0.250%
III less than or equal to 2.0
but greater than 1.5 1.000% 0.250%
II less than or equal to 1.5
but greater than 1.0 0.875% 0.250%
I less than or equal to 1.0 0.75% 0.200%
The Applicable Percentage shall, in each case, be determined quarterly by
the Agent as soon as practicable (but in any event within 5 days) after
delivery of the quarterly financial information required by Section 7.1
together with information relating to historical information on
Consolidated EBITDA for Persons or Assets acquired during the period of
four consecutive quarters ending as of the date of determination, provided
that the date of determination shall not be later than the date 5 days
after the date by which such quarterly financial information is required to
be delivered in accordance with Section 7.1 (each an "Interest
Determination Date") based on the information contained in such quarterly
financial information. Such Applicable Percentage shall be effective from
such Interest Determination Date until the next such Interest Determination
Date. The Agent shall determine the appropriate Pricing Level promptly upon
its receipt of the
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quarterly financial information and notify the Borrower and the Lenders of
any change thereof. Such determinations by the Agent shall be conclusive
absent manifest error. The initial Applicable Percentages shall be based on
Pricing Level III until the first Interest Determination Date to occur in
connection with the quarterly financial information relating to the first
fiscal quarter of 1998.
"Asset Disposition" means (i) the sale, lease or other disposition of
any property or asset by any Credit Party, other than Specified Sales and
other than to the extent permitted by Section 8.5, and (ii) receipt by any
Credit Party of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or similar
event with respect to any of their property or assets.
"Base Rate" means, for any day, the rate per annum equal to the Prime
Rate in effect on such day less 1/2 of 1%. Any change in the Base Rate due
to a change in the Prime Rate shall be effective on the effective date of
such change in the Prime 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,
together with any successors and permitted assigns.
"Borrowing Date" means in respect of any Loan, the date such Loan is
made.
"Business" means such term as defined in Section 6.10(b).
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or Fairfax, Virginia
are authorized or required by law to close, except that, when used in
connection with a rate determination, borrowing or payment in respect of a
Eurodollar Loan, such day shall also be a day on which dealings between
banks are carried on in U.S. dollar deposits in London, England.
"Capital Expenditures" means all expenditures (other than those which
are permitted by Section 8.4) which in accordance with GAAP would be
classified as capital expenditures, including without limitation, Capital
Lease Obligations, but excluding, in any event, expenditures made to
purchase or acquire furniture or equipment to be sold or leased in the
normal course of business.
"Capital Lease" means any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
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"Capital Lease Obligations" means the capital lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
dollar denominated time 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
maturities of not more than 365 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including any of the
Lenders) or recognized securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully guaranteed
by the United States of America in which there shall be a perfected first
priority security interest (subject to no other Liens) and having, on the
date of purchase thereof, a fair market value of at least 100% of the
amount of the repurchase obligations, (e) obligations of any State of the
United States or any political subdivision thereof, the interest with
respect to which is exempt from federal income taxation under Section 103
of the Code, having a long term rating of at least Aa-3 or AA- by Moody's
or S&P, respectively, (f) Investments in municipal auction preferred stock
(i) rated AAA (or the equivalent thereof) or better by S&P or Aaa (or the
equivalent thereof) or better by Moody's and (ii) with dividends that reset
at least once every 365 days and (g) investments, classified in accordance
with GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$100,000,000 and the portfolios of which are limited to investments of the
character described in the foregoing subdivisions (a) through (f).
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" means the Revolving Commitment, the LOC Commitment and
the Swingline Commitment, individually or collectively, as appropriate.
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"Commitment Fee" means such term as defined in Section 3.4(a).
"Commitment Percentage" means the Revolving Commitment Percentage or
the LOC Commitment Percentage, as appropriate.
"Commitment Period" means the period from and including the Closing
Date to but not including the Termination Date.
"Commitment Transfer Supplement" means a Commitment Transfer
Supplement, substantially in the form of Schedule 11.6(c).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Company and which is treated as a single employer under Section 414 of the
Code.
"Company" means the Person identified as such in the heading hereof,
together with any successors and permitted assigns.
"Consolidated EBIT" means for any period, the sum of Consolidated Net
Income plus Consolidated Interest Expense plus all provisions for any
Federal, state and other income taxes for the Borrower and its Subsidiaries
on a consolidated basis, determined in each case in accordance with GAAP
applied on a consistent basis. Except as expressly provided otherwise, the
applicable period shall be for the four consecutive quarters ending as of
the date of determination.
"Consolidated EBITDA" means for any period, (i) the sum of
Consolidated EBIT plus depreciation, amortization and other non-cash
charges (exclusive of depreciation and amortization relating to furniture
or equipment held for sale or lease in the normal course of business) for
the Borrower and its Subsidiaries on a consolidated basis, and (ii) to the
extent not included in (i), then the sum of Consolidated EBIT plus
depreciation, amortization and other non-cash charges (exclusive of
depreciation and amortization relating to furniture or equipment held for
sale or lease in the normal course of business) for Persons or assets
acquired pursuant to Sections 8.4(a) or (c) hereof (net of any such items
relating to dispositions made pursuant to Section 8.4(b) hereof),
determined in each case in accordance with GAAP applied on a consistent
basis. Except as expressly provided otherwise, the applicable period shall
be for the four consecutive quarters ending as of the date of
determination.
"Consolidated Funded Debt" means Funded Debt of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with GAAP
applied on a consistent basis.
5
"Consolidated Funded Debt Ratio" means, as of the last day of any
fiscal quarter, the ratio of Consolidated Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of such day.
"Consolidated Group" means the Company and its Subsidiaries.
"Consolidated Interest Expense" means for any period, all interest
expense, including the amortization of debt discount and premium the
amortization of deferred financing fees and the interest component under
Capital Leases for the Borrower and its Subsidiaries on a consolidated
basis determined in accordance with GAAP applied on a consistent basis.
Except as expressly provided otherwise, the applicable period shall be for
the four consecutive quarters ending as of the date of computation.
"Consolidated Net Income" means for any period, the net income of the
Borrower and its Subsidiaries on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for
purposes of determining the Consolidated Funded Debt Ratio and the Fixed
Charge Coverage Ratio any extraordinary gains or losses (including but not
limited to extraordinary losses relating to the redemption of the 12%
Senior Notes due 2000) and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses. Except as
expressly provided otherwise, the applicable period shall be for the four
consecutive quarters ending as of the date of computation.
"Consolidated Net Worth" means total stockholders' equity of the
Borrower and its Subsidiaries on a consolidated basis as determined in
accordance with GAAP applied on a consistent basis.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents" means this Credit Agreement, the Notes, any Joinder
Agreement, the Agent's Fee Letter, and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"Credit Party" means any of the Borrower, the Company and the other
Guarantors.
6
"Credit Party Obligations" means, without duplication, all of the
obligations of the Borrower and the other Credit Parties to the Lenders and
the Agent (including the obligations to pay principal of and interest on
the Loans, to pay all Fees, to pay certain expenses and the obligations
arising in connection with various indemnities) whenever arising, under
this Credit Agreement, the Notes or any other of the Credit Documents to
which the Borrower or any other Credit Party is a party.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means at any time, any Lender that, at such time
(a) has failed to make a Loan or advance required pursuant to the terms of
this Credit Agreement, including the funding of a Participation Interest in
accordance with the terms hereof, (b) has failed to pay to the Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"Dividend" means any payment by the Borrower or any of its non-wholly
owned Subsidiaries of a payment, distribution or dividend (other than a
dividend or distribution payable solely in stock of the Person making such
payment, distribution or dividend) on, or any payment on account of the
purchase, redemption or retirement of, or any other distribution, any
shares of any class of stock or other ownership interest in the Borrower or
any of its Subsidiaries (including any such payment or distribution in cash
or in property or obligations of the Company or any of its Subsidiaries).
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Lending Office" means the office or branch of the Lender
identified on Schedule 11.2, or such other office or branch as the Lender
may identify by written notice to the Borrower and the Agent.
"Domestic Subsidiary" means a Subsidiary which is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Eligible Transferee" means and includes a commercial bank, financial
institution or other "accredited investor" (as defined in Regulation D of
the Securities Act of 1933, as amended).
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"Environmental Laws" means any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or
other Requirement of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time be in effect during
the term of this Credit Agreement.
"Equity Transaction" means, with respect to any Credit Party, any
issuance of shares of its capital stock or other equity interest, other
than an issuance (i) to a member of the Consolidated Group, (ii) in
connection with a conversion of debt securities to equity, (iii) in
connection with exercise by a present or former employee, officer or
director under a stock incentive plan, stock option plan or other
equity-based compensation plan or arrangement or (iv) in connection with an
acquisition in compliance with Section 8.4(c).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"Eurodollar Lending Office" means the office or branch of the Lender
identified on Schedule 11.2, or such other office or branch as the Lender
may identify by written notice to the Borrower and the Agent.
"Eurodollar Loan" means any Loan bearing interest at a rate determined
by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Interbank Offered Rate
Eurodollar Rate = ----------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference to which the interest rate
of Eurodollar Loans is determined), whether or not Lender has any
Eurocurrency liabilities subject to such reserve requirement at that time.
8
Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage. The parties hereto acknowledge and agree
that, as of the Closing Date, the Eurodollar Reserve Percentage is zero
(0).
"Event of Default" means such term as defined in Section 9.
"Existing Letters of Credit" means those Letters of Credit outstanding
on the Closing Date and identified on Schedule 2.2(a) .
"Extension of Credit" means, as to any Lender, the making of a Loan by
such Lender or the issuance or extension of, or participation in, a Letter
of Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate of interest per
annum (rounded upwards, if necessary, to the nearest whole multiple of
1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day,
provided that (A) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day and (B) if no such rate is so published on such next preceding
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to the Agent on such day on such transactions as determined by the
Agent.
"Fee" means any fee payable pursuant to Section 3.4.
"Fixed Charge Coverage Ratio" means, with respect to the Borrower and
its Subsidiaries on a consolidated basis, the ratio of (a) the total of (i)
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of the date of computation less (ii) Capital Expenditures not
relating to furniture and equipment held for lease or sale in the normal
course of business for a period of four consecutive fiscal quarters ending
as of the date of computation, to (b) the sum of (i) Consolidated Interest
Expense for the period of four consecutive fiscal quarters ending as of the
date of computation plus (ii) current maturities of Funded Debt (other than
the Revolving Loans) for the period of four consecutive fiscal quarters
beginning as of the day after the date of computation plus (iii) Dividends
paid or distributed during the period of four consecutive fiscal quarters
ending as of the date of computation. For purposes of determining the Fixed
Charge Coverage Ratio, Dividends shall not include (a) cash dividends of up
to
9
$1,000,000 to the Company for the purpose of repurchasing the Company's
equity securities in any fiscal year pursuant to the Company's employee
benefit plans and (b) cash dividends of up to $2,500,000 to the Company for
the sole purpose of providing loans to officers, directors, employees or
Affiliates to pay, on behalf of such persons, any withholding taxes due and
payable by such persons as a result of the vesting of securities received
by such persons in connection with the exchange of certain debentures at
the time of the Company's initial public offering.
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
Subsidiary.
"Funded Debt" means, for any Person, (i) all Indebtedness of such
Person for borrowed money (including without limitation, indebtedness
evidenced by promissory notes, bonds, debentures and similar instruments
and further any portion of the purchase price for assets or acquisitions
permitted hereunder which may be financed by the seller and Guarantee
Obligations by such Person of Funded Debt of Other Persons), (ii) all
purchase money Indebtedness of such Person, (iii) the principal portion of
Capital Lease Obligations, (iv) the maximum amount available to be drawn
under standby letters of credit and bankers' acceptances issued or created
for the account of such Person, (v) all preferred stock issued by such
Person and required by the terms thereto to be redeemed, or for which
mandatory sinking fund payments are due, by a fixed date, and (vi) the
aggregate amount of uncollected accounts receivable relating to a
structured financing program whereby such Person sells or securitizes its
receivable balances or portions thereof through the issuance of securities,
regardless of whether such transaction is made without recourse to such
Person or in a manner which would not be reflected on the balance sheet of
such Person in accordance with GAAP. For purposes hereof, Funded Debt shall
not include Subordinated Debt or intercompany Indebtedness owing by a
Credit Party to another Credit Party.
"GAAP" means generally accepted accounting principles in effect in the
United States of America applied on a consistent basis, subject, however,
in the case of determination of compliance with the financial covenants set
out in Section 7.9 to the provisions of Section 1.3.
"Government Acts" means such term as defined in Section 3.14.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by such Person in
good faith.
"Guarantor" means the Company and those Subsidiaries of the Borrower
identified as a "Guarantor" on the signature pages hereto, and each
Additional Credit Party which has executed a Joinder Agreement, together
with their successors and permitted assigns.
"Guaranty" means the guaranty of the Guarantors set forth in Section
4.
"Indebtedness" means, of any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices or other items incurred for the purchase of products and services
utilized in the ordinary course of business), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Capital Leases, (d)
all obligations of such Person in respect of acceptances issued or created
for the account of such Person,
11
(e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable
for the payment thereof, (f) 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), (g) all obligations of such Person under take-or-pay
or similar arrangements or under commodities agreements, (h) all Guarantee
Obligations of such Person, (i) all obligations of such Person in respect
of interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements, (j) the maximum amount
of all letters of credit issued or bankers' acceptances created for the
account of such Person and, without duplication, all drafts drawn
thereunder (to the extent not theretofore reimbursed), (k) all preferred
stock issued by such Person and required by the terms thereto to be
redeemed, or for which mandatory sinking fund payments are due, by a fixed
date and (l) other obligations in the nature of Funded Debt or Guarantee
Obligations which would be shown as a liability on the balance sheet of
such Person (other than those which relate to obligations regularly
incurred in the ordinary course of business) and (m) the aggregate amount
of uncollected accounts receivable relating to a structured financing
program whereby such Person sells or securitizes its receivable balances or
portions thereof through the issuance of securities, regardless of whether
such transaction is made without recourse to such Person or in a manner
which would not be reflected on the balance sheet of such Person in
accordance with GAAP; but specifically excluding from the foregoing (A)
trade payables and accrued expenses arising or incurred in the ordinary
course of business, and (B) obligations in respect of judgments or awards
that have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of which
any of the Credit Parties shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such an appeal or review. For
purposes hereof, Indebtedness shall include Indebtedness of any partnership
in which such Person is a general partner (except for any such Indebtedness
with respect to which the holder is limited to the assets of such
partnership or joint venture).
"Insolvency" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as
used in Section 4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
12
"Interbank Offered Rate" means, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the average (rounded upward to
the nearest one-sixteenth (1/16) of one percent) per annum rate of interest
determined by the office of the Agent (each such determination to be
conclusive and binding) as of two Business Days prior to the first day of
such Interest Period, as the effective rate at which deposits in
immediately available funds in U.S. dollars are being, have been, or would
be offered or quoted by the Agent to major banks in the applicable
interbank market for Eurodollar deposits at any time during the Business
Day which is the second Business Day immediately preceding the first day of
such Interest Period, for a term comparable to such Interest Period and in
the amount of the requested Eurodollar Loan. If no such offers or quotes
are generally available for such amount, then the Agent shall be entitled
to determine the Eurodollar Rate by estimating in its reasonable judgment
the per annum rate (as described above) that would be applicable if such
quote or offers were generally available.
"Interest Payment Date" means (a) as to any Base Rate Loan, the last
day of each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Swingline Loan, the last day of each March,
June, September and December, or such other day as may be mutually agreed
upon by the Borrower and the Swingline Lender, but not less frequently than
once a quarter, (c) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (d) as to
any Eurodollar Loan having an Interest Period longer than three months,
each day which is three months after the first day of such Interest Period
and the last day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in the notice of borrowing or notice of conversion
given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Agent not less than three
(3) Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
13
(B) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided above,
the Borrower shall be deemed to have selected a Base Rate Loan to
replace the affected Eurodollar Loan;
(D) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(E) no more than ten (10) Eurodollar Loans may be in effect at
any time. For purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans,
even if they shall begin on the same date and have the same duration,
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.
"Issuing Lender" means as to the Existing Letters of Credit, the
Issuing Lenders identified on Schedule 2.2(a), and as to Letters of Credit
issued after the Closing Date, NationsBank.
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Schedule 7.10, executed and delivered by an Additional Credit Party
in accordance with the provisions of Section 7.10.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and each Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit" means the Existing Letters of Credit and any letter
of credit issued by an Issuing Lender pursuant to the terms hereof, as such
Letter of Credit may be amended, modified, extended, renewed or replaced
from time to time.
"Letter of Credit Fee" means such term as defined in Section 3.4(b).
14
"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).
"Loan" means a Revolving Loan and/or a Swingline Loan, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to
such Lender's LOC Committed Amount as specified in Schedule 2.1(a), as such
amount may be reduced from time to time in accordance with the provisions
hereof.
"LOC Commitment Percentage" means, for each Lender, the percentage
identified as its LOC 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 11.6(c).
"LOC Committed Amount" means, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in
Letters of Credit as referenced in Section 2.2 and, individually, the
amount of each Lender's LOC Commitment as specified in Schedule 2.1(a).
"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.
"Mandatory Borrowing" means such term as defined in Section 2.2(e) or
Section 2.3(b)(ii).
15
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, financial condition or prospects of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower, the Company or the other Credit Parties to perform their
obligations, when such obligations are required to be performed, under this
Credit Agreement or any of the Notes or (c) the validity or enforceability
of this Credit Agreement, any of the Notes or any of the other Credit
Documents or the rights or remedies of the Agent or the Lenders hereunder
or thereunder.
"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 Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Proceeds" means gross cash proceeds (including any cash received
by way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received) received in connection with an
Asset Disposition or Equity Transaction, net of (i) reasonable transaction
costs, including in the case of an Equity Transaction, underwriting
discounts and commissions and in the case of an Asset Disposition occurring
in connection with a claim under an insurance policy, costs incurred in
connection with adjustment and settlement of the claim, (ii) estimated
taxes payable in connection therewith, and (iii) any amounts payable in
respect of Funded Debt, including without limitation principal, interest,
premiums and penalties, in connection therewith to the extent that such
Funded Debt and any payments in respect thereof are paid with a portion of
the proceeds therefrom.
"Non-Excluded Taxes" means such term as is defined in Section 3.9.
"Non-Investment Grade" means (i) debt which is not rated by S&P or
Moody's or has a rating of less than "BBB-" by S&P or "Baa3" by Moody's and
(ii) equity interests.
"Note" or "Notes" means the Revolving Notes collectively, separately
or individually, as appropriate.
16
"Notice of Borrowing" means the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.3(b)(i), as appropriate.
"Notice of Extension/Conversion" means the written notice of extension
or conversion as referenced and defined in Section 3.2.
"Obligations" means, collectively, Loans and LOC Obligations.
"Participants" means such term as defined in Section 11.6.
"Participation Interest" means the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.2 or
in Swingline Loans as provided in Section 2.2(b)(ii).
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, and any successor thereto.
"Permitted Investments" means (i) cash and Cash Equivalents, (ii)
receivables owing to the Company or any of its Subsidiaries or any
receivables and advances to suppliers, in each case if created, acquired or
made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (iii) investments in and to a
domestic Credit Party other than the Company, (iv) investments in and to a
Foreign Subsidiary in an aggregate amount not to exceed $5,000,0000, (v)
loans (other than (a) relocation loans to officers and employees made in
the ordinary course of business in an aggregate amount not to exceed
$2,000,000 at any time outstanding and (b) loans made to officers,
directors, employees or Affiliates, in an aggregate amount not to exceed
$2,500,000, to pay, on behalf of such persons, any withholding taxes due
and payable by such persons as a result of the vesting of securities
received by such persons in connection with the exchange of certain
debentures at the time of the Company's initial public offering) and
advances to officers, directors, employees and Affiliates in an aggregate
amount not to exceed $1,000,000 at any time outstanding, (vi) investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business, (vii) investments, acquisitions or
transactions permitted under Section 8.4(c)(ii), (viii) investments
received in connection with a merger or disposition permitted by Sections
8.4(a) and 8.4(b), (ix) purchase or redemption of equity securities of the
Borrower to the extent permitted by Section 8.10, (x) investments in and
loans to entities engaged in the apartment locator business or other
businesses related to the business of the Borrower and its Subsidiaries in
an aggregate amount not to exceed $10,000,000 at any time outstanding, and
(xi) additional loan advances and/or investments of a nature not
17
contemplated by the foregoing clauses hereof, provided that such loans,
advances and/or investments made pursuant to this clause (xi) shall not
exceed an aggregate amount of $5,000,000. As used herein, "investment"
means all investments, in cash or by delivery of property made, directly or
indirectly in, to or from any Person, whether by acquisition of shares of
capital stock, property, assets, indebtedness or other obligations or
securities or by loan advance, capital contribution or otherwise.
"Permitted Liens" means
(iii) Liens created by or otherwise existing, under or in
connection with this Credit Agreement or the other Credit Documents in
favor of the Lenders;
(iv) Liens in favor of a Lender hereunder as the provider of
interest rate protection relating to the Loans hereunder, but only (A)
to the extent such Liens secure obligations under such interest rate
protection agreements permitted under Section 8.1, (B) to the extent
such Liens are on the same collateral as to which the Lenders also
have a Lien and (C) if such provider and the Lenders shall share pari
passu in the collateral subject to such Liens;
(v) purchase money Liens securing purchase money indebtedness
(and refinancings thereof) to the extent permitted under Section
8.1(c);
(vi) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to exceed
60 days), if any, related thereto has not expired or which are being
contested in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the books of
the Company or its Subsidiaries, as the case may be, in conformity
with GAAP (or, in the case of Subsidiaries with significant operations
outside of the United States of America, generally accepted accounting
principles in effect from time to time in their respective
jurisdictions of incorporation);
(vii) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(viii) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements;
18
(ix) deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(x) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses; provided that such
extension, renewal or replacement Lien shall be limited to all or a
part of the property which secured the Lien so extended, renewed or
replaced (plus improvements on such property);
(xi) liens on properties in respect of judgment or award, the
Indebtedness with respect to which is in respect of judgments or
awards that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in
respect of which any of the Credit Parties shall at the time in good
faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending
such an appeal or review and is permitted under the Credit Agreement;
and
(xii) encumbrances on real property consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which a Credit Party is a
party, and other minor liens or encumbrances none of which materially
interferes with the use or value of the property affected in the
ordinary course of business.
"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 at any particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest established from
time to time by the Agent at its principal office in Charlotte, North
Carolina as its Prime Rate. Any change in the interest rate resulting from
a change in the Prime Rate shall become effective as of 12:01 a.m. of the
Business Day on which each change in the Prime Rate is
19
announced by the Agent. The Prime Rate is a reference rate used by the
Agent in determining interest rates on certain loans and is not intended to
be the lowest rate of interest charged on any extension of credit to any
debtor.
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four-fiscal quarter period ending as of the end of the fiscal quarter most
recently ended prior to the date of such transaction with respect to which
the Agent has received the financial information required under Section
7.1. As used herein, "transaction" means any merger, consolidation or
acquisition as referenced in Sections 8.4(a) and (c) and any Dividend as
referred in Section 8.10.
"Properties" means such term as defined in subsection 6.10(a).
"Purchasing Lender" means such term as defined in Section 11.6(c).
"Register" means such term as defined in Section 11.6(d).
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty-day notice
period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC
Reg. 2615.
"Required Lenders" means Lenders holding more than fifty percent (50%)
of the Revolving Commitments, or if the Revolving Commitments have been
terminated, more than fifty percent (50%) of the Obligations then
outstanding (taking into account in the case of LOC Obligations and
Swingline Loans, and Participation Interests therein); provided, however,
that if any Lender shall be a Defaulting Lender at such time, then there
shall be excluded from the determination of Required Lenders the
Commitments of, and after termination of the Commitments, the Obligations
(including Participation Interests therein) owing to, such Defaulting
Lender.
"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.
20
"Responsible Officer" means the President, Chief Executive Officer,
Chief Financial Officer, the Controller, any Vice President, the Treasurer
or any Assistant Treasurer or other duly authorized officer.
"Revolving Commitment" means with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed
Amount as specified in Schedule 2.1(a), as such amount may be increased or
reduced from time to time in accordance with the provisions hereof.
"Revolving Commitment Percentage" means for each 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 11.6(c).
"Revolving Committed Amount" means collectively, the aggregate amount
of all of the Revolving Commitments as referenced in Section 2.1(a) and,
individually, the amount of each Lender's Revolving Commitment as specified
in Schedule 2.1(a).
"Revolving Loans" means as defined in Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving Loans
and Swingline Loans in substantially the form attached as Schedule 2.1(f),
individually or collectively, as appropriate, as such promissory notes may
be amended, modified, supplemented, extended, renewed or replaced from time
to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Single Employer Plan" means any Plan which is not a Multi-Employer
Plan.
"Solvent" means, with respect to any Credit Party as of a particular
date, that on such date (i) such Credit Party 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 Credit Party does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Credit Party's ability to pay as
such debts and liabilities mature in their ordinary course, (iii) such
Credit Party is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which such Credit
Party's property would constitute unreasonably small capital after
21
giving due consideration to the prevailing practice in the industry in
which such Credit Party is engaged or is to engage, (vi) the fair value of
the property of such Credit Party is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Credit Party and (v) the present fair saleable value of the assets of such
Credit Party is not less than the amount that will be required to pay the
probable liability of such Credit Party 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.
"Specified Sales" means (i) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business,
and (ii) the sale, transfer, lease, sub-lease or other disposition of
machinery, parts, equipment, real property and other assets no longer
useful in the conduct of the business of the Company or any of its
Subsidiaries, as appropriate, (iii) sale, transfer, lease or other
disposition from one Credit Party to another Credit Party and (iv) the
sale, transfer or other disposition of Permitted Investments.
"Subordinated Debt" means such term as defined in Section 8.9.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Credit Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Swingline Commitment" means the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as
provided in Section 2.3(b)(ii), as such amounts may be reduced from time to
time in accordance with the provisions hereof.
"Swingline Committed Amount" means the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.3(a).
"Swingline Lender" means NationsBank, in its capacity as such.
22
"Swingline Loan" or "Swingline Loans" means such terms as are defined
in Section 2.3(a).
"Termination Date" means the earlier of (a) the date which is the
fourth (4th) anniversary of the Closing Date or (b) the date on which the
Revolving Commitments shall terminate in accordance with the provisions of
this Credit Agreement.
"Tranche" means the collective reference to Eurodollar Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "Eurodollar Tranche".
"Transfer Effective Date" means such term as defined in the Commitment
Transfer Supplement.
"Transferee" means such term as defined in Section 11.6(f).
"Type" means, as to any Loan, its nature as a Base Rate Loan,
Eurodollar Loan or Swingline Loan, as the case may be.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Credit Agreement shall have the defined meanings when used in the Notes or
other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Credit Agreement shall refer to this Credit
Agreement as a whole and not to any particular provision of this Credit
Agreement, and Section, subsection, Schedule and Exhibit references are to
this Credit Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) 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 and Determinations.
Unless otherwise specified herein, all terms of an accounting character
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial
23
statements required to be delivered hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent (except for changes concurred in by the
Company's independent public accountants or otherwise required by a change in
GAAP) with the most recent audited consolidated financial statements of the
Company and its consolidated Subsidiaries delivered to the Lenders unless with
respect to any such change concurred in by the Company's independent public
accountants or required by GAAP, in determining compliance with any of the
provisions of this Credit Agreement or any of the other Credit Documents: (i)
the Company or the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements, or (ii) the
Required Lenders shall so object in writing within 30 days after the delivery of
such financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements delivered
under Section 7.1 hereof, shall mean the financial statements referred to in
Section 6.1).
At any time that there is no material difference (other than intercompany
transactions which eliminate in the consolidation of the Company's financial
statements) between the financial information of the Company and it Subsidiaries
and the financial information of the Borrower and its Subsidiaries, the Borrower
may use any financial information of the Company and its Subsidiaries in full
satisfaction of any provision of this Credit Agreement (including, but not
limited to, the delivery of financial information pursuant to Section 7.1 and
the determination of compliance with the financial covenants pursuant to Section
7.9).
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrower from time to time for the
purposes hereinafter set forth; provided, however, that (i) with regard to
each Lender individually, the sum of such Lender's share of outstanding
Revolving Loans plus such Lender's LOC Commitment Percentage of outstanding
LOC Obligations plus such Lender's Revolving Commitment Percentage of
Swingline Loans shall not exceed such Lender's Revolving Committed Amount,
and (ii) with regard to the Lenders collectively, the sum of the aggregate
amount of outstanding Revolving Loans plus LOC Obligations plus Swingline
Loans shall not exceed SEVENTY-FIVE MILLION DOLLARS ($75,000,000) (as such
aggregate maximum amount may be reduced or increased from time to time as
provided
24
herein, the "Revolving Committed Amount"). Revolving Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request, and may be repaid and reborrowed in accordance with
the provisions hereof. Eurodollar Loans shall be made by each Lender at its
Eurodollar Lending Office and Base Rate Loans at its Domestic Lending
Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a Revolving
Loan borrowing by written notice (or telephone notice promptly
confirmed in writing which confirmation may be by fax) to the Agent
not later than 11:00 A.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. A
form of Notice of Borrowing (a "Notice of Borrowing") is attached as
Schedule 2.1(b)(i). If the Borrower shall fail to specify in any such
Notice of Borrowing (I) an applicable Interest Period in the case of a
Eurodollar Loan, then such notice shall be deemed to be a request for
an Interest Period of one month, or (II) the type of Revolving Loan
requested, then such notice shall be deemed to be a request for a Base
Rate Loan hereunder. The Agent shall give notice to each Lender
promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing shall be in a
minimum aggregate amount of $3,000,000 and integral multiples of
$1,000,000, in the case of Eurodollar Loans, and $1,000,000 and
integral multiples of $1,000,000 in excess thereof (or the remaining
amount of the Revolving Commitment, if less) in the case of Base Rate
Loans.
(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 at the office of the Agent specified in
Schedule 11.2, or at such other office as the Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and in
funds immediately available to the Agent. Such 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.
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(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1, Revolving
Loans shall bear interest as follows:
(i) Base Rate Loans. During such periods as Revolving Loans shall
be comprised of Base Rate Loans, each such Base Rate Loan shall bear
interest at a per annum rate equal to the Base Rate; and
(ii) Eurodollar Loans. During such periods as Revolving Loans
shall be comprised of Eurodollar Loans, each such Eurodollar Loan
shall bear interest at a per annum rate equal to the sum of the
Eurodollar Rate plus the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date.
(e) Increase in Revolving Commitments. Subject to the terms and
conditions set forth herein, upon twelve (12) days advance written notice
to the Agent, the Borrower shall have the right, at any time and from time
to time from the Closing Date until the Termination Date, to increase the
Revolving Committed Amount by an amount up to $75,000,000 in the aggregate;
provided that (i) any such increase shall be in a minimum principal amount
of $15,000,000 and integral multiples of $5,000,000 in excess thereof (or
the remaining amount, if less), (ii) if any Revolving Loans are outstanding
at the time of any such increase, the Borrower shall make such payments and
adjustments on the Revolving Loans (including payment of any break-funding
amount owing under Section 3.10) as necessary to give effect to the revised
commitment percentages and commitment amounts of the Lenders and (iii) the
conditions to Extensions of Credit in Sections 5.2 shall be true and
correct. An increase in the Revolving Committed Amount hereunder shall be
subject to satisfaction of the following: (A) in the case of any such
request for an increase in the Revolving Committed Amount, the amount of
such increase shall be offered first to the existing Lenders, and in the
event the additional commitments which existing Lenders are willing to take
shall exceed the amount requested by the Borrower, then in proportion to
the commitments of such existing Lenders willing to take additional
commitments, and (B) in the case of any such request for an increase in the
Revolving Committed Amount, the amount of the additional commitments
requested by the Borrower shall exceed the additional commitments which the
existing Lenders are willing to take, then the Borrower may invite other
commercial banks and financial institutions reasonably acceptable to the
Agent to join this Credit Agreement as Lenders hereunder for the portion of
commitments not taken by existing Lenders, provided that such other
commercial banks and financial institutions shall enter into such joinder
26
agreements to give effect thereto as the Agent and the Borrower may
reasonably request. In connection with any increase in the Revolving
Commitments pursuant to this Section, Schedule 2.1(a) shall be revised to
reflect the modified commitment percentages and commitments of the Lenders.
Upon payment of the one time Expandability Syndication Fee (as such term is
defined in the Agent's Fee Letter), NationsBank shall use reasonable
efforts to obtain additional commitments to accommodate any request by the
Borrower to increase the Revolving Commitments.
(f) Revolving Notes. The Revolving Loans shall be evidenced by the
Revolving Notes.
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the Issuing
Lender may reasonably require, the Issuing Lender shall issue, and the
Lenders shall participate in, Letters of Credit for the account of the
Borrower from time to time upon request from the Closing Date until the
Termination Date in a form acceptable to the Issuing Lender; provided,
however, that (i) the aggregate amount of LOC Obligations shall not at any
time exceed SEVEN MILLION DOLLARS ($7,000,000) (the "LOC Committed
Amount"), (ii) with regard to each Lender individually, such Lender's LOC
Commitment Percentage of the outstanding LOC Obligations shall not exceed
such Lender's LOC Commitment, (iii) with regard to the Lenders
collectively, the sum of the aggregate amount of outstanding Revolving
Loans plus LOC Obligations plus Swingline Loans shall not exceed the
Revolving Committed Amount and (iv) standby Letters of Credit shall be
issued for the purpose of supporting workers' compensation and other
insurance programs and other purposes arising from the ordinary course of
the Borrower's business. Except as otherwise expressly agreed upon by all
the Lenders, no Letter of Credit shall have an original expiry date more
than one year from the date of issuance; provided, however, so long as no
Default or Event of Default has occurred and is continuing and subject to
the other terms and conditions to the issuance of Letters of Credit
hereunder, the expiry dates of Letters of Credit may be extended annually
on each anniversary date of their date of issuance for an additional one
year period; provided, further, that no Letter of Credit, as originally
issued or as extended, shall have an expiry date extending beyond the
Termination Date unless, but only to the extent that, the Borrower shall
provide cash collateral to the Issuing Lender on the date of issuance or
extension in an amount equal to the maximum amount available to be drawn
under such Letter of Credit. Each Letter of Credit shall comply with the
related LOC Documents. The issuance and expiry date of each Letter of
Credit shall be a Business Day.
27
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted 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, provide to the Agent for
dissemination to the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the beneficiary,
the face amount, expiry date as well as any payments or expirations which
may have occurred. The Agent will promptly provide copies of such reports
to the Lenders. The Issuing Lender will further provide to the Agent
promptly upon request copies of the Letters of Credit. The Issuing Lender
will provide to the Agent at least weekly, and more frequently upon
request, a summary report of the nature and extent of LOC Obligations then
outstanding.
(c) Participations. Each Lender, with respect to the Existing Letters
of Credit, hereby purchases a participation interest in such Existing
Letters of Credit and with respect to Letters of Credit issued on or after
the Closing Date, upon issuance of a Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the Issuing
Lender in such Letter of Credit and the obligations arising thereunder and
any collateral relating thereto, in each case in an amount equal to its LOC
Commitment Percentage of the obligations under such Letter of Credit and
shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Lender
therefor and discharge when due, its LOC Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the scope
and nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Lender shall pay to
the Issuing Lender its LOC Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing Lender
of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any Letter
of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to
have requested a Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower shall reimburse the Issuing Lender
28
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 as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the
Base Rate plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, 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 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 LOC Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time), otherwise such payment shall be made at
or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day
next succeeding the day such notice is received. If such Lender does not
pay such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of
such drawing until such Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two (2) Business Days of
the date of drawing, the Federal Funds Rate and thereafter at a rate equal
to the Base Rate. Each Lender's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default
or Event of Default or the acceleration of the Obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
borrowing to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Lenders that a Revolving Loan has been requested or
deemed requested in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan borrowing comprised solely of Base Rate Loans
(each such borrowing, a "Mandatory Borrowing") shall be immediately made
from all Lenders (without giving effect to any termination of the
Commitments pursuant to Section 9.1) pro rata based on each Lender's
respective Revolving Commitment Percentage (determined before giving effect
to any termination of the Commitments pursuant to Section 9.1) and the
proceeds thereof shall be paid
29
directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make such
Revolving Loans immediately upon any such request or deemed request on
account of each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date
notwithstanding (i) the amount of Mandatory Borrowing may not comply with
the minimum amount for borrowings of Revolving Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are then
satisfied, (iii) whether a Default or 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 in Section 2.1(b), (v) the date of such
Mandatory Borrowing, or (vi) any reduction in the Revolving Committed
Amount after any such Letter of Credit may have been drawn upon; provided,
however, that in the event any such Mandatory Borrowing should be less than
the minimum amount for borrowings of Revolving Loans otherwise provided in
Section 2.1(b)(ii), the Borrower shall pay to the Agent for its own account
an administrative fee of $500. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower or any
other Credit Party), then each such Lender hereby agrees that it shall
forthwith fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) its Participation Interests in
the outstanding LOC Obligations; provided, further, that in the event any
Lender shall fail to fund its Participation Interest on the day the
Mandatory Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if paid
within two (2) Business Days of such date, the Federal Funds Rate, and
thereafter at a rate equal to the Base Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part thereof.
2.3 Swingline Loan Subfacility.
(a) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual
capacity, agrees to
30
make certain revolving credit loans to the Borrower (each a "Swingline
Loan" and, collectively, the "Swingline Loans") for the purposes
hereinafter set forth; provided, however, (i) the aggregate amount of
Swingline Loans outstanding at any time shall not exceed FOUR MILLION
DOLLARS ($4,000,000) (the "Swingline Committed Amount"), and (ii) the sum
of the aggregate amount of outstanding Revolving Loans plus LOC Obligations
plus Swingline Loans shall not exceed the Aggregate Revolving Committed
Amount. Swingline Loans hereunder may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The Borrower may
request a Swingline Loan borrowing by written notice (or telephone
notice promptly confirmed in writing which confirmation may be by fax)
to the Swingline Lender and a copy to the Agent not later than 12:00
Noon (Charlotte, North Carolina time) on the Business Day of the
requested Swingline borrowing. Each such notice shall be irrevocable
and shall specify (A) that a Swingline Loan borrowing is requested,
(B) the date of the requested Swingline Loan borrowing (which shall be
a Business Day) and (C) the aggregate principal amount of the
Swingline Loan borrowing. A form of Notice of Borrowing (a "Notice of
Borrowing") is attached as Schedule 2.1(b)(i). Requests for Swingline
Loans made in accordance with this Section 2.3 will be honored by the
end of the date of the requested borrowing specified in the Notice of
Borrowing. Each Swingline Loan borrowing shall be in a minimum
aggregate amount of $100,000 and integral multiples of $100,000 in
excess thereof (or the remaining amount of the Swingline Commitment,
if less).
(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing
shall be due and payable on the earlier of (A) the date of the next
Revolving Loan borrowing, or (B) the Termination Date. If, and to the
extent, any Swingline Loans shall be outstanding on the date of any
Revolving Loan borrowing, such Swingline Loans shall first be repaid
from the proceeds of such Revolving Loan borrowing prior to
disbursement to the Borrower. In addition, the Swingline Lender may,
at any time, in its sole discretion, by written notice to the Borrower
and the Agent, demand repayment of its Swingline Loans by way of a
Revolving Loan borrowing, in which case the Borrower shall be deemed
to have requested a Revolving Loan borrowing comprised entirely of
Base Rate Loans in the amount of such Swingline Loans; provided,
however, that, in the following circumstances, any such demand shall
also be deemed to have been given one Business Day prior to each of
(i) the Termination Date, (ii) the occurrence of any Event of Default
described in Section 9.1(e), (iii) upon
31
acceleration of the Obligations hereunder, whether on account of an
Event of Default described in Section 9.1(e) or any other Event of
Default, and (iv) the exercise of remedies in accordance with the
provisions of Section 9 hereof (each such Revolving Loan borrowing
made on account of any such deemed request therefor as provided herein
being hereinafter referred to as a "Mandatory Borrowing"). Each Lender
hereby irrevocably agrees to make such Revolving Loans promptly upon
any such request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date notwithstanding (I) the amount of
Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (II)
whether any conditions specified in Section 5.2 are then satisfied,
(III) whether a Default or an Event of Default then exists, (IV)
failure of such request or deemed request for Revolving Loans to be
made by the time otherwise required in Section 2.1(b)(i), (V) the date
of such Mandatory Borrowing, or (VI) any reduction in the Revolving
Committed Amount or termination of the Revolving Commitments relating
thereto immediately prior to such Mandatory Borrowing or
contemporaneous therewith. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required
above(including, without limitation, as a result of the commencement
of a proceeding in bankruptcy with respect to the Borrower), then each
Lender hereby agrees that it shall forthwith purchase (as of the date
the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and
prior to such purchase) 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
respective Revolving Commitment Percentage (determined before giving
effect to any termination of the Revolving Commitments pursuant to
Section 9), 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 interest on the principal amount of such
participation purchased for each day from and including the day upon
which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the rate
equal to, if paid within two (2) Business Days of the date of the
Mandatory Borrowing, the Federal Funds Rate, and thereafter at a rate
equal to the Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of Section
3.1, Swingline Loans shall bear interest at a per annum rate equal to the
Base Rate. Interest on Swingline Loans shall be payable in arrears on each
Interest Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by the
Revolving Notes
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then 2% greater than the Base Rate).
32
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 Type; provided, however, that (i) except as provided in Section
3.7, Eurodollar Loans may be converted into Base Rate Loans only on the last day
of the Interest Period applicable thereto, (ii) Eurodollar Loans may be
extended, and Base Rate Loans may be converted into Eurodollar Loans, only if no
Default or Event of Default is in existence on the date of extension or
conversion, (iii) Loans extended as, or converted into, Eurodollar Loans shall
be subject to the terms of the definition of "Interest Period" set forth in
Section 1.1 and shall be in such minimum amounts as provided in Section
2.1(b)(ii), (iv) no more than ten (10) separate Eurodollar Loans shall be
outstanding hereunder at any time, (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 and (vi) Swingline
Loans may not be extended or converted pursuant to this Section 3.2. Each such
extension or conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephone notice promptly confirmed in writing) to the
Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day
of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan and
on the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Loans to be so extended or converted, the types of
Loans into which such Loans are to be converted and, if appropriate, the
applicable Interest Periods with respect thereto. Each request for extension or
conversion shall constitute a representation and warranty by the Borrower of the
matters specified in subsections as appropriate (a) and (b), and in (c) or (d)
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
Loans shall be automatically converted into Base Rate Loans at the end of their
Interest Period. The Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 Reductions in Commitments and Prepayments.
(a) Voluntary Reduction in Revolving Commitment. The Borrower may from
time to time permanently reduce the aggregate amount of the Revolving
Commitments in whole or in part without premium or penalty except as
provided in Section 3.10 upon three (3) Business Days' prior written notice
to the Agent; provided that after giving effect to any such voluntary
reduction the sum of Revolving Loans plus LOC Obligations plus Swingline
Loans then outstanding shall not exceed the Aggregate Revolving Committed
Amount. Partial reductions in the aggregate Revolving Commitment shall in
each case be in a minimum aggregate amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof.
33
(b) Mandatory Reductions in Revolving Commitments and Mandatory
Prepayments.
(i) Asset Sales and Dispositions. The Aggregate Revolving
Committed Amount shall be automatically and permanently reduced by an
aggregate amount equal to 100% of the Net Proceeds received by the
Borrower or any of its Subsidiaries from any Asset Disposition where
and to the extent (A) such Net Proceeds are not reinvested in similar
property or assets within 120 days of the date of such Asset
Disposition (or any series of related sales, transfers or
dispositions), and (B) such Net Proceeds that are not reinvested in
the aggregate in any fiscal year constitute more than fifteen percent
(15%) of the consolidated assets for the Consolidated Group as of the
end of the immediately preceding fiscal year. Where a payment shall be
owing on account of a reduction of the Aggregate Revolving Committed
Amount hereunder in accordance with the provisions of Section
3.3(b)(iii), any such payment shall be made to the Agent promptly (but
in any event within two (2) Business Days) following receipt by the
Borrower or a Subsidiary of the Net Proceeds therefrom (taking into
account any periods permitted for reinvestment thereof).
(ii) Mandatory Prepayments. If at any time (A) the sum of the
aggregate amount of Revolving Loans plus LOC Obligations plus
Swingline Loans then outstanding shall exceed the Aggregate Revolving
Committed Amount, (B) the aggregate amount of LOC Obligations shall
exceed the aggregate LOC Committed Amount, or (C) the aggregate amount
of Swingline Loans shall exceed the Swingline Committed Amount, then
in any such instance the Borrower shall immediately make payment on
the Loans or provide cash collateral in respect of the LOC Obligations
in an amount sufficient to eliminate the deficiency. In the case of a
mandatory prepayment required on account of subsection (B) or (C) in
the foregoing sentence, the amount required to be paid shall serve to
temporarily reduce the Aggregate Revolving Committed Amount (for
purposes of borrowing availability hereunder, but not for purposes of
computation of fees) by the amount of the payment required until such
time as the situation shall no longer exist. Payments hereunder shall
be applied first to Swingline Loans, then to Revolving Loans, and then
to a cash collateral account in respect of the LOC Obligations.
(c) Voluntary Prepayments. Loans may be prepaid in whole or in part
without premium or penalty; provided that (i) Eurodollar Loans may not be
prepaid other than at the end of the Interest Period applicable thereto,
and (ii) each such partial prepayment shall be in a minimum aggregate
principal amount of $1,000,000 and integral multiples of $500,000 in excess
thereof, in the case of Revolving Loans, and $100,000 and integral
multiples thereof, in the case of Swingline Loans. Amounts prepaid on the
Revolving Loans may be reborrowed in accordance with the provisions hereof.
(d) Notice and Application. Except as otherwise provided herein, the
Borrower will provide notice to the Agent of any prepayment by 11:00 A.M.
(Charlotte, North Carolina time) on the date of prepayment. Unless
otherwise expressly provided by the Borrower, amounts paid hereunder shall
be applied first to Base Rate Loans and then to Eurodollar Loans in direct
order of their Interest Period maturities.
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3.4 Fees.
(a) Commitment Fee. In consideration of the Revolving Commitments by
the Lenders hereunder, the Borrower agrees to pay to the Agent for the
ratable benefit of the Lenders a commitment fee (the "Commitment Fee") in
an amount equal to the Applicable Percentage per annum on the average daily
unused portion of the Revolving Committed Amount in effect from time to
time. For purposes of computing the Commitment Fee, Swingline Loans shall
not be considered usage under the Revolving Committed Amount. The
Commitment Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior calendar
quarter.
(b) Letter of Credit Fees. In consideration of the LOC Commitments,
the Borrower agrees to pay to the Issuing Lender a fee (the "Letter of
Credit Fee") equal to the Applicable Percentage per annum on the average
daily maximum amount available to be drawn under each Letter of Credit from
the date of issuance to the date of expiration. The Issuing Lender shall
promptly pay the Letter of Credit Fee over to the Agent for the ratable
benefit of the Lenders (including the Issuing Lender). In addition to such
Letter of Credit Fee, the Borrower agrees to pay to the Issuing Lender for
its own account without sharing by the other Lenders one-eighth of one
percent (1/8%) per annum on the average daily maximum amount available to
be drawn under each such Letter of Credit issued by it. The Letter of
Credit Fee shall be payable quarterly in arrears on the 15th day following
the last day of each calendar quarter.
(c) Administrative Fees. The Borrower agrees to pay to the Agent, for
its own account, the annual administrative fee (the "Agent's Fees")
referred to in the Agent's Fee Letter.
3.5 Capital Adequacy.
If, after the date hereof, any Lender has determined that the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender or its parent company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's or its parent company'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 the policies of such Lender and
its parent company with respect to capital adequacy), then, within 10 Business
Days after the Borrower's receipt of the certificate referred to in the next
sentence, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender and its parent company for such
reduction; provided, however, that a Lender will not request any amounts
hereunder unless it is generally requesting amounts under comparable provisions
from similarly situated borrowers, and provided, further, that no such amounts
shall be payable with respect to reduction in rate of return incurred more than
three (3) months before such Lender demands compensation under this Section 3.5.
A certificate as to the amount of such reduction in rate of return, the basis
therefor and setting forth in reasonable detail the calculations used by the
applicable Lender to arrive at the amount or amounts claimed to be due, shall be
submitted to the Borrower and the Agent. Each determination by a Lender of
amounts owing under this Section shall be rebuttably presumptive evidence of the
matters set forth therein.
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3.6 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Agent shall give telecopy or telephonic notice
thereof to the Borrower and the Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to or
continued as Eurodollar Loans shall be converted to or continued as Base Rate
Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last
day of the applicable Interest Periods, to Base Rate Loans. Until such notice
has been withdrawn by the Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrower have the right to convert Base Rate
Loans to Eurodollar Loans.
3.7 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days or the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to subsection
3.10.
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3.8 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(i) shall subject such Lender to any tax of any kind whatsoever on or
in respect of any letter of credit application or any Eurodollar Loans made
by it or its obligation to make Eurodollar Loans, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 3.9 (including Non-Excluded Taxes
imposed solely by reason of any failure of such Lender to comply with its
obligations under subsection 3.9(b)) and changes in taxes measured by or
imposed upon the overall net income, or franchise tax (imposed in lieu of
such net income tax), of such Lender or its applicable lending office,
branch, or any affiliate thereof);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition (excluding any
tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the
Borrower from such Lender, through the Agent, in accordance herewith, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable, provided that, in any such case, the Borrower may elect to convert
the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Agent at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Lender, upon demand, without duplication,
such amounts, if any, as may be required pursuant to subsection 3.10. If any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall provide prompt notice thereof to the Borrower, through the
Agent, certifying (x) that one of the events described in this paragraph has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to the Borrower shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
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3.9 Taxes.
(a) Except as provided below in this subsection, all payments made by
the Borrower under this Credit Agreement and any Notes shall be made free
and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding taxes measured by or imposed upon the overall net
income of any Lender or its applicable lending office, or any branch or
affiliate thereof, and all franchise taxes, branch taxes, taxes on doing
business or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under
the laws of which such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which its principal executive
office is located, or any nation within which such jurisdiction is located
or any political subdivision thereof; or (ii) by reason of any connection
between the jurisdiction imposing such tax and such Lender, applicable
lending office, branch or affiliate other than a connection arising solely
from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes.
If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or
under any Notes, (A) the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Credit Agreement and any Notes, provided, howeve , that the Borrower shall
be entitled to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof
if such Lender fails to comply with the requirements of paragraph (b) of
this subsection whenever any Non-Excluded Taxes are payable by the
Borrower, and (B) as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
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(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X) (i) on or before the date of any payment by the Borrower
under this Credit Agreement or Notes to such Lender, deliver to the
Borrower and the Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, certifying that it is entitled to receive
payments under this Credit Agreement and any Notes without deduction
or withholding of any United States federal income taxes and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be, certifying that it is entitled to an
exemption from United States backup withholding tax;
(ii) deliver to the Borrower and the Agent two further copies of
any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Agent; or
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code, (i) represent to the
Borrower (for the benefit of the Borrower and the Agent) that it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(ii) agree to furnish to the Borrower on or before the date of any
payment by the Borrower, with a copy to the Agent (A) a certificate
substantially in the form of Schedule 3.10 (any such certificate a
"U.S. Tax Compliance Certificate") and (B) two accurate and complete
original signed copies of Internal Revenue Service Form W-8, or
successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Code
with respect to payments to be made under this Credit Agreement and
any Notes (and to deliver to the Borrower and the Agent two further
copies of such form on or before the date it expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or the Agent
for filing and completing such forms), and (iii) agree, to the extent
legally entitled to do so, upon reasonable request by the Borrower, to
provide to the Borrower (for the benefit of the Borrower and the
Agent) such other forms as may be reasonably required in order to
establish the legal entitlement of such Lender to an exemption from
withholding with respect to payments under this Credit Agreement and
any Notes;
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unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such
Lender so advises the Borrower and the Agent. Each Person that shall become
a Lender or a participant of a Lender pursuant to subsection 11.6 shall,
upon the effectiveness of the related transfer, be required to provide all
of the forms, certifications and statements required pursuant to this
subsection, provided that in the case of a participant of a Lender the
obligations of such participant of a Lender pursuant to this subsection (b)
shall be determined as if the participant of a Lender were a Lender except
that such participant of a Lender shall furnish all such required forms,
certifications and statements to the Lender from which the related
participation shall have been purchased.
(c) In the event that any Lender requests payment by the Borrower of
any additional amounts pursuant to subsection (a) of this Section 3.9,
then, provided that no Default or Event of Default has occurred and is
continuing at such time, the Borrower may, at its own expense (such expense
to include any transfer fee payable to the Agent under Section 11.6(b)),
and in its sole discretion require such Lender to transfer and assign in
whole or in part, without recourse (in accordance with and subject to the
terms and conditions of Section 11.6(b)), all or part of its interests,
rights and obligations under this Credit Agreement to an Eligible
Transferee which shall assume such assigned obligations; provided that (i)
such assignment shall not relieve the Borrower from its obligations to pay
such additional amounts that may be due in accordance with subsection (a)
of this Section 3.9, (ii) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority
and (iii) the Borrower or such Eligible Transferee shall have paid to the
assigning Lender in immediately available funds the principal of and
interest accrued to the date of such payment on the Loans made by it
hereunder and all accrued Fees and other amounts owed to it hereunder.
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3.10 Indemnity.
The Borrower agrees to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable Percentage
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
3.11 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Except to the extent otherwise provided herein, each
Revolving Loan, each payment or prepayment of principal of any Revolving
Loan, each payment of interest on the Revolving Loans, each payment of
Commitment Fees, each reduction of the Revolving Committed Amount and each
conversion or extension of any Revolving Loan, shall be allocated pro rata
among the Lenders in accordance with the respective principal amounts of
their outstanding Loans and Participation Interests.
(b) Letters of Credit. Each payment of the Letter of Credit Fee (other
than the portion retained by the Issuing Bank for its own account) and of
unreimbursed drawings in respect of LOC Obligations shall be allocated to
each Lender entitled thereto pro rata in accordance with its LOC Commitment
Percentage; provided that, if any Lender shall have failed to pay its
applicable pro rata share of any drawing under any Letter of Credit, then
any amount to which such Lender would otherwise be entitled pursuant to
this subsection (b) shall instead be payable to the Issuing Lender;
provided further, that in the event any amount paid to any Lender pursuant
to this subsection (b) is rescinded or must otherwise be returned by the
Issuing Lender, each Lender shall, upon the request of the Issuing Lender,
repay to the Agent for the account of the Issuing Lender the amount so paid
to such Lender, with interest for the period commencing on the date such
payment is returned by the Issuing Lender until the date the Issuing Lender
receives such repayment at a rate per annum equal to, during the period to
but excluding the date two (2) Business Days after such request, the
Federal Funds Rate, and thereafter, the Base Rate plus two percent (2%).
41
(c) Advances. Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its Revolving Commitment Percentage of such borrowing
available to the Agent, the Agent may assume that such Lender is making
such amount available to the Agent, and the Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If
such amount is not made available to the Agent by such Lender within the
time period specified therefor hereunder, such Lender shall pay to the
Agent, on demand, such amount with interest thereon at a rate equal to the
Federal Funds Rate for the period until such Lender makes such amount
immediately available to the Agent. A certificate of the Agent submitted to
any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's Revolving
Commitment Percentage of such borrowing is not made available to the Agent
by such Lender within two Business Days of the date of the related
borrowing, the Agent shall notify the Borrower of the failure of such
Lender to make such amount available to the Agent and the Agent shall also
be entitled to recover such amount with interest thereon at the rate per
annum applicable to Base Rate Loans hereunder, on demand, from the
Borrower.
3.12 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, any unreimbursed drawing with respect to
any LOC Obligations or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall promptly purchase from the other Lenders a participation in
such Loans, LOC Obligations and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan, LOC Obligation or other obligation in
the amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or the Agent shall fail to remit to the Agent or
any other Lender an amount payable by such Lender or the Agent to the Agent or
such other Lender pursuant to this Credit Agreement
42
on the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Agent or such other Lender at a rate per annum equal
to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section 3.12 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders under this Section 3.12 to share in the benefits of
any recovery on such secured claim.
3.13 Place and Manner of Payments.
Except as otherwise specifically provided herein, all payments hereunder
shall be made to the Agent in Dollars in immediately available funds, without
offset, deduction, counterclaim or withholding of any kind, at its offices at
the Agent's office specified in Schedule 11.2 not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments received after
such time shall be deemed to have been received on the next succeeding Business
Day. The Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower maintained with the Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Credit Agreement, specify to
the Agent the Loans, LOC Obligations, Fees or other amounts payable by the
Borrower hereunder to which such payment is to be applied (and in the event that
it fails so to specify, or if such application would be inconsistent with the
terms hereof, the Agent shall distribute such payment to the Lenders in such
manner as the Agent may determine to be appropriate in respect of obligations
owing by the Borrower hereunder, subject to the terms of Section 3.11). 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 over a year
of 360 days, except with respect to computation of interest on Base Rate Loans
which shall be calculated based on a year of 365 or 366 days, as appropriate.
Interest shall accrue from and include the date of borrowing, but exclude the
date of payment.
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3.14 Indemnification; Nature of Issuing Lender's Duties.
In addition to its other obligations under Sections 2.2, the Borrower
hereby agrees to protect, indemnify, pay and save each Issuing Lender harmless
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees) that the
Issuing Lender may incur or be subject to as a consequence, direct or indirect,
of (A) the issuance of any Letter of Credit or (B) the failure of the Issuing
Lender to honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions, herein
called "Government Acts"). As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any Letter
of Credit by the beneficiary thereof.
SECTION 4
GUARANTY
4.1 The Guaranty.
Each of the Credit Parties hereby jointly and severally guarantees to each
Lender and the Agent as hereinafter provided 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 Credit Parties 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 Credit Parties 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, the obligations of each Credit Party 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 U.S. Bankruptcy Code or any comparable provisions of any applicable state
law.
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4.2 Obligations Unconditional.
The obligations of the Credit Parties under Section 4.1 hereof are joint
and several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents, or any
other agreement or instrument referred to therein, or any substitution, release
or exchange of any other guarantee of or security for any of the 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 Credit
Parties hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of any Credit Party hereunder which shall remain absolute
and unconditional as described above:
(i) at any time or from time to time, without notice to any Credit
Party, 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;
(ii) any of the acts mentioned in any of the provisions of any of the
Credit Documents or any other agreement or instrument referred therein
shall be done or omitted;
(iii) 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 or any other agreement or instrument referred to therein
shall be waived or any other guarantee of any of the Credit Party
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(v) 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 Credit Party) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Credit Party).
With respect to its obligations hereunder, each Credit Party hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents
or any other agreement or instrument referred to therein, or against any other
Person under any other guarantee of, or security for, any of the Credit Party
Obligations.
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4.3 Reinstatement.
The obligations of the Credit Parties 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 Credit Party agrees that it will indemnify
each of the Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the Agent
or such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of any other Section of
this Section 4, each Credit Party hereby specifically waives the benefits of
N.C. Gen. Stat. ?? 26-7 through 26-9, inclusive. Each Credit Party further
agrees that such Guarantor shall have no right of recourse to security for the
Credit Party Obligations. Each of the Credit Parties further agrees that it
shall have no right of subrogation, reimbursement or indemnity, nor any right of
recourse to security, if any, for the Credit Party Obligations so long as any
amounts payable to the Agent and the Lenders in respect of the Credit Party
Obligations shall remain outstanding and until all of the Revolving Commitments
shall have expired or been terminated.
4.5 Remedies.
The Credit Parties agree that, as between the Credit Parties, 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 hereof (and shall be deemed to have become automatically due and
payable in the circumstances provided in said Section 9) for purposes, of
Section 4.1 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing such Credit Party Obligations from
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or such Credit Party Obligations being deemed to
have become automatically due and payable), such Credit Party Obligations
(whether or not due and payable by any other Person) shall forthwith become due
and payable by the Credit Parties for purposes of said Section 4.1.
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4.6 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Credit Party Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Conditions to Closing Date.
This Credit Agreement shall become effective upon the satisfaction of the
following conditions precedent:
(a) Execution of Agreement. The Agent shall have received (i) multiple
counterparts of this Credit Agreement for each Lender executed by a duly
authorized officer of each party hereto and (ii) for the account of each
Lender (including the Swingline Lender) a Revolving Note.
(b) Liability and Casualty Insurance. Receipt by the Agent of copies
of insurance policies or certificates of insurance evidencing liability and
casualty insurance meeting the requirements set forth herein, together with
evidence of payment of premiums thereon.
(c) Financial Information. Receipt by the Agent of copies of audited
consolidated financial statements for the Company and its Subsidiaries for
fiscal years 1995 and 1996; and interim quarterly company-prepared
consolidated financial statements for the Company and its Subsidiaries
dated as of September 30, 1997.
(d) Corporate Documents. Receipt by the Agent of the following:
(i) Certificate of Incorporation. Copies of the certificates of
incorporation or charter documents of the Borrower and each of the
other Credit Parties certified to be true and complete as of a recent
date by the appropriate governmental authority of the state of its
incorporation.
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(ii) Resolutions. Copies of resolutions of the Board of Directors
of the Borrower and each of the other Credit Parties approving and
adopting the Credit Documents, the transactions contemplated therein
and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary as of the Closing Date to be true and
correct and in force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of the Borrower and each of
the other Credit Parties certified by a secretary or assistant
secretary as of the Closing Date to be true and correct and in force
and effect as of such date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to the Borrower and each of
the other Credit Parties certified as of a recent date by the
appropriate governmental authorities of the state of incorporation and
each other state in which the failure to so qualify and be in good
standing would have a material adverse effect on the business or
operations of the Borrower or other Credit Party in such state and
(ii) a certificate indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate governmental taxing
authorities.
(e) Officer's Certificate. The Agent shall have received, with a
counterpart for each Lender, a certificate of a duly authorized officer of
each of the Borrower and each of the other Credit Parties dated the
Effective Date, substantially in the form of Schedule 5.1(g) with
appropriate insertions and attachments.
(f) Legal Opinion of Counsel. The Agent shall have received, with a
copy for each Lender, an opinion of Dechert Price & Xxxxxx, counsel for the
Borrower, the Company and the other Guarantors, dated the Closing Date and
addressed to the Agent and the Lenders, in form and substance satisfactory
to the Agent and the Required Lenders.
(g) Fees. The Agent shall have received all fees, if any, owing
pursuant to the Agent's Fee Letter and Section 3.4.
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(h) Subsection 5.2 Conditions. The conditions specified in subsections
5.2(a) and (b) shall be satisfied on the Closing Date as if the initial
Extensions of Credit were to be made on such date.
(i) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Credit Agreement
shall be reasonably satisfactory in form and substance to the Agent and its
counsel.
5.2 Conditions to All Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) Representations and Warranties. The representations and warranties
made by the Borrower, the Company and the other Credit Parties herein or
which are contained in any certificate of a Responsible Officer furnished
at any time under or in connection herewith shall be true and correct in
all material respects on and as of the date of such Extension of Credit as
if made on and as of such date.
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Extension of Credit to be made on such date unless such Default or
Event of Default shall have been waived in accordance with this Credit
Agreement.
(c) Additional Conditions to Revolving Loans. If such Extension of
Credit is made pursuant to subsection 2.1, all conditions set forth in such
subsection shall have been satisfied.
(d) Additional Conditions to Letters of Credit. If such Extension of
Credit is made pursuant to subsection 2.2, all conditions set forth in such
subsection shall have been satisfied.
(e) Additional Conditions to Swingline Loan. If such Extension of
Credit is made pursuant to subsection 2.3, all conditions set forth in such
subsection shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the Borrower
of an Extension of Credit shall be deemed to constitute a representation and
warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) and (b), and in (c), (d) or (e) of this
subsection have been satisfied.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extension of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Agent and to each Lender that:
6.1 Financial Condition.
(a) The consolidated balance sheet of the Company and its consolidated
Subsidiaries as at December 31, 1995, December 31, 1996 and September 30,
1997, and the related consolidated statements of income and of cash flows
for the fiscal year or nine month period ended on such date, reported on
(only in the case of such annual statements) by KPMG Peat Marwick LLP,
copies of which have heretofore been furnished to each Lender, are complete
and correct in all material respects in accordance with GAAP and fairly
present in all material respects the consolidated financial condition of
the Company and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows
for the fiscal year or nine month period then ended, subject in the case of
the September 30, 1997 statements to normal year end adjustments. All such
financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout
the periods involved (except as disclosed therein). Neither the Company nor
any of its consolidated Subsidiaries had, at the date of the balance sheets
referred to above, any material Guarantee Obligation, contingent
liabilities or liability for taxes, long-term lease or unusual forward or
long-term commitment, including, without limitation, any material interest
rate or foreign currency swap or exchange transaction, which are not
reflected in the foregoing statements or in the notes thereto.
(b) The consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at December 31, 1995, December 31, 1996 and
September 30, 1997, and the related consolidated statements of income and
of cash flows for the fiscal year or nine month period ended on such date,
reported on (only in the case of such annual statements) by KPMG Peat
Marwick LLP, copies of which have heretofore been furnished to each Lender,
are complete and correct in all material respects in accordance with GAAP
and fairly present in all material respects the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their
consolidated cash flows for the fiscal year or nine month period then
ended, subject in the case of the September 30, 1997 statements to normal
year end adjustments. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as disclosed
therein). Neither the Borrower nor any of its consolidated Subsidiaries
had, at the date of the balance sheets referred to above, any material
Guarantee Obligation, contingent liabilities or liability for taxes,
long-term lease or unusual forward or long-term commitment, including,
without limitation, any material interest rate or foreign currency swap or
exchange transaction, which are not reflected in the foregoing statements
or in the notes thereto.
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6.2 No Change.
Since September 30, 1997, there has been no development or event which has
had a Material Adverse Effect.
6.3 Corporate Existence; Compliance with Law.
Except as disclosed on Schedule 6.3, each of the Company and its
Subsidiaries, including the Borrower, (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has the corporate or partnership power and authority and the legal right to own
and operate all its material property, to lease the material property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation or partnership 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
except to the extent that the failure to so qualify or be in good standing would
not, in the aggregate, have a Material Adverse Effect and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations.
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the Credit Documents to which
it is party. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or with the execution, delivery or
performance of any Credit Document by the Borrower or the other Credit Parties
(other than those which have been obtained) or with the validity or
enforceability of any Credit Document against the Borrower or the Guarantors
(except such filings as are necessary in connection with the perfection of the
Liens created by such Credit Documents). Each Credit Document to which it is a
party has been duly executed and delivered on behalf of the Borrower or the
other Credit Parties, as the case may be. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of the Borrower or the
other Credit Parties, as the case may be, enforceable against the Borrower or
the other Credit Parties, as the case may be, 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).
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6.5 No Legal Bar; No Default.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Company or its
Subsidiaries, including the Borrower (except those as to which waivers or
consents have been obtained), and will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues pursuant to any Requirement of Law or Contractual Obligation other than
the Liens arising under or contemplated in connection with the Credit Documents.
Neither the Company nor any of its Subsidiaries, including the Borrower, is in
default under or with respect to any of its Contractual Obligations in any
respect which would reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.6 No Material Litigation.
Except as set forth in Schedule 6.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower and the other Credit Parties, threatened
by or against the Company or any of its Subsidiaries, including the Borrower, or
against any of its or their respective properties or revenues (a) with respect
to the Credit Documents or any Loan or any of the transactions contemplated
hereby, or (b) which, if adversely determined, would reasonably be expected to
have a Material Adverse Effect.
6.7 Investment Company Act.
Neither the Borrower nor any of the other Credit Parties is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
6.8 Federal Regulations.
No part of the proceeds of any Extension of Credit hereunder will be used
directly or indirectly for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. The Company and its Subsidiaries, including the Borrower, taken as a
group do not own "margin stock" except as identified in the financial statements
referred to in Section 6.1 and the aggregate value of all "margin stock" owned
by the Company and its Subsidiaries taken as a group does not exceed 25% of the
value of their assets.
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6.9 ERISA.
Neither a Reportable Event nor an "accumulated funding deficiency" (within
the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code, except
to the extent that any such occurrence or failure to comply would not reasonably
be expected to have a Material Adverse Effect. No termination of a Single
Employer Plan has occurred resulting in any liability that has remained
underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period which would reasonably be expected to have a Material Adverse
Effect. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount which, as determined in accordance with GAAP,
would reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any Commonly Controlled Entity is currently subject to any liability
for a complete or partial withdrawal from a Multiemployer Plan which would
reasonably be expected to have a Material Adverse Effect.
6.10 Environmental Matters.
Except to the extent that all of the following, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower and the other Credit
Parties, the facilities and properties owned, leased or operated by the
Company or any of its Subsidiaries (the "Properties") do not contain any
Materials of Environmental Concern in amounts or concentrations which (i)
constitute a violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) To the best knowledge of the Borrower and the other Credit
Parties, the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated
by the Borrower or any of its Subsidiaries (the "Business").
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of 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 Business,
nor do the Borrower nor the other Credit Parties have knowledge or reason
to believe that any such notice will be received or is being threatened.
53
(d) To the best knowledge of the Borrower and the other Credit
Parties, Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location which could give rise to liability under any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties 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 knowledge of the Borrower and the other Credit Parties,
threatened, under any Environmental Law to which the Company or any
Subsidiary, including the Borrower, is or will be named as a party with
respect to the Properties or the Business, 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 Properties or the Business.
(f) To the best knowledge of the Borrower and the other Credit
Parties, there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Company or any Subsidiary, including the Borrower,
in connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give rise
to liability under Environmental Laws.
6.11 Use of Proceeds.
The Loans hereunder may be used solely for acquisitions, certain senior
debt prepayment (including redemption of the 12% Senior Notes due 2000), capital
expenditures, working capital and other general corporate purposes not
prohibited by this Credit Agreement.
6.12 Subsidiaries.
Set forth on Schedule 6.12 is a complete and accurate list of all
Subsidiaries of the Company and the Borrower as of the Closing Date. Information
on the attached Schedule includes state of incorporation; the number of shares
of each class of capital stock or other equity interests outstanding; the number
and percentage of outstanding shares of each class of stock; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and similar rights. The outstanding capital stock and other equity
interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned, free and clear of all Liens. The Company and the
Borrower will provide an updated Schedule 6.12 to the Agent quarterly as needed
to reflect changes. Reaffirmation of the representations set out in this Section
6.12 after the Closing Date shall be on the basis of the information contained
in the most recently delivered Schedule 6.12 provided to the Agent hereunder.
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6.13 Taxes.
Each of the Company and its Subsidiaries, including the Borrower, has
filed, or caused to be filed, all material tax returns (Federal, state, local
and foreign) required to be filed and paid all taxes shown thereon to be due
(including interest and penalties) and has paid all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing (or necessary to preserve
any Liens in favor of the Lenders) by them, except for such taxes (i) which are
not yet delinquent or (ii) as are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Except as otherwise disclosed in the financial statements
delivered pursuant to Section 6.1, the Company is not aware of any proposed
material tax assessments against it or any of its Subsidiaries, including the
Borrower.
6.14 Solvency.
The Company and its Subsidiaries, including the Borrower, both collectively
and individually, is and, after execution of this Credit Agreement and after
giving effect to the Indebtedness and Guarantee Obligations incurred hereunder
and the other transactions contemplated hereby, including the transactions
described in subsections 5.1(c) and 5.1(d), will be Solvent.
SECTION 7
AFFIRMATIVE COVENANTS
The Company and the Borrower hereby covenant and agree that on the Closing
Date, and thereafter for so long as this Credit Agreement is in effect and until
the Revolving Commitments have terminated, no Note remains outstanding and
unpaid and the Obligations, together with interest, Commitment Fees and all
other amounts owing to the Agent or any Lender hereunder, are paid in full, the
Borrower shall, and in the case of subsections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 and
7.10 shall cause each of its Subsidiaries, to:
7.1 Financial Statements.
Furnish to the Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in any
event within 90 days after the end of each fiscal year of each of the
Company and the Borrower, a copy of the consolidated balance sheet of the
Company or the Borrower, as appropriate, and its respective consolidated
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows of the Company
or the Borrower, as appropriate, and its respective consolidated
Subsidiaries for such year, audited by KPMG Peat Marwick LLP or other firm
of independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders, setting forth in
each case in comparative form the figures for the previous year, reported
on without a "going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification; and
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(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each of the first three fiscal
quarters of each of the Company and the Borrower, a company-prepared
consolidated balance sheet of the Company or the Borrower, as appropriate,
and its respective consolidated Subsidiaries as at the end of such period
and related company-prepared statements of income and retained earnings and
of cash flows for the Company or the Borrower, as appropriate, and its
respective consolidated Subsidiaries for such quarterly period and for the
portion of the fiscal year ending with such period, in each case setting
forth in comparative form consolidated figures for the corresponding period
or periods of the preceding fiscal year (subject to normal recurring
year-end audit adjustments).
all such financial statements to be complete and correct in all material
respects in accordance with GAAP (subject, in the case of interim statements, to
normal recurring year-end audit adjustments) and to be prepared in reasonable
detail and, in the case of the annual and quarterly financial statements
provided in accordance with subsections (a) and (b) above, in accordance with
GAAP applied consistently throughout the periods reflected therein (except as
approved by such accountants or Responsible Officer, as the case may be, and
disclosed therein) and further accompanied by a description of, and an
estimation of the effect on the financial statements on account of, a change in
the application of accounting principles as provided in Section 1.3.
7.2 Certificates; Other Information.
Furnish to the Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of (i) any Default or Event of Default, except as specified in such
certificate, and (ii) any material difference (other than intercompany
transactions which eliminate in the consolidation of the Company's
financial statements) between the financial statements of the Company and
its Subsidiaries and the financial statements of the Borrower and its
Subsidiaries, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and 7.1(b) above, a certificate of a
Responsible Officer stating that, to the best of such Responsible Officer's
knowledge, the Company or the Borrower, as appropriate, during such period
observed or performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects every material
condition, contained in this Credit Agreement to be observed, performed or
56
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate and, in the case of the Borrower, such certificate shall
include the calculation required to indicate compliance with Section 7.9;
(c) within thirty days after the same are sent, copies of all reports
(other than those otherwise provided pursuant to subsection 7.1) and other
financial information which the Borrower sends to its stockholders, and
within thirty days after the same are filed, copies of all financial
statements and non-confidential reports which the Company may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(d) promptly, such additional financial and other information as the
Agent, on behalf of any Lender, may from time to time reasonably request.
7.3 Payment of Loans.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Company or the Borrower, as appropriate, or its respective
Subsidiaries, as the case may be.
7.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted by
it on the date hereof and, except as permitted by Section 8.4, preserve, renew
and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; comply with all Contractual
Obligations and Requirements of Law applicable to it except to the extent that
failure to comply therewith would not, in the aggregate, have a Material Adverse
Effect.
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7.5 Maintenance of Property; Insurance.
Keep all material property useful and necessary in its business in good
working order and condition (ordinary wear and tear excepted); maintain with
financially sound and reputable insurance companies insurance on all its
material property in at least such amounts and against at least such risks as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to the Agent, upon written request, full
information as to the insurance carried; provided, however, that the Company and
its Subsidiaries, including the Borrower, may maintain self insurance plans to
the extent companies of similar size and in similar businesses do so.
7.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the Agent,
the Agent to visit and inspect any of its properties and examine and make
abstracts from any of its books and records (other than materials protected by
the attorney-client privilege and materials which the Company or the Borrower
may not disclose without violation of a confidentiality obligation binding upon
it) at any reasonable time and as often as may reasonably be desired, and to
discuss the business, operations, properties and financial and other condition
of the Company or the Borrower, as appropriate, and its respective Subsidiaries
with officers and employees of the Company or the Borrower, as appropriate, and
its respective Subsidiaries and with its independent certified public
accountants.
7.7 Notices.
Give notice to the Agent (which shall promptly transmit such notice to each
Lender) of:
(a) immediately (and in any event within two (2) Business Days) after
the Company or the Borrower knows or has reason to know thereof, the
occurrence of any Default or Event of Default;
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(b) promptly, any default or event of default under any Contractual
Obligation of the Company or the Borrower or any of their respective
Subsidiaries, which would reasonably be expected to have a Material Adverse
Effect;
(c) promptly, any litigation, or any investigation or proceeding known
to the Company or the Borrower, affecting the Company or any of their
respective Subsidiaries, including the Borrower which, if adversely
determined, would reasonably be expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within 30 days after the
Company or the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan;
(e) promptly (and in any event within thirty (30) days) after a
transaction which gives rise to a material difference (other than
intercompany transactions which eliminate in the consolidation of the
Company's financial statements) between the financial information of the
Company and its Subsidiaries and the financial information of the Borrower
and its Subsidiaries; and
(f) promptly, any other development or event which would reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company or the Borrower proposes to take with
respect thereto.
7.8 Environmental Laws.
(a) Comply in all material respects with, and 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 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) 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 pendency of such
proceedings would not reasonably be expected to have a Material Adverse
Effect; and
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(c) Defend, indemnify and hold harmless the Agent and the Lenders, and
their respective employees, agents, officers and directors, from and
against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known
or unknown, contingent or otherwise, arising out of, or in any way relating
to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Company, any of its
Subsidiaries, including the Borrower, or the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing arise
out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this paragraph shall survive
repayment of the Notes and all other amounts payable hereunder.
7.9 Financial Covenants.
(a) Fixed Charge Coverage Ratio. There shall be maintained as of the
end of each fiscal quarter a Fixed Charge Coverage Ratio of not less than
1.5:1.0.
(b) Consolidated Funded Debt Ratio. There shall be maintained as of
the end of each fiscal quarter a Consolidated Funded Debt Ratio of not
greater than 3.0:1.0.
(c) Consolidated Net Worth. There shall be maintained as of the end of
each fiscal quarter a Consolidated Net Worth of at least 85% of
Consolidated Net Worth at December 31, 1997 as shown on the annual audited
financial statements of the Borrower as of such date; provided, however,
that the minimum Consolidated Net Worth required hereunder shall be
increased (but not decreased) on the last day of each fiscal year by an
amount equal to (i) 50% of Consolidated Net Income for the fiscal year then
ended beginning with fiscal year 1998 (including the effect, if any, of
extraordinary losses relating to the redemption of the 12% Senior Notes due
2000) and (ii) 50% of the Net Proceeds from any Equity Transaction.
7.10 Additional Subsidiary Guarantors.
Where Domestic Subsidiaries of the Company which are not Credit Parties
hereunder (the "Non-Guarantor Subsidiaries") shall at any time (the "Threshold
Requirement"):
(i) in any instance for any such Non-Guarantor Subsidiary, have assets
in excess of $5,000,000, or
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(ii) in the aggregate for all such Non-Guarantor Subsidiaries,
constitute more than fifteen percent (15%) of consolidated assets for the
Consolidated Group,
then the Company shall within 90 days (A) notify the Agent thereof and cause
such Domestic Subsidiary or Subsidiaries to become a Guarantor by execution of a
Joinder Agreement, such that immediately after joinder as a Guarantor, the
remaining Non-Guarantor Subsidiaries shall not in any instance, or collectively,
exceed the Threshold Requirement, and (B) deliver with the Joinder Agreement,
supporting resolutions, incumbency certificates, corporate formation and
organizational documentation and opinions of counsel as the Agent may reasonably
request.
SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties hereby covenants and agrees that on the Closing
Date, and thereafter for so long as this Agreement is in effect and until the
Revolving Commitments have terminated, no Note remains outstanding and unpaid
and the Obligations, together with interest, Commitment Fees and all other
amounts owing to the Agent or any Lender hereunder, are paid in full, the
Borrower shall, and shall cause each of its Subsidiaries, to:
8.1 Indebtedness.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness existing as of the Closing Date as referenced in the
financial statements referenced in Section 5.1 (and set out more
specifically in Schedule 8.1(b)) and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as of the
date of such renewal, refinancing or extension;
(c) Indebtedness incurred after the Closing Date consisting of Capital
Leases or Indebtedness incurred to provide all or a portion of the purchase
price or cost of construction, expansion or improvement of an asset
provided that (i) such Indebtedness when incurred shall not exceed the
purchase price or cost of construction of such asset; (ii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing plus
reasonable costs and expenses; and (iii) the total aggregate amount of all
such Capital Leases and Indebtedness of the Borrower and its Subsidiaries,
as a group, shall not exceed $4,000,000 at any time outstanding;
(d) Unsecured intercompany Indebtedness between a Credit Party and
another Credit Party;
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(e) Indebtedness and obligations owing under interest rate protection
agreements and currency protection agreements and commodity purchase or
option agreements entered into in order to manage existing or anticipated
interest rate, exchange rate or commodity price risks and not for
speculative purposes;
(f) Subordinated Indebtedness, the terms of subordination and other
terms and provisions of which are acceptable to the Required Lenders in
their discretion;
(g) other Indebtedness of the Borrower which does not exceed
$10,000,000 in the aggregate at any time outstanding.
8.2 Liens.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
8.3 Nature of Business.
The Borrower will not, nor will it permit any Subsidiary to, alter the
character of its business in any material respect from that conducted as of the
Closing Date.
8.4 Consolidation, Merger, Sale or Purchase of Assets.
The Borrower will not, nor will it permit any Subsidiary to:
(a) Enter into a transaction of merger or consolidation, except
(i) a Credit Party may be a party to a transaction of merger or
consolidation with another Credit Party, provided that (A) if the
Borrower is a party thereto, it is the surviving corporation , (B) if
a Guarantor is a party thereto, a Guarantor shall be the surviving
corporation or the surviving corporation shall be a Domestic
Subsidiary and shall become a Guarantor hereunder as an Additional
Credit Party pursuant to Section 7.10 concurrently therewith, and (C)
no Default or Event of Default shall exist either immediately prior to
or immediately after giving effect thereto; and
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(ii) a Credit Party may be a party to a transaction of merger or
consolidation with any other Person, provided that (A) the provisions
of Section 7.10 regarding joinder of certain Subsidiaries as
Additional Credit Parties hereunder shall be complied with, (B) no
Default or Event of Default shall exist either immediately prior to or
immediately after giving effect thereto, and (C) the provisions of
Section 8.4(c) shall be complied with.
(b) Sell, lease, transfer or otherwise dispose of assets, property
and/or operations (including any sale-leaseback transaction, but excluding
Specified Sales), except for any such sale, lease, transfer or other
disposition for fair value in the reasonable determination of the Borrower,
so long as
(i) no Default or Event of Default shall exist, either
immediately prior to or immediately after giving effect thereto, and
(ii) no more than 25% of the gross consideration received in
connection therewith shall consist of Non-Investment Grade debt or
equity interests.
without the prior written consent of the Required Lenders (which consent
shall not be unreasonably withheld or delayed).
(c) Acquire all or any portion of the capital stock or other ownership
interest in any Person which is not a Subsidiary or all or any substantial
portion of the assets, property and/or operations of a Person which is not
a Subsidiary, without the prior written consent of the Required Lenders
(which consent shall not be unreasonably withheld or delayed), unless
(i) in the case of an acquisition of capital stock or other
ownership interest, if after giving effect thereto such Person will
not be a Subsidiary, then such acquisition will not cause a violation
of Section 8.5;
(ii) in the case of an acquisition of capital stock or other
ownership interest, if after giving effect thereto such Person will be
a Subsidiary, or in the case of an acquisition of assets, property
and/or operations, then
(A) the Board of Directors of the Person which is the
subject of the acquisition shall have approved the acquisition;
(B) the Person, division, operations or property which is
the subject of the acquisition is in a reasonably related line of
business to that of the Borrower,
(C) no Default or Event of Default would exist after giving
effect thereto on a Pro Forma Basis; and
(D) the cost of any such acquisition (or series of related
transactions) shall not exceed $50,000,000 in any instance.
(d) in the case of the Company and the Borrower, wind-up or dissolve,
whether voluntarily or involuntarily (or suffer to permit any such
liquidation or dissolution).
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8.5 Advances, Investments and Loans.
Except as otherwise permitted hereunder, the Borrower will not, nor will it
permit any Subsidiary to, lend money or extend credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to, any Person except for
Permitted Investments.
8.6 Transactions with Affiliates.
Except as permitted in subsection (v) of the definition of Permitted
Investments, the Borrower will not, nor will it permit any Subsidiary to, enter
into any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder or Affiliate (other
than a Credit Party) other than on terms and conditions substantially as
favorable as would be obtainable in a comparable arm's-length transaction with a
Person other than an officer, director, shareholder or Affiliate (other than a
Credit Party).
8.7 Ownership of Subsidiaries.
The Borrower will not, nor will it permit any Subsidiary to, create, form
or acquire a Subsidiary, unless any such Domestic Subsidiary shall comply with
the provisions of Section 7.10 or the investment in any such Foreign Subsidiary
shall constitute a Permitted Investment.
8.8 Fiscal Year.
The Borrower will not, nor will it permit any Subsidiary to, change its
fiscal year, except with the prior written consent of the Agent.
8.9 Prepayments of Indebtedness, etc.
The Borrower will not, nor will it permit any Subsidiary to,
(a) amend or modify, or permit the amendment or modification of, any
of the terms of subordination or other terms or provisions relating to any
Subordinated Debt with an aggregate principal amount in excess of
$1,000,000 if such amendment or modification is reasonably adverse to
interests of the Lenders hereunder as holders of indebtedness senior
thereto as determined by Required Lenders in their discretion;
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(b) make (or give notice with respect thereto) any voluntary or
optional payment or prepayment or redemption or acquisition for value
(including, without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying
when due) or exchange of any senior Indebtedness for borrowed money or any
Subordinated Debt, except for (i) any senior Indebtedness for borrowed
money with an aggregate principal amount not in excess of $1,000,000 or any
Subordinated Debt with an aggregate principal amount not in excess of
$1,000,000, or (ii) the payment on or redemption of the 12% Senior Notes
due 2000;
(c) make any prepayment, redemption, acquisition for value (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 Subordinated Debt with an
aggregate principal amount in excess of $1,000,000.
As used herein, "Subordinated Debt" means any indebtedness for borrowed money
which by its terms is, or upon the happening of certain events may become,
subordinated in right of payment to the Obligations hereunder and other amounts
owing hereunder or in connection herewith.
8.10 Dividends.
The Borrower will not make or pay, nor will it permit any non-wholly owned
Subsidiary to make or pay, any Dividend, unless (i) no Default or Event of
Default shall exist either immediately prior to or immediately after giving
effect thereto, and (ii) the Borrower shall have demonstrated compliance with
the financial covenants set out in Section 7.9 on a Pro Forma Basis after giving
effect thereto, except that notwithstanding the foregoing, so long as no Default
or Event of Default shall exist either than immediately prior to or immediately
after giving effect thereto, the Borrower may pay (a) cash dividends of up to
$1,000,000 to the Company for the purpose of repurchasing the Company's equity
securities in any fiscal year pursuant to the Company's employee benefit plans
and (b) cash dividends of up to $2,500,000 to the Company for the sole purpose
of providing loans to officers, directors, employees or Affiliates to pay, on
behalf of such persons, any withholding taxes due and payable by such persons as
a result of the vesting of securities received by such persons in connection
with the exchange of certain debentures at the time of the Company's initial
public offering.
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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) The Borrower shall fail to pay any principal on any Note when due
in accordance with the terms thereof or hereof; or the Borrower shall fail
to reimburse the Issuing Lender for any LOC Obligations when due in
accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Note or any fee or other amount payable hereunder when due
in accordance with the terms thereof or hereof and such failure shall
continue unremedied for five (5) Business Days (or any Guarantor shall fail
to pay on the Guaranty in respect of any of the foregoing or in respect of
any other Guarantee Obligations thereunder); or
(b) Any representation or warranty made or deemed made by the Company,
the Borrower or other Credit Party herein or in any of the other Credit
Documents or which is contained in any certificate, document or financial
or other statement furnished at any time under or in connection with this
Credit Agreement shall prove to have been incorrect, false or misleading in
any material respect on or as of the date made or deemed made; or
(c) The Company or the Borrower shall (i) default in the due
performance or observance of Section 7.9, or (ii) default in any material
respect in the observance or performance of any other term, covenant or
agreement contained in this Agreement (other than as described in
subsections 9.1(a) or 9.1(c)(i) above), and such default shall continue
unremedied for a period of 30 days or more; or
(d) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Notes) in a principal amount outstanding of at least $10,000,000 in the
aggregate for the Borrower and its Subsidiaries or in the payment by any
Credit Party of any matured Guarantee Obligation in a principal amount
outstanding of at least $10,000,000 in the aggregate for the Borrower and
its Subsidiaries beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such Indebtedness
or Guarantee Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness in a principal amount outstanding of at least $10,000,000 in
the aggregate for the Borrower and its Subsidiaries or Guarantee Obligation
in a principal amount outstanding of at least $10,000,000 in the aggregate
for the Borrower and its Subsidiaries or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or
66
(e) (i) The Company or any of its Subsidiaries, including the
Borrower, shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the Company or
any Subsidiary, including the Borrower, shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced against the
Company or any Subsidiary, including the Borrower, any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against the Company or any
Subsidiary, including the Borrower, any case, proceeding other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Company or any Subsidiary, including
the Borrower, shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) the Company or any Subsidiary,
including the Borrower, shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due;
or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid when due or covered by insurance) of $2,000,000 or
more and all such judgments or decrees shall not have been paid and
satisfied, vacated, discharged, stayed or bonded pending appeal within 45
days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a Trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company, any of its
Subsidiaries or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
any Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such
events or conditions, if any, could have a Material Adverse Effect; or
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(h) Either (i) a "person" or a "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934 other than
members of management of the Company as of the Closing Date and other than
Citicorp Venture Capital, Ltd. or its subsidiaries or portfolio companies)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of more than 30% of the then outstanding
voting stock of the Company or (ii) a majority of the Board of Directors of
the Company shall consist of individuals who are not Continuing Directors;
"Continuing Director" means, as of any date of determination, (A) an
individual who on the date two years prior to such determination date was a
member of the Company's Board of Directors and (B) any new Director whose
nomination for election by the Company's shareholders was approved by a
vote of at least 75% of the Directors then still in office who either were
Directors on the date two years prior to such determination date or whose
nomination for election was previously so approved; or
(i) The Guaranty or any provision thereof shall cease to be in full
force and effect or any Credit Party or any Person acting by or on behalf
of any Credit Party shall deny or disaffirm any Credit Party's obligations
under the Guaranty; or
(j) Any other Credit Document shall fail to be in full force and
effect or to give the Agent and/or the Lenders the security interests,
liens, rights, powers and privileges purported to be created thereby
(except as such documents may be terminated or no longer in force and
effect in accordance with the terms thereof, other than those indemnities
and provisions which by their terms shall survive);
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (e) above, automatically the Revolving Commitments shall
immediately terminate and the Loans and LOC Obligations (with accrued interest
thereon), and all other amounts under the Credit Documents (including without
limitation the maximum amount of all contingent liabilities under Letters of
Credit) shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) the Agent may, and upon the written request of the Required Lenders, the
Agent shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) the
Agent may, or upon the written request of the Required Lenders, the Agent shall,
by notice of default to the Borrower, declare the Loans and LOC Obligations
(with accrued interest thereon) and all other amounts owing under this Agreement
and the Notes to be due and payable forthwith and direct the Borrower to pay to
the Agent cash collateral as security for the LOC Obligations for subsequent
drawings under then outstanding Letters of Credit an amount equal to the maximum
amount of which may be drawn under Letters of Credit then outstanding, whereupon
the same shall immediately become due and payable. Except as expressly provided
above in this Section 9, presentment, demand, protest and all other notices of
any kind are hereby expressly waived.
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SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity as Agent hereunder, the "Agent") of such
Lender to act as specified herein and the other Credit Documents, and each such
Lender hereby authorizes the Agent as the agent for such Lender, to take such
action on its behalf under the provisions of this Credit Agreement and the other
Credit Documents and to exercise such powers and perform such duties as are
expressly delegated by the terms hereof and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in the other
Credit Documents, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and none of the Credit Parties shall have any rights
as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit Documents,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation or relationship of agency or trust
with or for the Borrower or any other Credit Party.
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10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other Credit
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent under
or in connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency herefor of any of the other Credit Documents, or
for any failure of the Borrower or the other Credit Parties to perform their
obligations hereunder or thereunder. The Agent shall not be responsible to any
Lender for the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Credit Agreement, or any of the other
Credit Documents or for any representations, warranties, recitals or statements
made herein or therein or made by the Borrower or any Credit Party in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the Credit
Parties to the Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default or to inspect the properties, books or records of the Credit
Parties.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower or any of the other Credit Parties,
independent accountants and other experts selected by the Agent with reasonable
care). The Agent may deem and treat the Lenders as the owner of their respective
interests hereunder for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent in
accordance with Section 11.6(d). The Agent shall be fully justified in failing
or refusing to take any action under this Credit Agreement or under any of the
other Credit Documents unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any of the other Credit Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 11.1, all the Lenders) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
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10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Agent has received
notice from a Lender or a Credit Party referring to the Credit Document,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Agent receives such a notice, the
Agent shall give prompt notice thereof to the Lenders. The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of the
Company or the Borrower, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and the other Credit Parties and made its own decision to make its
Loans hereunder and enter into this Credit Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Credit Agreement, and to
make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower and the other Credit Parties.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Borrower and the other
Credit Parties which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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10.7 Indemnification.
The Lenders agree to indemnify the Agent in its capacity as such (to the
extent not reimbursed by the Borrower and the other Credit Parties and without
limiting the obligation of the Borrower and the other Credit Parties to do so),
ratably according to their respective Revolving Commitment Percentages (or if
the Revolving Commitments have expired or been terminated, in accordance with
the respective principal amounts of outstanding Loans and Participation
Interests of the Lenders), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the termination of this
Credit Agreement) be imposed on, incurred by or asserted against the Agent in
its capacity as such in any way relating to or arising out of this Credit
Agreement or the other Credit Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
10.8 Agent in its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower or any other Credit
Party as though the Agent were not Agent hereunder. With respect to its Loans
and Participation Interests, the Agent shall have the same rights and powers
under this Credit Agreement as any Lender and may exercise the same as though
they were not Agent, and the terms "Lender" and "Lenders" shall include the
Agent in its individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the notice of resignation, as appropriate, then the retiring Agent shall
select a successor Agent provided such successor is a Lender hereunder or a
commercial bank organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations as Agent,
as appropriate, under this Credit Agreement and the other Credit Documents and
the provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
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10.10 Termination of Securities Interests. On the Closing Date, the
security interests granted pursuant to the Security Agreement dated November 21,
1995 given by the Borrower, the Company and the other Guarantors to the Agent
(the "Security Agreement"), and any joinders thereto, will be released by the
Agent and the Lenders and the Security Agreement shall terminate. The Agent is
authorized and directed to take any action as is necessary or appropriate to
give effect to the foregoing sentence.
SECTION 11
MISCELLANEOUS
11.1 Amendments and Waivers.
Neither this Credit Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this subsection.
The Required Lenders may, or, with the written consent of the Required Lenders,
the Agent may, from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Credit Agreement or
the other Credit Documents or (b) waive, on such terms and conditions as the
Required Lenders may specify in such instrument, any of the requirements of this
Credit Agreement or the other Credit Documents or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment, waiver, supplement, modification or release shall (i) reduce the
amount or extend the scheduled date of maturity of any Loan or Note or any
installment thereon, or reduce the stated rate of any interest or fee or any
other amounts payable hereunder (other than interest at the increased
post-default rate) or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any Lender's Revolving
Commitment, in each case without the written consent of each Lender directly
affected thereby, or (ii) amend, modify or waive any provision of this
subsection or modify the percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Credit Agreement, in each case without the
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.14, 9.1(a), 11.4, 11.5,
11.6 or 11.7 without the written consent of each Lender directly affected
thereby, or (iv) amend, modify or waive any provision of Section 10 without the
written consent of the then Agent, or (v) release all or substantially all of
the Guarantors without the written consent of all of the Lenders. Any such
waiver, any such amendment, supplement or modification and any such release
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the other Credit Parties, the Lenders, the Agent and all future
holders of the Notes. In the case of any waiver, the Borrower, the Lenders and
the Agent shall be restored to their former position and rights hereunder and
under the outstanding Loans and Notes and other Credit Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
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11.2 Notices.
Except as otherwise provided in Section 2, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (i) when delivered by
hand, (ii) when transmitted via telecopy (or other facsimile device) on a
Business Day between the hours of 8:30 A.M. and 7:00 P.M. (EST or EDT, as
appropriate) (or on the following Business Day if sent after 7:00 P.M.) to the
number set out herein, (iii) the day following the day on which the same has
been delivered prepaid to a reputable national overnight air courier service, or
(iv) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid, in each case, addressed as
follows in the case of the Borrower and the Agent, and as set forth on Schedule
11.2 in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Credit Parties: c/o Cort Furniture Rental Corporation
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx Xxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
The Agent: NationsBank, N.A.
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
NationsBank, N.A.
0000 Xxxx Xxxx Xxxxxx
0xx Xxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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11.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the Agent
or any Lender, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Credit Agreement and the Notes
and the making of the Loans, provided that all such representations and
warranties shall terminate on the date upon which the Revolving Commitments have
been terminated and all amounts owing hereunder and under any Notes have been
paid in full.
11.5 Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation and execution of, and any amendment, supplement or modification to,
the Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse each Lender and
the Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Credit Agreement, the Notes
and any such other documents, including, without limitation, the reasonable fees
and disbursements of counsel to the Agent and to the Lenders (including
reasonable allocated costs of in-house legal counsel), and (c) on demand, to
pay, indemnify, and hold each Lender and the Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Credit Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender and the
Agent and their Affiliates harmless from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of the
Credit Documents and any such other Documents and the use, or proposed use, of
proceeds of the Loans (all the foregoing, collectively, the "indemnified
liabilities"); provided, however, that the Borrower shall not have any
obligation hereunder to the Agent or any Lender, as the case may be, with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Agent or any such Lender, as the case may be, (ii)
legal proceedings commenced against the Agent or any Lender by any other Lender
or the Agent or its participants or (iii) a breach of any of the Credit
Documents by the Lenders. The agreements in this subsection shall survive
repayment of the Loans, Notes and all other amounts payable hereunder.
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11.6 Successors and Assigns; Participations; Purchasing Lenders.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agent, all future holders of the
Notes and their respective successors and assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this
Credit Agreement or the other Credit Documents without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or
more banks or other entities ("Participants") participating interests in
any Loan owing to such Lender, any Note held by such Lender, any Revolving
Commitment of such Lender, or any other interest of such Lender hereunder.
In the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Credit Agreement to the
other parties to this Credit Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Credit
Agreement, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement. No Lender shall transfer or grant
any participation under which the Participant shall have rights to approve
any amendment to or waiver of this Credit Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
scheduled maturity of any Loan or Note or any installment thereon in which
such Participant is participating, or reduce the stated rate or extend the
time of payment of interest or Fees thereon (except in connection with a
waiver of interest at the increased post-default rate) or reduce the
principal amount thereof, or increase the amount of the Participant's
participation over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default shall not constitute a
change in the terms of such participation, and that an increase in any
Revolving Commitment or Loan shall be permitted without consent of any
Participant if the Participant's participation is not increased as a result
thereof), (ii) release all or substantially all of the Guarantors, or (iii)
consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Credit Agreement. In the case of any such
participation, the Participant shall not have any rights under this Credit
Agreement or any of the other Credit Documents (the Participant's rights
against such Lender in respect of such participation to be those set forth
in the agreement executed by such Lender in favor of the Participant
relating thereto) and all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not sold such participation, provided
that each Participant shall be entitled to the benefits of subsections 3.6,
3.7, 3.8, 3.9 and 11.5 with respect to its participation in the Revolving
Commitments and the Loans outstanding from time to time; provided, that no
Participant shall be entitled to receive any greater amount pursuant to
such subsections than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
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(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell or assign
to any Lender or any affiliate thereof and with the consent of the Agent
(which consent shall not be unreasonably withheld), to one or more
additional banks or financial institutions ("Purchasing Lenders"), all or
any part of its rights and obligations under this Credit Agreement and the
Notes in minimum amounts of $5,000,000 (or, if less, the entire amount of
such Lender's obligations) if the Purchasing Lender is not a Lender
hereunder, or with no minimum amount if the Purchasing Lender is a Lender
hereunder, pursuant to a Commitment Transfer Supplement, executed by such
Purchasing Lender, such transferor Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof so long as no
Event of Default has occurred and is continuing, by the Borrower and the
Agent), and delivered to the Agent for its acceptance and recording in the
Register. Upon such execution, delivery, acceptance and recording, from and
after the Transfer Effective Date specified in such Commitment Transfer
Supplement, (x) the Purchasing Lender thereunder shall be a party hereto
and, to the extent provided in such Commitment Transfer Supplement, have
the rights and obligations of a Lender hereunder with a Revolving
Commitment as set forth therein, and (y) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Credit Agreement (and, in the case
of a Commitment Transfer Supplement covering all or the remaining portion
of a transferor Lender's rights and obligations under this Credit
Agreement, such transferor Lender shall cease to be a party hereto). Such
Commitment Transfer Supplement shall be deemed to amend this Credit
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of
Revolving Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Credit Agreement and the Notes. On or prior to
the Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrower, at its own expense, shall execute and deliver to
the Agent in exchange for the Note delivered to the Agent pursuant to such
Commitment Transfer Supplement a new Note to the order of such Purchasing
Lender in an amount equal to the Revolving Commitment assumed by it
pursuant to such Commitment Transfer Supplement and, unless the transferor
Lender has not retained a Revolving Commitment hereunder, a new Note to the
order of the transferor Lender in an amount equal to the Revolving
Commitment retained by it hereunder. Such new Note shall be dated the
Closing Date and shall otherwise be in the form of the Note replaced
thereby. The Note surrendered by the transferor Lender shall be returned by
the Agent to the Borrower marked "canceled".
(d) The Agent shall maintain at its address referred to in subsection
11.2 a copy of each Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names and addresses of
the Lenders and the Revolving Commitment of, and principal amount of the
Loans owing to, each Lender from time to time.
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The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Credit Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed by a
transferor Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, by the Borrower
and the Agent) together with payment to the Agent (by the transferor Lender
or the Purchasing Lender, as agreed between them) of a registration and
processing fee of $2,500 for each Purchasing Lender listed in such
Commitment Transfer Supplement, and the Notes subject to such Commitment
Transfer Supplement, the Agent shall (i) accept such Commitment Transfer
Supplement, (ii) record the information contained therein in the Register
and (iii) give prompt notice of such acceptance and recordation to the
Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a "Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning
the Borrower and its Affiliates which has been delivered to such Lender by
or on behalf of the Borrower pursuant to this Credit Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in connection
with such Lender's credit evaluation of the Borrower and its Affiliates
prior to becoming a party to this Credit Agreement; in each case subject to
subsection 11.14.
(g) At the time of each assignment pursuant to this subsection 11.6 to
a Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
for Federal income tax purposes, the respective assignee Lender shall
provide to the Borrower and the Agent the appropriate Internal Revenue
Service Forms (and, if applicable, a U.S. Tax Compliance Certificate)
described in Section 3.9.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Credit Agreement (including, without
limitation, any right to payment of principal and interest under any Note)
to any Federal Reserve Bank in accordance with applicable laws.
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11.7 Adjustments; Set-off.
(a) Each Lender agrees that if any Lender (a "benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings
of the nature referred to in clause (e) of Section 9.1, or otherwise) in a
greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender' Loans, or interest
thereon, such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be rescinded,
and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders provided by
law (including, without limitation, other rights of set-off), each Lender
shall have the right, without prior notice to the Borrower or any other
Credit Party, any such notice being expressly waived by the Borrower or any
other Credit Party to the extent permitted by applicable law, upon the
occurrence of any Event of Default, to setoff and appropriate and apply any
and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender
or any branch or agency thereof to or for the credit or the account of the
Borrower or any other Credit Party, or any part thereof in such amounts as
such Lender may elect, against and on account of the obligations and
liabilities of the Borrower or any other Credit Party to such Lender
hereunder and claims of every nature and description of such Lender against
the Borrower or any other Credit Party, in any currency, whether arising
hereunder, under the Notes or under any documents contemplated by or
referred to herein or therein, as such Lender may elect, whether or not
such Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The aforesaid right
of set-off may be exercised by such Lender against the Borrower or any
other Credit Party or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or execution,
judgment or attachment creditor of the Borrower or any other Credit Party,
or against anyone else claiming through or against the Borrower or any
other Credit Party or any such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of set-off
shall not have been exercised by such Lender prior to the occurrence of any
Event of Default. Each Lender agrees promptly to notify the Borrower and
the Agent 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.
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11.8 Table of Contents and Section Headings.
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Credit
Agreement.
11.9 Counterparts.
This Credit Agreement may be executed by one or more of the parties to this
Credit Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Credit Agreement signed by all the
parties shall be lodged with the Borrower and the Agent.
11.10 Severability.
Any provision of this Credit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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11.11 Integration.
This Credit Agreement, the Notes and the other Credit Documents represent
the agreement of the Borrower, the other Credit Parties, the Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent, the Borrower, the
other Credit Parties, or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the Notes.
11.12 Governing Law.
This Credit Agreement and the Notes and the rights and obligations of the
parties under this Credit Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of North
Carolina.
11.13 Consent to Jurisdiction and Service of Process.
All judicial proceedings brought against the Borrower or any other Credit
Party with respect to this Credit Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and, by execution and delivery of this Credit
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Credit
Agreement from which no appeal has been taken or is available. Each of the
Borrower and the other Credit Parties irrevocably agrees that all process in any
such proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in subsection 11.2 or at such
other address of which the Agent shall have been notified pursuant thereto, such
service being hereby acknowledged by the Borrower and the other Credit Parties
to be effective and binding service in every respect. The Borrower, the other
Credit Parties, the Agent and the Lenders irrevocably waive any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens which it may now or hereafter have to the
bringing of any such action or proceeding in any such jurisdiction. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Lender to bring proceedings against the
Borrower or any other Credit Party in the court of any other jurisdiction.
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11.14 Confidentiality.
The Agent and each of the Lenders agrees that it will use its best efforts
not to disclose without the prior consent of the Company (other than to its
employees, Subsidiaries, Affiliates, auditors or counsel or to another Lender)
any information with respect to the Company and its Subsidiaries which is
furnished pursuant to this Credit Agreement, any other Credit Document or any
documents contemplated by or referred to herein or therein and which is
designated by the Company to the Lenders in writing as confidential or as to
which it is otherwise reasonably clear such information is not public, except
that any Lender may disclose any such information (a) as has become generally
available to the public other than by a breach of this subsection 11.14, (b) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or the OCC or similar organizations (whether in
the United States or elsewhere) or their successors or the National Association
of Insurance Commissioners, (c) as may be required or appropriate in response to
any summons or subpoena or any law, order, regulation or ruling applicable to
such Lender, or (d) to any prospective Participant or assignee in connection
with any contemplated transfer pursuant to Section 11.6, provided that such
prospective transferee shall have been made aware of this Section 11.14 and
shall have agreed to be bound by its provisions as if it were a party to this
Credit Agreement.
11.15 Acknowledgments.
Each of the Credit Parties hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Credit Parties arising out of or in connection with
this Credit Agreement and the relationship between Agent and Lenders, on
one hand, and the Credit Parties, on the other hand, in connection herewith
is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the Credit
Parties and the Lenders.
11.16 Waivers of Jury Trial.
Each of the Credit Parties, the Agent and the Lenders hereby irrevocably
and unconditionally waive, to the extent permitted by applicable law, trial by
jury in any legal action or proceeding relating to this Credit Agreement or any
other Credit Document and for any counterclaim therein.
[Remainder of Page Intentionally Left Blank]
82
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: CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By /s/ Xxxxxxx Xxx Xxxxxxxx
Title: Vice President, Finance, Chief
Financial Officer and Secretary
GUARANTORS:
CORT BUSINESS SERVICES CORPORATION,
a Delaware corporation
By /s/ Xxxxxxx Xxx Xxxxxxxx
Title: Vice President, Finance, Chief
Financial Officer and Secretary
LENDERS:
NATIONSBANK, N.A.,
in its capacity as Agent and as
a Lender
By /s/ Xxxxx X. Xxxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
By /s/ Xxxxx X. Taulbact
Title: Senior Vice President
MELLON BANK, N.A.
By /s/ Xxxxxx X. Xxxxxxxx
Title: Vice President
COMERICA BANK
By /s/ Xxxxxxxx X. Xxxxxxx
Title: Vice President
CORESTATES BANK, N.A.
By /s/ Xxxx X. Xxxxx
Title: Vice President
THE FIRST NATIONAL BANK OF MARYLAND
By /s/ Xxxxxx X. Xxxxxxxx
Title: Vice President
HIBERNIA NATIONAL BANK
By /s/ Xxxxx X. Xx Xxxxxx
Title: Senior Vice President
THE SUMITOMO BANK, LTD.
By /s/ Xxxxx X. Xxxxx
Title: Vice President and Manager
THE SUMITOMO BANK, LTD.
By /s/ Xxxxx X. Xxxxxxx
Title: Vice President
83
Schedule 2.1(a)
Schedule of Lenders and
Revolving Commitments
Revolving Revolving LOC LOC
Committed Commitment Committed Commitment
Lender Amount Percentage Amount Percentage
------ -------- ---------- -------- ----------
NationsBank, N.A. $17,500,000 23.33% $1,633,333.31 23.33%
Mellon Bank, N.A. $12,500,000 16.67% $1,166,666.67 16.67%
First Union National Bank $12,500,000 16.67% $1,166,666.67 16.67%
Comerica Bank $ 6,500,000 8.67% $ 606,666.67 8.67%
CoreStates Bank, N.A. $ 6,500,000 8.67% $ 606,666.67 8.67%
The First National Bank of Maryland $ 6,500,000 8.67% $ 606,666.67 8.67%
Hibernia National Bank $ 6,500,000 8.67% $ 606,666.67 8.67%
The Sumitomo Bank, Ltd. $ 6,500,000 8.67% $ 606,666.67 8.67%
----------- ----- ------------- -----
$75,000,000 100.0% $7,000,000.00 100.0%
SCHEDULE 2.1(b)(i)
Form of Borrowing Notice for Revolving Loans and Swingline Loans
[Date]
NationsBank, N.A., NationsBank, N.A.,
as Agent under the Credit as Swingline Lender under the
Agreement referred to below Credit Agreement referred to below
000 X. Xxxxx Xxxxxx 000 X. Xxxxx Xxxxxx
Independence Center, 15th Floor Independence Center, 15th Floor
NC1-001-15-04 NC1-001-15-04
Charlotte, North Carolina 28255 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Corporate Credit Support
Gentlemen:
Pursuant to subsection 2.1(b) or 2.2(b) of the Credit Agreement (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") dated as of February 13, 1998 among CORT FURNITURE RENTAL
CORPORATION, a Delaware corporation (the "Borrower"), CORT BUSINESS SERVICES
CORPORATION, a Delaware corporation (the "Company") and certain of its
Subsidiaries as guarantors (together with the Company, the "Guarantors"), the
banks and other financial institutions from time to time parties thereto (the
"Lenders") and NationsBank, N.A., as Agent for the Lenders, the Borrower hereby
requests that the following Revolving Loans or Swingline Loans be made on [date]
as follows (the "Proposed Borrowing"):
Loan Requested:
_______ Revolving Loan
_______ Swingline Loan
(1) Total Amount of Loans............................ $
(2) Amount of (1) to be allocated
to Eurodollar Loans.............................. $
(REVOLVING LOANS ONLY)
(3) Amount of (1) to be allocated
to Base Rate Loans............................... $
(4) Interest Periods and amounts to be allocated
thereto in respect of Eurodollar Tranches
(amounts must total (2)):
(i) one month.................................. $
(ii) two months................................. $
(iii) three months............................... $
(iv) six months................................. $
Total Eurodollar Loans..................... $
NOTE: REVOLVING LOAN BORROWINGS MUST BE IN MINIMUM AMOUNTS OF $3,000,000 AND
$1,000,000 INCREMENTS IN EXCESS THEREOF IN THE CASE OF EURODOLLAR LOANS
AND $1,000,000 AND $1,000,000 INCREMENTS IN EXCESS THEREOF, IN THE CASE
OF BASE RATE LOANS.
Terms defined in the Credit Agreement shall have the same meanings when
used herein.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the-date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the Proposed Borrowing and to the application of the proceeds thereof, with
the same effect as though such representations and warranties had been made
on and as of the date of such Proposed Borrowing (it being understood that
any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date); and
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
CORT FURNITURE RENTAL CORPORATION
By:
Title:
SCHEDULE 2.1(f)
Form of Revolving Note
February __, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of ______________________, and its successors and assigns, on or before
the Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February __, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By:
Name:
Title:
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of NATIONSBANK, N.A., and its successors and assigns, on or before the
Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of CORESTATES BANK, N.A., and its successors and assigns, on or before the
Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of COMERICA BANK, and its successors and assigns, on or before the
Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of HIBERNIA NATIONAL BANK, and its successors and assigns, on or before
the Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of SUMITOMO BANK, LTD., and its successors and assigns, on or before the
Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of MELLON BANK, N.A., and its successors and assigns, on or before the
Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of FIRST NATIONAL BANK OF MARYLAND, and its successors and assigns, on or
before the Termination Date to the office of the Administrative Agent in
immediately available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
Revolving Note
February 13, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of FIRST UNION NATIONAL BANK, and its successors and assigns, on or before
the Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement,
(i) in the case of Revolving Loans, such Lender's Revolving Committed
Amount or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Swingline Loans, if such lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans made to the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified, the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, the Guarantors
and Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
CORT FURNITURE RENTAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Chief Financial Officer and
Secretary
SCHEDULE 2.2(a)
Existing Letters of Credit
Outstanding
Issuing Bank LC # Beneficiary Type Amount Issue Date Expiry Date
------------ ---- ----------- ---- ------ ---------- -----------
NationsBank L900830 Hartford Fire Insurance S $1,822,795.00 12-18-95 12-18-98
NationsBank L901050 American MFG Mutual S $ 197,145.00 12-22-95 12-22-98
NationsBank L901060 Home Insurance Co S $ 96,457.00 12-22-95 12-22-98
NationsBank L972034 Lumbermans Mutual S $ 675,000.00 01-29-98 01-29-99
SCHEDULE 3.2
Form of Notice for Conversion/Extension of Revolving Loans
[Date]
NationsBank, N.A.,
as Agent under the Credit Agreement
referred to below
000 X. Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Corporate Support Services
Gentlemen:
Pursuant to subsection 3.2 of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
dated as of February 13, 1998 among CORT FURNITURE RENTAL CORPORATION, a
Delaware corporation (the "Borrower"), CORT BUSINESS SERVICES CORPORATION, a
Delaware corporation (the "Company") and certain of its Subsidiaries as
guarantors (together with the Company, the "Guarantors"), the banks and other
financial institutions from time to time parties thereto (the "Lenders") and
NationsBank, N.A., as Agent for the Lenders, the Borrower hereby requests
conversion or extension of the following Revolving Loans be made on [date] as
follows (the "Proposed Conversion/Extension"):
(1) Total Amount of Loans to be
converted/extended....................................... $
(2) Amount of (1) to be allocated
to Eurodollar Loans...................................... $
(3) Amount of (1) to be allocated
to Base Rate Loans....................................... $
(4) Interest Periods and amounts to be allocated thereto in
respect of Eurodollar Tranches (amounts must total (2)):
(i) one month.......................................... $
(ii) two months......................................... $
(iii) three months....................................... $
(iv) six months......................................... $
Total Eurodollar Loans............................. $
NOTE: EACH AMOUNT APPEARING IN EACH LINE ABOVE MUST BE AT LEAST EQUAL TO
$3,000,000 AND IN WHOLE MULTIPLES OF $1,000,000 IN EXCESS THEREOF
Terms defined in the Credit Agreement shall have the same meanings when
used herein.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the-date of the Proposed
Conversion/Extension:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the Proposed Conversion/Extension and to the application of the proceeds
thereof, with the same effect as though such representations and warranties
had been made on and as of the date of such Proposed Conversion/Extension
(it being understood that any representation or warranty which by its terms
is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date); and
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Conversion/Extension or from the
application of the proceeds thereof.
Very truly yours,
CORT FURNITURE RENTAL CORPORATION
By:
Title:
SCHEDULE 3.10
Section 3.10 Certificate
Reference is hereby made to the Credit Agreement, dated as of February 13,
1998, among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation, (the
"Borrower"), CORT BUSINESS SERVICES CORPORATION, a Delaware corporation (the
"Company") and certain of its Subsidiaries, as guarantors (together with the
Company, the "Guarantors"), the several banks and other financial institutions
from time to time parties to this Agreement (collectively, the "Lenders";
individually, a "Lender") and as agent for the Lenders hereunder (in such
capacity, the "Agent") (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Pursuant to the provisions of Section 3.10 of
the Credit Agreement, the undersigned hereby certifies that it is not a "bank"
as such term is used in Section 881(c)(3)(A) of the Internal Revenue Code of
1986, as amended.
(NAME OF LENDER]
By:
Name:
Title:
SCHEDULE 5.1(g)
Form of Certificate of Secretary of the Borrower
SECRETARY'S CERTIFICATE
Pursuant to Section 5.1(g) of the Credit Agreement (the "Credit
Agreement"), dated as of February 13, 1998, among CORT FURNITURE RENTAL
CORPORATION, a Delaware corporation (the "Borrower"), CORT BUSINESS SERVICES
CORPORATION, a Delaware corporation (the "Company") and certain of its
Subsidiaries as guarantors (together with the Company, the "Guarantors"), the
banks and other financial institutions from time to time parties thereto (the
"Lenders") and NationsBank, N.A., as agent for the Lenders (in such capacity,
the "Agent"), the undersigned ____________ of _________________ hereby certifies
as follows:
1. Attached hereto as Annex I is a true and complete copy of resolutions
duly adopted by the Board of Directors of ______________ on ___________ 199__,
and such resolutions have not in any way been rescinded or modified and have
been in full force and effect since their adoption to and including the date
hereof and are now in full force and effect; and such resolutions are the only
corporate proceedings of _____________________ now in force relating to or
affecting the matters referred to therein.
2. Attached hereto as Annex II is a true and complete copy of the By-laws
of _____________________ as in effect at all times since _______________ to and
including the date hereof.
3. Attached hereto as Annex III is a true and complete copy of the Restated
Certificate of Incorporation of _____________________ and all amendments thereto
as in effect on the date hereof.
4. The following person is now a duly elected and qualified officer of
____________________________, holding the office indicated next to his name
below, and such officer has held such office with ____________________ at all
times since ___________ to and including the date hereof, and the signature
appearing opposite his name below is his true and genuine signature, and such
officer is duly authorized to execute and deliver on behalf of _____________ the
Credit Agreement [and the Notes to be issued pursuant thereto] and to act as a
Responsible Officer on behalf of _____________________ under the Credit
Agreement:
Name Office Signature
IN WITNESS WHEREOF, the undersigned has hereunto set his/her name and
affixed the corporate seal of ______________________.
____________________________ of
________________________
(CORPORATE SEAL)
Date: _______________, 199__
I, ________________, _______________ of ______________________, hereby
certify that ______________, whose genuine signature appears above, is, and has
been at all times since ______________, a duly elected, qualified and acting
_______________ of ____________________________.
____________________________ of
________________________
_________________, 199__
Schedule 6.3
The Borrower is in the process of merging the McGreggor Corporation
("McGreggor") and Xxxxxx Investment Company ("Xxxxxx") into the Borrower, with
the Borrower as the surviving corporation. The mergers have been approved by the
State of Delaware, but the mergers are pending in the states of Mississippi and
Arizona (for McGreggor and Xxxxxx, respectively) until annual reports for each
McGreggor and Xxxxxx are filed and the companies are in good standing. It is
expected that the mergers will be completed shortly after the Closing.
Schedule 6.6
None other than as described in the Company's reports filed with the Securities
and Exchange Commission.
Schedule 6.12
Subsidiaries of the Company
---------------------------
No. Shares of Percentage
Name State of Incorp. Capital Stock Owner Ownership
---- ---------------- ------------- ----- ---------
Cort Furniture Delaware Cort Business 100%
Rental Corporation Services
("Borrower") Corporation
Subsidiaries of Borrower
------------------------
None, pending the mergers described on Schedule 6.3
Schedule 7.10
Form of Joinder Agreement
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________, 19__,
is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N.A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of February 13, 1998, by
and among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation (the
"Borrower"), CORT BUSINESS SERVICES CORPORATION, a Delaware corporation (the
"Company") and certain other Credit Parties party thereto, the Lenders party
thereto and NationsBank, N.A., as Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Borrower and the other Credit Parties are required by Section 7.10 of the Credit
Agreement to cause the Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Subsidiary will be deemed to be a
party to the Credit Agreement and a "Guarantor" for all purposes of the
Credit Agreement and the other Credit Documents, and shall have all of the
obligations of a Guarantor thereunder as if it had executed the Credit
Agreement and the other Credit Documents. The Subsidiary hereby ratifies,
as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Credit Documents, including
without limitation (i) all of the representations and warranties of the
Credit Parties set forth in Section 6 of the Credit Agreement, (ii) all of
the affirmative and negative covenants set forth in Sections 7 and 8 of the
Credit Agreement and (iii) all of the undertakings and waivers set forth in
Section 4 of the Credit Agreement. Without limiting the generality of the
foregoing terms of this paragraph 1, the Subsidiary hereby (i) jointly and
severally together with the other Guarantors, guarantees to each Lender and
the Agent, as provided in Section 4 of the Credit Agreement, the prompt
payment and performance of the 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 and (ii) agrees that if any of the Credit Party
Obligations are not paid or performed in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Subsidiary will, jointly and severally
together with the other Guarantors, promptly pay and perform the same,
without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the 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.
2. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together
shall constitute one contract.
IN WITNESS WHEREOF, the Subsidiary has caused this Agreement to be duly
executed by its authorized officers, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.
[SUBSIDIARY]
By
Title
Acknowledged and accepted:
NATIONSBANK, N.A.
as Agent
By
Title
Schedule 8.1(b)
Borrower's 12% Senior Notes due 2000 in aggregate principal amount of
$49,932,000.
Schedule 11.2
Lenders and Addresses
Eurodollar
Address Domestic Lending
Lender for Notices Lending Office Office
------ ----------- -------------- ----------
NationsBank, N.A. NationsBank, N.A. NationsBank, N.A. NationsBank, N.A.
000 X. Xxxxx Xxxxxx 000 X. Xxxxx Xxxxxx 000 X. Xxxxx Xxxxxx
NC1-001-15-04 NC1-001-15-04 NC1-001-15-04
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx Xxxxxx Attn: Xxx Xxxxxx Attn: Xxx Xxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax: (000) 000-0000
with a copy to:
NationsBank, N.A.
0000 Xxxx Xxxx Xxxxxx
0xx Xxxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Mellon Bank, X.X. Xxxxxx Bank, X.X. Xxxxxx Bank, X.X. Xxxxxx Bank, N.A.
00 X. Xxxxxx Xxxxxx 00 X. Xxxxxx Xxxxxx 00 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx Attn: Xxxxxx Xxxxxxxx Attn: Xxxxxx Xxxxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax: (000) 000-0000
First Union National Bank First Union National Bank First Union National Bank First Union National Bank
0000 Xxxxx Xxxxxx Xxxx 0000 Xxxxx Xxxxxx Xxxx Xxx Xxxxxxxxxxx
XxXxxx, Xxxxxxxx 00000 XxXxxx, Xxxxxxxx 00000 Xxxxxx, XX0X0XX Xxxxxxx
Attn: Xxxxx X. Xxxxxxxx, III Attn: Xxxxx X. Xxxxxxxx, III Attn:
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone:
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax:
Comerica Bank Comerica Bank Comerica Bank Comerica Bank
U.S. Banking East U.S. Banking East U.S. Banking East
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
XX 0000 MC 0000 XX 0000
Xxxxxxx, Xxxxxxxx 00000-0000 Detroit, Michigan 48275-3280 Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx Attn: Xxxxxx X. Xxxxx Attn: Xxxxxx X. Xxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax: (000) 000-0000
Eurodollar
Address Domestic Lending
Lender for Notices Lending Office Office
------ ----------- -------------- ----------
CoreStates Bank, N.A. CoreStates Bank, N.A. CoreStates Bank, N.A. CoreStates Bank, N.A.
0000 Xxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx
FC 1-8-3-16 FC 1-8-3-16 FC 1-8-3-16
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx Attn: Xxxx X. Xxxxx Attn: Xxxx X. Xxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax: (000) 000-0000
The First National The First National Bank of Maryland The First National Bank of MD The First National Bank of MD
Bank of Maryland 000-00xx Xxxxxx X.X. 000-00xx Xxxxxx X.X. 601-13th Street N.W.
Xxxxx 0000 Xxxxx Xxxxx 0000 Xxxxx Xxxxx 0000 Xxxxx
Xxxxxxxxxx, X.X. 20005 Washington, D.C. 20005 Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxxx Attn: Xxxxxx X. Xxxxxxxx Attn: Xxxxxx X. Xxxxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax: (000) 000-0000
Hibernia National Bank Hibernia National Bank Hibernia National Bank Hibernia National Bank
000 Xxxxxxxxxx Xxxxxx 000 Xxxxxxxxxx Xxxxxx 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000 Xxx Xxxxxxx, Xxxxxxxxx 00000 Xxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx Attn: Xxxx X. Xxxxxxxxxx Attn: Xxxx X. Xxxxxxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax: (000) 000-0000
The Sumitomo Bank, Ltd. The Sumitomo Bank, Ltd. The Sumitomo Bank, Ltd. The Sumitomo Bank, Ltd.
000 X. Xxxxxxxxx Xxxxxx 000 Xxxxx Xxxxxx Xxxxx 233 South Xxxxxx Drive
Suite 1920 Suite 5400 Suite 5400
Baltimore, Maryland 21202 Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx Attn: Xxxxx Xxxxxxxx Attn: Xxxxx Xxxxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 Fax: (000) 000-0000
SCHEDULE 11.6(c)
Form of Commitment Transfer Supplement
COMMITMENT TRANSFER SUPPLEMENT
Reference is made to the Credit Agreement, dated as of February 13, 1998
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation
(the "Borrower"), CORT BUSINESS SERVICES CORPORATION, a Delaware corporation
(the "Company") and certain of its Subsidiaries as guarantors (together with the
Company, the "Guarantors"), the banks and financial institutions from time to
time parties thereto and NationsBank, N.A., as agent for the Lenders (in such
capacity, the "Agent"). Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
___________________________________ (the "transferor Lender") and
_________________________ the "Purchasing Lender") agree as follows:
1. The transferor Lender hereby irrevocably sells and assigns to the
Purchasing Lender without recourse to the transferor Lender, and the Purchasing
Lender hereby irrevocably purchases and assumes from the transferor Lender
without recourse to the transferor Lender, as of the Transfer Effective Date (as
defined below), a _____% interest (the "Assigned Interest") in and to the
transferor Lender's rights and obligations under the Credit Agreement and the
other Credit Documents with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 attached hereto (individually,
an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on such Schedule 1.
2. The transferor Lender (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto, other than that the
transferor Lender has not created any adverse claim upon the interest being
assigned by it hereunder and that such interest is free and clear of any such
adverse claim; (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower, any of
its Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto; and (c)
attaches hereto any Notes held by it evidencing the Assigned Facilities and (i)
requests that the Agent exchange the attached Note for a new Note payable to the
Purchasing Lender and (ii) if the transferor Lender has retained any interest in
the Assigned Facility, requests that the Agent exchange the attached Note for a
new Notes payable to the transferor Lender and to the Purchasing Lender, as
applicable, in each case in amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Transfer Effective Date).
3. The Purchasing Lender (a) represents and warrants that it is legally
authorized to enter into this Commitment Transfer Supplement and has not relied
on the Agent or transferor Lender in making any credit decision; (b) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in subsection 3.1 thereof, the financial
statements delivered pursuant to subsection 5.1 thereof, if any, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Commitment Transfer Supplement; (c)
agrees that it will, independently and without reliance upon the transferor
Lender, the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement, the other loan documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender including, if it
is organized under the laws of a jurisdiction outside the United States, its
obligations pursuant to subsection 2.18 of the Credit Agreement.
4. The effective date of this Commitment Transfer Supplement shall be
________ ___, 19__ (the "Transfer Effective Date"). Following the execution of
this Commitment Transfer Supplement, it will be delivered to the Agent for
acceptance by it and recording by the Agent pursuant to the Credit Agreement,
effective as of the Transfer Effective Date (which shall not, unless otherwise
agreed to by the Agent, be earlier than five Business Days after the date of
such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the Transfer
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Purchasing Lender whether such amounts have accrued prior to the Transfer
Effective Date or accrue subsequent to the Transfer Effective Date. The
transferor Lender and the Purchasing Lender shall make all appropriate
adjustments in payments by the Agent for periods prior to the Transfer Effective
Date or, with respect to the making of this assignment, directly between
themselves.
6. From and after the Transfer Effective Date, (a) the Purchasing Lender
shall be a party to the Credit Agreement and, to the extent provided in this
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder and under the other Credit Documents and shall be bound by the
provisions thereof and (b) the transferor Lender shall, to the extent provided
in this Commitment Transfer Supplement, relinquish its rights (except for its
rights of indemnity to the Transfer Effective Date which shall survive) and be
released from its obligations under the Credit Agreement.
7. This Commitment Transfer supplement shall be governed by and construed
in accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer
Supplement to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
SCHEDULE 1
TO COMMITMENT TRANSFER SUPPLEMENT
RELATING TO THE CREDIT AGREEMENT, DATED AS OF NOVEMBER 21, 1995,
AMONG
CORT FURNITURE RENTAL CORPORATION,
CERTAIN OF ITS SUBSIDIARIES,
THE LENDERS NAMED THEREIN
AND
NATIONSBANK, N.A., AS AGENT FOR THE LENDERS
(IN SUCH CAPACITY, THE "AGENT")
--------------------------------------------------------------------------------
Name of transferor Lender:
Name of Purchasing Lender:
Transfer Effective Date of Assignment:
Credit Principal Revolving Commitment Percentage
Facility Assigned Amount Assigned Assigned(1)
----------------- --------------- -----------
$-------------- ----.--------------%
[NAME OF PURCHASING LENDER] [NAME OR TRANSFEROR LENDER]
By___________________________ By___________________________
Name: Name:
Title: Title:
Accepted: Consented to:
NATIONSBANK, N.A. CORT FURNITURE RENTAL CORPORATION
By___________________________ By___________________________
Name: Name:
Title: Title:
(1) Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
