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EXHIBIT 10.17
CREDIT AGREEMENT
Dated as of September 30, 1996
among
PERSONNEL GROUP OF AMERICA, INC.
as Borrower,
THE SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N.A.,
as Agent
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1.3 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2 CREDIT FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.2 Letter of Credit Subfacility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES . . . . . . . . . . . . . . . . . . . . . 32
3.1 Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.2 Extension and Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.3 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.4 Termination and Reduction of Committed Amount . . . . . . . . . . . . . . . . . . . . . . 34
3.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.6 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.7 Inability To Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.8 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.9 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.11 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.12 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.13 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.14 Payments, Computations, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.15 Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.16 Mandatory Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4 GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.1 The Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.2 Obligations Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.3 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.4 Certain Additional Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.6 Rights of Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.7 Continuing Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.1 Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.2 Conditions to all Extensions of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 51
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SECTION 6 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.2 No Change; Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.3 Organization; Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . 54
6.4 Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . 54
6.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.10 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.13 Governmental Regulations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.15 Purpose of Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.1 Information Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.2 Preservation of Existence and Franchises . . . . . . . . . . . . . . . . . . . . . . . . 63
7.3 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.4 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.5 Payment of Taxes and Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.7 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.8 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.10 Audits/Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.11 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.12 Additional Credit Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.13 Ownership of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.3 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc. . . . . . . . . . . . . . . . . . 67
8.5 Advances, Investments, Loans, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.6 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.7 Prepayments of Indebtedness, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.8 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.9 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.10 Limitation on Restrictions on Subsidiary Dividends and Other Distributions, etc. . . . . 69
8.11 Issuance and Sale of Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.12 Sale Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.13 No Further Negative Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.14 No Foreign Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
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SECTION 9 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.2 Acceleration; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10 AGENCY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.4 Reliance on Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.6 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.8 Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.2 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.3 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.4 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.5 Payment of Expenses, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.6 Amendments, Waivers and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.9 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.10 Governing Law; Submission to Jurisdiction; Venue . . . . . . . . . . . . . . . . . . . . 84
11.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.12 Entirety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.13 Binding Effect; Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.15 Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 1.1C Form of Pledge Agreement
Schedule 2.1(a) Lenders
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Committed Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(j) Form of Legal Opinion
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.14 Subsidiaries
Schedule 7.1(c)(i) Form of Officer's Compliance Certificate
Schedule 7.1(c)(ii) Form of Officer's Compliance Certificate
Schedule 7.12 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 11.3 Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of September 30, 1996 (the "Credit
Agreement"), is by and among PERSONNEL GROUP OF AMERICA, INC., a Delaware
corporation (the "Borrower"), the subsidiaries of the Borrower identified on
the signature pages hereto and such other subsidiaries as may from time to time
become a party hereto (the "Guarantors"), the several lenders identified on the
signature pages hereto and such other lenders as may from time to time become a
party hereto (the "Lenders") and NATIONSBANK, N.A., as agent for the Lenders
(in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$100,000,000 credit facility for the purposes hereinafter set forth;
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions. As used in this Credit Agreement, the following
terms shall have the meanings specified below unless the context otherwise
requires:
"Acquired Assets" means the assets of BEST and its
Subsidiaries.
"Acquisition Documents" means a collective reference to the
Purchase Agreement, the Acquisition Note, the Subordination Agreement
and all other related agreements and documents issued or delivered
thereunder or pursuant thereto.
"Acquisition Note" means that certain promissory note, dated
as of September 30, 1996, executed by the Borrower to the order of
BEST in the principal amount of $10,950,000, as such promissory note
may be amended, modified, restated or replaced from time to time.
"Acquisition" means the acquisition by the Borrower, directly
or through a Subsidiary, of the Acquired Assets.
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"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person or (ii)
directly or indirectly owning or holding five percent (5%) or more of
the equity interest in such Person. For purposes of this definition,
"control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N.A.,
NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attn: Agency Services, or such other address as may be
identified by written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement,
dated as of September 20, 1996, between the Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(c).
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Loan or the applicable
rate of the Unused Fee for any day for purposes of Section 3.5(a) or
the applicable rate of the Standby Letter of Credit Fee for any day
for purposes of Section 3.5(b)(i) or the applicable rate of the Trade
Letter of Credit Fee for any day for purposes of Section 3.5(b)(ii),
the appropriate applicable percentage corresponding to the
Consolidated Leverage Ratio in effect as of the most recent
Calculation Date:
===================================================================================================================================
Applicable
Applicable Percentage for
Consolidated Percentage for Standby Letter of Applicable Percentage
Pricing Level Leverage Ratio Eurodollar Loans Credit Fee for Unused Fee
------------------------------------------------------------------------------------------------------------------------------------
I Less than or equal to 0.75:1.00 0.625% 0.625% 0.250%
------------------------------------------------------------------------------------------------------------------------------------
II Greater than 0.75:1.00, but less than or 0.875% 0.875% 0.250%
equal to 1.50:1.00
------------------------------------------------------------------------------------------------------------------------------------
III Greater than 1.50:1.00, but less than or 1.125% 1.125% 0.375%
equal to 2.25:1.00
------------------------------------------------------------------------------------------------------------------------------------
IV Greater than 2.25:1.00 1.350% 1.350% 0.500%
====================================================================================================================================
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The Applicable Percentages shall be determined and adjusted on the
date (each a "Calculation Date") five Business Days after each date by
which the Borrower is required to provide an officer's certificate in
accordance with the provisions of Section 7.1(c); provided, however
that (i) the initial Applicable Percentages shall be based on Pricing
Level III (as shown above) and shall remain at Pricing Level III until
the first Calculation Date subsequent to the Closing Date and,
thereafter, the Pricing Level shall be determined by the then current
Consolidated Leverage Ratio, and (ii) if the Borrower fails to provide
any officer's certificate to the Agency Services Address as required
by Section 7.1(c), the Applicable Percentage from such Calculation
Date shall be based on Pricing Level IV until such time as an
appropriate officer's certificate is provided, whereupon the Pricing
Level shall be determined by the then current Consolidated Leverage
Ratio. Each Applicable Percentage shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in
the Applicable Percentages shall be applicable to all existing Loans
as well as any new Loans made or issued.
"Asset Sale" means any sale, lease, transfer or other
disposition (including any such transaction effected by way of merger,
amalgamation or consolidation) by the Borrower or any of its
Subsidiaries subsequent to the date hereof of any asset (including
stock in Subsidiaries of the Borrower), including without limitation
any sale leaseback transaction (whether or not involving a Capital
Lease), but excluding (a) the sale of inventory in the ordinary course
of business for fair consideration, (b) the sale or disposition of
machinery and equipment no longer used or useful in the conduct of
such Person's business, and (c) the sale of any asset having a net
book value of less than $50,000.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or
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hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or ordering the winding up
or liquidation of its affairs; or (ii) there shall be commenced
against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, or any case, proceeding or other action for the appointment of
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall
remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If
for any reason the Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"BEST" means Business Enterprise Systems and Technology, Inc., a
Washington corporation.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
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"Borrower's Obligations" means, without duplication, (i) all
of the obligations of the Borrower to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes or any of the other Credit Documents and (ii) all
liabilities and obligations, whenever arising, owing from the Borrower
to any Lender, or any Affiliate of a Lender, arising under any Hedging
Agreement.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina are
authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in
London, England, Charlotte, North Carolina and New York, New York.
"Calculation Date" has the meaning set forth in the definition
of Applicable Percentage.
"Calculation Period" means (i) as of December 31, 1996, the
fiscal quarter ending on such date, (ii) as of March 31, 1997, the
two-quarter period ending on such date, (iii) as of June 30, 1997, the
three-quarter period ending on such date and (iv) as of the last day
of any fiscal quarter occurring after July 1, 1997, the four-quarter
period ending on such date.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for
as a capital lease on the balance sheet of that Person.
"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, or (ii) any domestic
commercial bank of recognized standing (y) having capital and surplus
in excess of $500,000,000 and (z) whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from
Xxxxx'x is at least P-1 or the equivalent thereof (any such bank being
an "Approved Lender"), in each case with maturities of not more than
270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Lender (or by the
parent company thereof) and maturing within six months of the date of
acquisition, (d) repurchase agreements entered into by a Person with a
bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500,000,000
for direct obligations
- 5 -
10
issued by or fully guaranteed by the United States of America in which
such Person shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the
repurchase obligations, (e) obligations of any 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- or Aa-3 by S&P or
Moody's, respectively, and maturing within three years from the date
of acquisition thereof, (f) Investments in municipal auction preferred
stock (i) rated AAA (or the equivalent thereof) or better by S&P or
Aaa (or the equivalent thereof) or better by Moody's and (ii) with
dividends that reset at least once every 365 days and (g) Investments,
classified in accordance with GAAP as current assets, in money market
investment programs registered under the Investment Company Act of
1940, as amended, which are administered by reputable financial
institutions having capital of at least $100,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a), (b), (c), (e) and (f).
"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control
over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 20% or more of the combined
voting power of all Voting Stock of the Borrower, or (ii) during any
period of up to 24 consecutive months, commencing after the Closing
Date, individuals who at the beginning of such 24 month period were
directors of the Borrower (together with any new director whose
election by the Borrower's Board of Directors or whose nomination for
election by the Borrower's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of the Borrower then
in office. As used herein, "beneficial ownership" shall have the
meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed also to refer to
any successor sections.
- 6 -
11
"Collateral" means a collective reference to the collateral
which at any time will be covered by the Collateral Documents.
"Collateral Documents" means a collective reference to the
Pledge Agreement and such other documents executed and delivered in
connection with the attachment and perfection of the Agent's security
interests and liens arising thereunder, including without limitation,
UCC financing statements.
"Commitment" means (i) with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Committed Amount, (A) to make Loans in accordance with the provisions
of Section 2.1(a) and (B) to purchase participation interests in
Letters of Credit in accordance with the provisions of Section 2.2(c)
and (ii) with respect to the Issuing Lender, the LOC Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Committed Amount" shall have the meaning assigned to such term
in Section 2.1(a).
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Borrower and its Subsidiaries on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Consolidated Current Assets" means, for any date, all assets
which would, in accordance with GAAP, be classified on a consolidated
balance sheet of the Borrower and its Subsidiaries as current assets,
after deducting adequate reserves in each case where a reserve is
appropriate in accordance with GAAP.
"Consolidated Current Liabilities" means, for any date, all
liabilities of the Borrower and its Subsidiaries which would, in
accordance with GAAP, be classified on a consolidated balance sheet of
the Borrower and its Subsidiaries as current liabilities.
"Consolidated Current Ratio" means, for any date, the ratio of
(i) Consolidated Current Assets as of such date to (ii) Consolidated
Current Liabilities as of such date.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) interest expense, (B) total Federal, state, local and
foreign income, value
- 7 -
12
added and similar taxes and (C) depreciation and amortization expense,
all as determined in accordance with GAAP.
"Consolidated EBITDAR" means, for any period, the sum of (a)
Consolidated EBITDA for such period plus (ii) an amount, which in the
determination of Consolidated Net Income for such period, has been
deducted for rental expense, all as determined in accordance with
GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, for any
Calculation Period, the ratio of (i) Consolidated EBITDAR for such
Calculation Period minus Consolidated Capital Expenditures for such
Calculation Period, to (ii) Consolidated Interest Expense for such
Calculation Period plus Consolidated Scheduled Funded Indebtedness
Payments for such Calculation Period plus rental expense for the
Borrower and its Subsidiaries on a consolidated basis for such
Calculation Period, all as determined in accordance with GAAP.
"Consolidated Funded Indebtedness" means, for any date, the
outstanding principal amount of all Funded Indebtedness, without
duplication, of the Borrower and its Subsidiaries as of such date.
"Consolidated Interest Coverage Ratio" means, for any
Calculation Period, the ratio of (i) Consolidated EBITDA for such
Calculation Period to (ii) Consolidated Interest Expense for such
Calculation Period.
"Consolidated Interest Expense" means, for any period,
interest expense of the Borrower and its Subsidiaries on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Consolidated Leverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of (i) Consolidated Funded Indebtedness as
of such date to (ii) Consolidated EBITDA for the four-quarter period
ending on such date.
"Consolidated Net Income" means, for any period, (i) net
income after taxes for such period for the Borrower and its
Subsidiaries on a consolidated basis plus (ii) to the extent not
included in the amount determined pursuant to clause (i) above and as
calculated on a pro forma basis, net income after taxes for such
period for any Person acquired by the Borrower or any of its
Subsidiaries during such period, all as determined in accordance with
GAAP.
"Consolidated Net Worth" means, for any date, total
shareholders' equity of the Borrower and its Subsidiaries on a
consolidated basis as of such date, as determined in accordance with
GAAP.
"Consolidated Scheduled Funded Indebtedness Payments" means,
for any period, total scheduled payments of principal
- 8 -
13
on Funded Indebtedness (including without limitation the Acquisition
Note) for the Borrower and its Subsidiaries on a consolidated basis
for such period.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, the Collateral Documents,
each Joinder Agreement, the Agent's Fee Letter, and all other related
agreements and documents issued or delivered hereunder or thereunder
or pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"Equity Transaction" means any issuance by the Borrower or any
of its Subsidiaries to any Person of shares of its capital stock or
other equity interests, any shares of its capital stock or other
equity interests pursuant to the exercise of options or warrants or
any shares of its capital stock or other equity interests pursuant to
the conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Credit Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the
Borrower and which is treated as a single employer under Sections
414(b), (c), (m), or (o) of the Code.
- 9 -
14
"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:
Eurodollar Rate = Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available
from time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means such term as defined in Section 9.1.
"Existing Credit Agreement" means that certain credit
agreement, as amended, dated as of September 29, 1995, among the
Borrower, the financial institutions party thereto and NationsBank of
Texas, N.A., as Agent.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole
multiple of 1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (A) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Business Day and (B) if no
such rate is so published on such next preceding Business Day, the
Federal Funds Rate for such day shall be the average rate
- 10 -
15
quoted to the Agent on such day on such transactions as
determined by the Agent.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (i) all Indebtedness of such Person for borrowed
money, (ii) all amounts due and owing by such Person under any
contingent earn-out agreements to which such Person is a party, (iii)
all purchase money Indebtedness of such Person, including without
limitation the principal portion of all obligations of such Person
under Capital Leases, (iv) all Guaranty Obligations of such Person
with respect to Funded Indebtedness of another Person, (v) the maximum
available amount of all standby letters of credit or acceptances
issued or created for the account of such Person, (vi) all Funded
Indebtedness of another Person secured by a Lien on any Property of
such Person, whether or not such Funded Indebtedness has been assumed,
and (vii) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease in accordance
with GAAP. The Funded Indebtedness of any Person shall include the
Funded Indebtedness of any partnership or joint venture in which such
Person is a general partner or joint venturer.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms
of Section 1.3 hereof.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of those Persons identified as a
"Guarantor" on the signature pages hereto, and each Additional Credit
Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or
any Property constituting security therefor, (ii) to advance or
provide funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation
keep well agreements, maintenance agreements, comfort letters or
similar agreements or arrangements) for the benefit of any holder of
Indebtedness of
- 11 -
16
such other Person, (iii) to lease or purchase Property, securities or
services primarily for the purpose of assuring the holder of such
Indebtedness, or (iv) to otherwise assure or hold harmless the holder
of such Indebtedness against loss in respect thereof. The amount of
any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection
agreement or foreign currency exchange agreement between the Borrower
and any Lender, or any Affiliate of a Lender.
"Indebtedness" of any Person means (i) all obligations
of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (iii) all
obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (iv) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which
would appear as liabilities on a balance sheet of such Person, (v) all
obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (vi) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (vii) all Guaranty Obligations of such Person (excluding, to
the extent entered in the ordinary course of business, any Guaranty
Obligations of the Borrower with respect to Operating Leases of any
Subsidiary of the Borrower), (viii) the principal portion of all
obligations of such Person under Capital Leases, (ix) all obligations
of such Person in respect of interest rate protection agreements,
foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price
hedging agreements (including, but not limited to, the Hedging
Agreements), (x) the maximum amount of all standby letters of credit
issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (xi) all preferred stock issued by such
Person and required by the terms thereof to be redeemed, or for which
mandatory sinking fund payments are due, by a fixed date and (xii) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan
- 12 -
17
or similar off-balance sheet financing product to which such Person is
a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP. The Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"Initial Interest Rate Period" means the period commencing as
of the Closing Date and ending January 31, 1997, during which time all
Eurodollar Loans shall have an Interest Period of one (1) month.
"Interbank Offered 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
(rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the rate of interest, determined by the Agent on the
basis of the offered rates for deposits in dollars for a period of
time corresponding to such Interest Period (and commencing on the
first day of such Interest Period), appearing on Telerate Page 3750
(or, if, for any reason, Telerate Page 3750 is not available, the
Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London
time) two (2) Business Days before the first day of such Interest
Period. As used herein, "Telerate Page 3750" means the display
designated as page 3750 by Dow Xxxxx Telerate, Inc. (or such other
page as may replace such page on that service for the purpose of
displaying the British Bankers Association London interbank offered
rates) and "Reuters Screen LIBO Page" means the display designated as
page "LIBO" on the Reuters Monitor Money Rates Service (or such other
page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks).
"Intercompany Indebtedness" means any Indebtedness of a Credit
Party (other than the Borrower) which (i) is owing to the Borrower or
any other Credit Party and (ii) by its terms is specifically
subordinated in right of payment to the prior payment of the
obligations of the Credit Parties under this Credit Agreement and the
other Credit Documents on terms and conditions reasonably satisfactory
to the Required Lenders.
"Interest Payment Date" means (i) as to any Base Rate Loan,
the last day of each March, June, September and December, the date of
repayment of principal of such Loan and the Termination Date and (ii)
as to any Eurodollar Loan, the last day of each Interest Period for
such Loan, the date of repayment of principal of such Loan and on the
Termination Date, and in addition where the applicable Interest Period
is more than 3 months, then also on the date 3 months from the
beginning of the Interest Period, and each 3 months thereafter. If an
Interest Payment Date falls on a date which is not a Business Day,
such Interest Payment Date shall be deemed to be the next succeeding
Business Day, except that in
- 13 -
18
the case of Eurodollar Loans where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next
preceding Business Day.
"Interest Period" means, as to any Eurodollar Loan, a period
of one, two, three or six month's duration, as the Borrower may elect,
commencing in each case, on the date of the borrowing (including
conversions, extensions and renewals); provided, however, (A) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(B) no Interest Period shall extend beyond the Termination Date, and
(c) where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
day of such calendar month.
"Investment", in any Person, means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of, or
equity interest in, such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any Guaranty Obligation incurred for the benefit of such
Person. In computing the amount involved in any Investment, (i)
undistributed earnings of, and interest accrued in respect of
Indebtedness owing by, any such other Person accrued after the date of
such Investment shall not be included, (ii) there shall not be
deducted from the amounts invested in any such other Person any
amounts received as earnings (in the form of dividends, interest or
otherwise) on such Investment or as loans or advances from such other
Person, and (iii) unrealized increases or decreases in value, or
write-ups, write-downs or write-offs, of Investments in any such other
Person shall be disregarded.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(b)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Schedule 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
"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.
- 14 -
19
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any financing or similar statement or
notice filed under the Uniform Commercial Code as adopted and in
effect in the relevant jurisdiction or other similar recording or
notice statute, and any lease in the nature thereof).
"Loan" or "Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any Credit Party to perform any
material obligation under the Credit Documents to which it is a party
or (iii) the material rights and remedies of the Lenders under the
Credit Documents.
"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,
- 15 -
20
materials or wastes, defined or regulated as such in or under any
Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Proceeds" means cash proceeds received by the Borrower or
any of its Subsidiaries from time to time in connection with any Asset
Sale or any Equity Transaction, net of actual costs (including,
without limitation, commissions and underwriting discounts, if any)
and taxes paid by such Person in connection with and attributable to
such Asset Sale or Equity Transaction; provided, however, "Net
Proceeds" shall not include the lesser of (a) $1,000,000 and (b)
aggregate cash proceeds received by the Borrower from time to time in
connection with the issuance by the Borrower of any capital stock or
other equity interests pursuant to stock options granted to the
employees of the Borrower or BEST.
"Non-Excluded Taxes" means such term as is defined in Section
3.10.
"Note" means a promissory note of the Borrower in favor of a
Lender delivered pursuant to Section 2.1(e) and evidencing the Loans
of such Lender, as such promissory note may be amended, modified,
restated or replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Schedule 3.2, as
required by Section 3.2.
"Nursefinders" means Nursefinders, Inc., a Texas corporation,
together with any permitted successors and assigns.
- 16 -
21
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Participation Interest" means, the extension of credit by a
Lender by way of a purchase of a participation in any Letters of
Credit or LOC Obligations as provided in Section 2.2(c) or in any
Loans as provided in Section 3.13.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Acquisitions" means:
(i) the acquisition of the assets of Software
Services; provided that (A) after giving effect on a Pro Forma
Basis to such acquisition (including but not limited to any
Indebtedness to be incurred by the Borrower or any of its
Subsidiaries in connection therewith), no Default or Event of
Default would exist hereunder, (B) the purchase price paid for
the assets of Software Services is no greater than an amount
equal to $15,000,000 (which sum shall include all fees and
expenses in connection therewith) and (C) prior to the
consummation of such transaction, the Agent shall have
received, in form and substance satisfactory to the Agent, (1)
a copy of the purchase agreement and each other document or
instrument executed by the buyer(s) and seller(s) in
connection with such transaction, (2) the unaudited balance
sheet of Software Services as of December 31, 1995 and the
unaudited statements of earnings and statements of cash flows
for the years ended December 31, 1995, December 31, 1994 and
December 31, 1993, (3) the projected balance sheets of
Software Services as at the end of, and the related projected
statements of earnings and of cash flows for, the fiscal years
ended December 31, 1996, December 31, 1997, December 31, 1998
and December 31, 1999 and (4) such other documents, agreements
or information which may be reasonably requested by the Agent,
including, without limitation, certified resolutions and other
organizational and authorizing documents and favorable
opinions of counsel;
(ii) acquisitions by Nursefinders of any of its
franchises existing as of the Closing Date, provided that (A)
after giving effect on a Pro Forma Basis to any such
acquisition (including but not limited to any Indebtedness to
be incurred by the Borrower or any of its Subsidiaries in
connection therewith), no Default or Event of Default would
exist hereunder, (B) no more than two (2) such acquisitions
may be consummated in any
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22
fiscal quarter and (C) the cost of all such acquisitions
occurring on or after the Closing Date does not exceed
$10,000,000;
(iii) other acquisitions by the Borrower or its
Subsidiaries, provided that (A) after giving effect on a Pro
Forma Basis to any such acquisition (including but not limited
to any Indebtedness to be incurred by the Borrower or any of
its Subsidiaries in connection therewith), no Default or Event
of Default would exist hereunder and (B) the Required Lenders
shall have given their prior written approval with respect to
such acquisition; and
(iv) any merger or consolidation permitted by
Section 8.4(b).
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made by the Borrower or any of its Subsidiaries in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of stock,
obligations, securities or other property received by the Borrower or
any of its Subsidiaries in settlement of accounts receivable (created
in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and set forth in Schedule
1.1A, (v) Guaranty Obligations permitted by Section 8.1; (vi)
Permitted Acquisitions; (vii) transactions permitted by Section 8.8;
(viii) advances or loans to directors, officers, employees, agents,
customers or suppliers that do not exceed $250,000 in the aggregate at
any one time outstanding; (ix) Intercompany Indebtedness
permitted by Section 8.1; and (x) other Investments, provided that the
aggregate outstanding amount of all such other Investments taken
together shall not exceed $3,000,000.
"Permitted Liens" means:
(i) Liens in favor of the Agent on behalf of the
Lenders;
(ii) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers
and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in
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23
the ordinary course of business, provided that such Liens
secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to
enforce the same or are being contested in good faith by
appropriate proceedings for which adequate reserves determined
in accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed
under ERISA) incurred or deposits made by the Borrower and its
Subsidiaries in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment
of borrowed money);
(v) Liens in connection with attachments or
judgments (including judgment or appeal bonds) provided that
the judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days
after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or
irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use
of the encumbered Property for its intended purposes;
(vii) Liens on Property securing purchase money
Indebtedness (including Capital Leases) to the extent
permitted under Section 8.1(c), provided that any such Lien
attaches to such Property concurrently with or within 90 days
after the acquisition thereof;
(viii) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions;
(ix) other Liens, provided that the aggregate amount
Indebtedness secured by such Liens shall not exceed an
aggregate principal amount of $1,000,000; and
(x) Liens existing as of the Closing Date and set
forth on Schedule 1.1B.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company,
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24
association, trust or other enterprise (whether or not incorporated)
or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is
(or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.
"Pledge Agreement" means the pledge and security agreement
dated as of the Closing Date in the form of Schedule 1.1C to be
executed in favor of the Agent by each Credit Party which owns any
stock in any Subsidiary of the Borrower.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by NationsBank as its prime rate in effect
at its principal office in Charlotte, North Carolina, with each change
in the Prime Rate being effective on the date such change is publicly
announced as effective (it being understood and agreed that the Prime
Rate is a reference rate used by NationsBank in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit by NationsBank to any
debtor).
"Pro Forma Basis" means, with respect to any Pro Forma
Transaction, that such Pro Forma Transaction shall be deemed to have
occurred as of the first day of the four fiscal-quarter period ending
as of the most recent fiscal quarter end preceding the date of such
Pro Forma Transaction with respect to which the Agent and the Lenders
have received the officer's certificate in accordance with the
provisions of Section 7.1(c)(i). With respect to any incurrence,
assumption or retirement of Indebtedness as referred to in Section
8.1(g), any such Indebtedness which has a floating or formula rate
shall have an implied rate of interest for the applicable period equal
to the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination.
"Pro Forma Transaction" means (i) any incurrence, assumption
or retirement of Indebtedness as referred to in Section 8.1(g) and
(ii) any acquisition as referred to in the definition of "Permitted
Acquisitions" set forth in this Section 1.1.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" means that certain asset purchase
agreement, dated as of September 20, 1996, among the Borrower, BEST,
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx XxXxx, Xxx
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25
Xxxxxxx and Xxxxxx XxXxxx, as the same may be amended, modified,
restated or replaced from time to time.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation D, G, U, or X" means Regulation D, G, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment (including the abandonment
or discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
post-event notice requirement is waived under subsections .13, .14,
.18, .19, or .20 of PBGC Reg. Section 2615.
"Required Lenders" means, at any time, Lenders which are then
in compliance with their obligations hereunder (as determined by the
Agent) and holding in the aggregate at least 51% of (i) the
Commitments (and Participation Interests therein) or (ii) if the
Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of the Borrower or any of its Subsidiaries, now or
hereafter outstanding, (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of the Borrower or any
of its Subsidiaries, now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of
stock of the Borrower or any of its Subsidiaries, now or hereafter
outstanding and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any
Subordinated Indebtedness.
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26
"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 covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Software Services" means Software Services Corporation, a
Georgia corporation.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a
transaction, for which such Person's Property would constitute
unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or
is to engage, (iv) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (v) the present
fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Standby Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(b)(i).
"Subordinated Indebtedness" means (i) any Indebtedness
evidenced by the Acquisition Note, (ii) all other Indebtedness
incurred by the Borrower and owing to BEST pursuant to the Purchase
Agreement and (iii) with respect to Permitted Acquisitions, any
additional Indebtedness incurred by the Borrower or any of its
Subsidiaries which by its terms is specifically subordinated in right
of payment to the prior payment of the obligations of the Credit
Parties under this Credit Agreement and the other Credit Documents on
terms and conditions satisfactory to the Agent.
"Subordination Agreement" means that certain subordination
agreement, dated as of September 30, 1996, by
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27
and between BEST and the Agent, as the same may be amended, modified,
restated or replaced from time to time.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries, and
(b) any partnership, association, joint venture or other entity in
which such Person directly or indirectly through Subsidiaries has more
than 50% equity interest at any time.
"Termination Date" means September 30, 1999.
"Termination Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in
which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA; (v) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Plan; or (vi) the
complete or partial withdrawal of the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate from a Multiemployer Plan.
"Trade Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(b)(ii).
"Unused Committed Amount" means, for any period, the amount by
which (a) the then applicable Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal
amount of all Loans plus (ii) the outstanding aggregate principal
amount of all LOC Obligations.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(a).
"Voting Stock" means, with respect to any Person, capital
stock issued by such Person the holders of which are ordinarily, in
the absence of contingencies, entitled to vote
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for the election of directors (or persons performing similar
functions) of such Person, even though the right so to vote has been
suspended by the happening of such a contingency.
1.2 Computation of Time Periods. For purposes of computation of
periods of time hereunder, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."
1.3 Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Lenders hereunder shall be prepared, in
accordance with GAAP applied on a consistent basis. All calculations made for
the purposes of determining compliance with this Credit Agreement shall (except
as otherwise expressly provided herein) be made by application of GAAP applied
on a basis consistent with the most recent annual or quarterly financial
statements delivered pursuant to Section 7.1 hereof (or, prior to the delivery
of the first financial statements pursuant to Section 7.1 hereof, consistent
with the financial statements as at December 31, 1995); provided, however, if
(a) the Borrower shall object to determining such compliance on such basis at
the time of delivery of such financial statements due to any change in GAAP or
the rules promulgated with respect thereto or (b) the Agent or the Required
Lenders shall so object in writing within 30 days after delivery of such
financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.
SECTION 2
CREDIT FACILITIES
2.1 Loans.
(a) Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Loans") from time to time from
the Closing Date until the Termination Date, or such earlier date as
the Commitments shall have been terminated as provided herein for the
purposes hereinafter set forth; provided, however, that the sum of the
aggregate principal amount of outstanding Loans shall not exceed ONE
HUNDRED MILLION DOLLARS ($100,000,000) (as such aggregate maximum
amount may be reduced from time to time as provided in Section 3.4,
the "Committed Amount"); provided, further, (i) with regard to each
Lender individually, such Lender's outstanding Loans shall not exceed
such Lender's Commitment Percentage of the Committed Amount, and (ii)
with regard to the Lenders collectively, the aggregate principal
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amount of outstanding Loans plus LOC Obligations outstanding shall not
exceed the Committed Amount. 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; provided, however, that (x) during the Initial
Interest Rate Period, all Eurodollar Loans shall have an Interest
Period of one (1) month and (y) no more than 7 Eurodollar Loans shall
be outstanding hereunder at any time. For purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate
Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new Eurodollar Loan with a single Interest Period.
Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower
shall request a Loan borrowing by written notice (or telephone
notice promptly confirmed in writing) to the Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day prior to the date 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 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 (after the Initial Interest Rate Period) if Eurodollar
Loans are requested, the Interest Period(s) therefor. If the
Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a Eurodollar
Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Loan
requested, then such notice shall be deemed to be a request
for a Base Rate Loan hereunder. The Agent shall give notice
to each affected Lender promptly upon receipt of each Notice
of Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar
Loan or Base Rate Loan that is a Loan shall be in a minimum
aggregate principal amount of $1,000,000 and integral
multiples of $100,000 in excess thereof (or the remaining
amount of the Committed Amount, if less).
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(iii) Advances. Each Lender will make its
Commitment Percentage of each Loan borrowing available to the
Agent for the account of the Borrower as specified in Section
3.14(a), or in such other manner as the Agent may specify in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in
Dollars and in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrower by the
Agent by crediting the account of the Borrower on the books of
such office with the aggregate of the amounts made available
to the Agent by the Lenders and in like funds as received by
the Agent.
(c) Repayment. The principal amount of all Loans shall
be due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such
periods as Loans shall be comprised in whole or in part of
Base Rate Loans, such Base Rate Loans shall bear interest at a
per annum rate equal to the Base Rate;
(ii) Eurodollar Loans. During such
periods as Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Eurodollar Rate plus the
Applicable Percentage.
Interest on Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified
herein).
(e) Notes. The Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to such
Lender in an original principal amount equal to such Lender's
Commitment Percentage of the Committed Amount and in substantially the
form of Schedule 2.1(e).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, the Lenders will
participate in the issuance by the Issuing Lender from time to time of
such Letters of Credit in Dollars from the Closing Date until the
Termination Date as the Borrower may request, in a form acceptable to
the Issuing Lender; provided, however, that (i) the LOC Obligations
outstanding shall not at any time exceed TEN MILLION DOLLARS
($10,000,000) (the "LOC Committed Amount") and (ii) the sum of the
aggregate principal amount of outstanding Loans plus LOC Obligations
outstanding shall not at any time exceed the
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31
Committed Amount. No Letter of Credit shall (x) have an original
expiry date more than one year from the date of issuance or (y) as
originally issued or as extended, have an expiry date extending beyond
the Termination Date. Each Letter of Credit shall comply with the
related LOC Documents. The issuance and expiry date of each Letter of
Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of
a Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
frequently upon request, disseminate to each of the Lenders a detailed
report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the beneficiary, the face amount, expiry date as
well as any payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a
Letter of Credit, shall be deemed to have purchased without recourse a
risk participation from the applicable Issuing Lender in such Letter
of Credit and the obligations arising thereunder, in each case in an
amount equal to its pro rata share of the obligations under such
Letter of Credit (based on the respective Commitment Percentages of
the Lenders) and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated to pay
to the Issuing Lender therefor and discharge when due, its pro rata
share of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Lender's participation in any
Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit,
each such Lender shall pay to the Issuing Lender its pro rata share of
such unreimbursed drawing in same day funds on the day of notification
by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) hereof. The obligation of each Lender to
so reimburse the Issuing Lender shall be absolute and unconditional
and shall not be affected by the occurrence of a Default, an Event of
Default or any other occurrence or event. Any such reimbursement
shall not relieve or otherwise impair the obligation of the Borrower
to reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the
Borrower. Unless the Borrower shall immediately notify the Issuing
Lender that the Borrower
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32
intends to otherwise reimburse the Issuing Lender for such drawing,
the Borrower shall be deemed to have requested that the Lenders make a
Loan in the amount of the drawing as provided in subsection (e) hereof
on the related Letter of Credit, the proceeds of which will be used to
satisfy the related reimbursement obligations. The Borrower promises
to reimburse the Issuing Lender on the day of drawing under any Letter
of Credit (either with the proceeds of a Loan obtained hereunder or
otherwise) in same day funds. If the Borrower shall fail to reimburse
the Issuing Lender as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the Base
Rate plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to
payment the Borrower may claim or have against the Issuing Lender, the
Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon
or any other Person, including without limitation any defense based on
any failure of the Borrower or any other Credit Party to receive
consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will
promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Agent for the
account of the Issuing Lender in Dollars and in immediately available
funds, the amount of such Lender's pro rata share of such unreimbursed
drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time)
otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender
shall, on demand, pay to the Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date
of such drawing until such Lender pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two (2)
Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the
Federal Funds Rate and thereafter at a rate equal to the Base Rate.
Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be
absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever.
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Simultaneously with the making of each such payment by a Lender to the
Issuing Lender, such Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Lender,
acquire a participation in an amount equal to such payment (excluding
the portion of such payment constituting interest owing to the Issuing
Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect
thereto.
(e) Repayment with Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Loan advance
to reimburse a drawing under a Letter of Credit, the Agent shall give
notice to the Lenders that a Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing
under a Letter of Credit, in which case a Loan advance comprised of
Base Rate Loans (or Eurodollar Loans to the extent the Borrower has
complied with the procedures of Section 2.1(b)(i) with respect
thereto) shall be immediately made to the Borrower by all Lenders
(notwithstanding any termination of the Commitments pursuant to
Section 9.2) pro rata based on the respective Commitment Percentages
of the Lenders (determined before giving effect to any termination of
the Commitments pursuant to Section 9.2) and the proceeds thereof
shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each such Lender hereby irrevocably
agrees to make its pro rata share of each such Loan immediately upon
any such request or deemed request in the amount, in the manner and on
the date specified in the preceding sentence notwithstanding (i) the
amount of such borrowing may not comply with the minimum amount for
advances of 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 Loan to be made by the time
otherwise required hereunder, (v) whether the date of such borrowing
is a date on which Loans are otherwise permitted to be made hereunder
or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the
event that any Loan cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any Credit Party), then each such Lender
hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such participation in the
outstanding LOC Obligations as
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shall be necessary to cause each such Lender to share in such LOC
Obligations ratably (based upon the respective Commitment Percentages
of the Lenders (determined before giving effect to any termination of
the Commitments pursuant to Section 9.2)), provided that at the time
any purchase of participation pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the Issuing
Lender, to the extent not paid to the Issuer by the Borrower in
accordance with the terms of subsection (d) hereof, interest on the
principal amount of participation purchased for each day from and
including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such participation,
at the rate equal to, if paid within two (2) Business Days of the date
of the Loan advance, the Federal Funds Rate, and thereafter at a rate
equal to the Base Rate.
(f) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a) hereof, a
Letter of Credit issued hereunder may contain a statement to the
effect that such Letter of Credit is issued for the account of a
Subsidiary of the Borrower, provided that notwithstanding such
statement, the Borrower shall be the actual account party for all
purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations
hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any
Letter of Credit shall, for purposes hereof, be treated in all
respects the same as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender 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.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this
Section 2.2, the Borrower hereby agrees to protect, indemnify,
pay and save the Issuing Lender harmless from and against any
and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees)
that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or (B) the failure of the Issuing Lender to
honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or governmental
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authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Issuing
Lender, the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be
responsible: (A) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for
and issuance of any Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) for the validity or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole
or in part, that may prove to be invalid or ineffective for
any reason; (C) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be
in cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and
(E) for any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation,
any Government Acts. None of the above shall affect, impair,
or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or
in connection with any Letter of Credit or the related
certificates, if taken or omitted without gross negligence or
bad faith, shall not put such Issuing Lender under any
resulting liability to the Borrower or any other Credit Party.
It is the intention of the parties that this Credit Agreement
shall be construed and applied to protect and indemnify the
Issuing Lender against any and all risks involved in the
issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrower (on behalf of itself and each
of the other Credit Parties), including, without limitation,
any and all Government Acts. The Issuing Lender shall not,
in any way, be liable for any failure by the Issuing Lender
or anyone else to pay any drawing under any Letter of Credit
as a result of any Government Acts or any other cause beyond
the control of the Issuing Lender.
(iv) Nothing in this subsection (h) is intended
to limit the reimbursement obligations of the Borrower
contained in subsection (d) above. The obligations of the
Borrower under this subsection (h) shall survive the
termination of this Credit Agreement. No act or
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omissions of any current or prior beneficiary of a
Letter of Credit shall in any way affect or impair the rights
of the Issuing Lender to enforce any right, power or benefit
under this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (h), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender (A) arising out of
the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction,
or (B) caused by the Issuing Lender's failure to pay under
any Letter of Credit after presentation to it of a request
strictly complying with the terms and conditions of such
Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have
been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any Lender to recover from the Issuing Lender
any amounts made available by such Lender to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a
Letter of Credit constituted gross negligence or willful misconduct on
the part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any
conflict between this Credit Agreement and any LOC Document (including
any letter of credit application), this Credit Agreement shall
control.
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).
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3.2 Extension and Conversion. Subject to the terms of Section
5.2, the Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert
Loans into Loans of another interest rate type; provided, however, that (i)
except as provided in Section 3.8, Eurodollar Loans may be converted into Base
Rate Loans only on the last day of the Interest Period applicable thereto, (ii)
Eurodollar Loans may be extended, and Base Rate Loans may be converted into
Eurodollar Loans, only if no Default or Event of Default is in existence on the
date of extension or conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of "Interest
Period" set forth in Section 1.1 and shall be in such minimum amounts as
provided in Section 2.1(b)(ii), (iv) no more than 7 Eurodollar Loans shall be
outstanding hereunder at any time (it being understood that, for purposes
hereof, Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period), (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) during the Initial Interest Rate Period, all Eurodollar Loans shall have
an Interest Period of one (1) month. Each such extension or conversion shall
be effected by the Borrower by giving a Notice of Extension/Conversion (or
telephone notice promptly confirmed in writing) to the Agent prior to 11:00
A.M. (Charlotte, North Carolina time) on the Business Day of, in the case of
the conversion of a Eurodollar Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Loans to be so extended or converted, the types of Loans
into which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or
conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in subsections (ii), (iii),
(iv) and (v) of Section 5.2. In the event the Borrower fails to request
extension or conversion of any Eurodollar Loan in accordance with this Section,
or any such conversion or extension is not permitted or required by this
Section, then such Eurodollar Loan shall be automatically converted into a Base
Rate Loan at the end of the Interest Period applicable thereto. The Agent
shall give each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time, subject
to Section 3.11, but otherwise without premium or
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penalty; provided, however, that (i) Eurodollar Loans may only be
prepaid on three Business Days' prior written notice to the Agent and
specifying the applicable Loans to be prepaid; (ii) any prepayment of
Eurodollar Loans will be subject to Section 3.11; and (iii) each such
partial prepayment of Loans shall be in a minimum principal amount of
$1,000,000. Subject to the foregoing terms, amounts prepaid under
this Section 3.3(a) shall be applied as the Borrower may elect.
(b) Mandatory Prepayments.
(i) If at any time, the sum of the aggregate
principal amount of outstanding Loans plus LOC Obligations
outstanding shall exceed the Committed Amount, the Borrower
promises to prepay immediately the outstanding principal
balance on the Loans in an amount sufficient to eliminate such
excess.
(ii) If at any time, the Consolidated Leverage
Ratio shall exceed 3.00:1.00, the Borrower promises to prepay
immediately the outstanding principal balance on the Loans in
an amount sufficient to eliminate such excess.
(iii) Immediately upon the occurrence of any Asset
Sale, the Borrower shall prepay the Loans in an amount equal
to 100% of the Net Proceeds of the related Asset Sale.
(iv) Immediately upon the occurrence of any Equity
Transaction, the Borrower shall prepay the Loans in an amount
equal to 100% of the Net Proceeds of the related Equity
Transaction.
(c) General. All prepayments made pursuant to this
Section 3.3 shall (i) be subject to Section 3.11 and (ii) unless the
Borrower shall specify otherwise, be applied first to Base Rate Loans,
if any, and then to Eurodollar Loans in direct order of Interest
Period maturities. Amounts prepaid may be reborrowed in accordance
with the provisions hereof.
3.4 Termination and Reduction of Committed Amount.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Committed Amount in whole or in part (in
minimum aggregate amounts of $5,000,000 or in integral multiples of $1,000,000
in excess thereof (or, if less, the full remaining amount of the then
applicable Committed Amount)) upon five Business Days' prior written notice to
the Agent; provided, however, no such termination or reduction shall be made
which would cause the aggregate principal amount of outstanding Loans plus LOC
Obligations outstanding to exceed the Committed Amount, unless, concurrently
with such termination or reduction, the Loans are repaid to the extent
necessary to eliminate such excess. The Commitments of the Lenders and the
Issuing Lender shall
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automatically terminate on the Termination Date. The Agent shall promptly
notify each affected Lender of receipt by the Agent of any notice from the
Borrower pursuant to this Section 3.4(a).
(b) Termination Date. The Commitments of the Lenders and the LOC
Commitment of the Issuing Lender shall automatically terminate on the
Termination Date.
(c) General. The Borrower shall pay to the Agent for the account
of the Lenders in accordance with the terms of Section 3.5(a), on the date of
each termination or reduction of the Committed Amount, the Unused Fee accrued
through the date of such termination or reduction on the amount of the
Committed Amount so terminated or reduced.
3.5 Fees.
(a) Unused Fee. In consideration of the Commitments of
the Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "Unused Fee") on the Unused
Committed Amount computed at a per annum rate for each day during the
applicable Unused Fee Calculation Period (hereinafter defined) at a
rate equal to the Applicable Percentage in effect from time to time.
The Unused Fee shall commence to accrue on the Closing Date and shall
be due and payable in arrears on the last business day of each March,
June, September and December (and any date that the Committed Amount
is reduced as provided in Section 3.4(a) and the Termination Date) for
the immediately preceding quarter (or portion thereof) (each such
quarter or portion thereof for which the Unused Fee is payable
hereunder being herein referred to as an "Unused Fee Calculation
Period"), beginning with the first of such dates to occur after the
Closing Date.
(b) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In
consideration of the issuance of standby Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Standby Letter of Credit
Fee") on such Lender's Commitment Percentage of the average
daily maximum amount available to be drawn under each such
standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal
to the Applicable Percentage. The Standby Letter of Credit
Fee will be payable quarterly in arrears on the last Business
Day of each March, June, September and December for the
immediately preceding quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Trade Letter of Credit
Fee") equal to 0.125% on such Lender's Commitment
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Percentage of the amount of each drawing under any such trade
Letter of Credit. The Trade Letter of Credit Fee will be
payable on each date of drawing under a trade Letter of
Credit.
(iii) Issuing Lender Fees. In addition to the
Standby Letter of Credit Fee payable pursuant to clause (i)
above and the Trade Letter of Credit Fee payable pursuant to
clause (ii) above, the Borrower promises to pay to the Issuing
Lender for its own account without sharing by the other
Lenders the letter of credit fronting and negotiation fees
agreed to by the Borrower and the Issuing Lender from time to
time and the customary charges from time to time of the
Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the
"Issuing Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to
the Agent, for its own account, the fees referred to in the Agent's
Fee Letter (collectively, the "Agent's Fees").
3.6 Capital Adequacy. If any Lender has determined, after the
date hereof, that the adoption or the becoming effective of, or any change in,
or any change by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof in the interpretation
or administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or assets as a consequence
of its commitments or obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. Each determination
by any such Lender of amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties hereto.
3.7 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 (a) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans and (b) any Loans that were to
have been converted on the first day of such
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41
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Base Rate Loans. Until such notice has been withdrawn by the
Agent, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Base Rate Loans to Eurodollar
Loans.
3.8 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof occurring after the Closing Date shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrower and the Agent (which
notice shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall
forthwith be canceled and, until such time as it shall no longer be unlawful
for such Lender to make or maintain Eurodollar Loans, such Lender shall then
have a commitment only to make a Base Rate Loan when a Eurodollar Loan is
requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 3.11.
3.9 Requirements of Law. If, after the date hereof, the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof applicable to any Lender, or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority, in each case made subsequent to
the Closing Date (or, if later, the date on which such Lender becomes a
Lender):
(a) shall subject such Lender to any tax of any
kind whatsoever with respect to any Letter of Credit, any Eurodollar
Loans made by it or its obligation to make Eurodollar Loans, or change
the basis of taxation of payments to such Lender in respect thereof
(except for (i) Non-Excluded Taxes covered by Section 3.10 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under Section 3.10(b)) and (ii)
changes in taxes measured by or imposed upon the overall net income,
or franchise tax (imposed in lieu of such net income tax), of such
Lender or its applicable lending office, branch, or any affiliate
thereof));
(b) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other
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extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(c) shall impose on such Lender any other
condition (excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable,
provided that, in any such case, the Borrower may elect to convert the
Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving the
Agent at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Lender, upon demand, without duplication,
such amounts, if any, as may be required pursuant to Section 3.11. If any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall provide prompt notice thereof to the Borrower, through the
Agent, certifying (x) that one of the events described in this paragraph (a)
has occurred and describing in reasonable detail the nature of such event, (y)
as to the increased cost or reduced amount resulting from such event and (z) as
to the additional amount demanded by such Lender and a reasonably detailed
explanation of the calculation thereof. Such a certificate as to any
additional amounts payable pursuant to this subsection submitted by such
Lender, through the Agent, to the Borrower shall be conclusive and binding on
the parties hereto in the absence of manifest error. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
3.10 Taxes.
(a) Except as provided below in this subsection, all
payments made by the Borrower under this Credit Agreement and any
Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or
affiliate thereof, and 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
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43
laws of which such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Agent or any Lender hereunder or under
any Notes, (A) the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or
such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts
specified in this Credit Agreement and any Notes, provided, however,
that the Borrower shall be entitled to deduct and withhold any
Non-Excluded Taxes and shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of
the United States of America or a state thereof if such Lender fails
to comply with the requirements of paragraph (b) of this subsection
whenever any Non-Excluded Taxes are payable by the Borrower, and (B)
as promptly as possible thereafter the Borrower shall send to the
Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may
become payable by the Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the
termination of this Credit Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such Lender,
deliver to the Borrower and the Agent (A) two (2) duly
completed copies of United States Internal Revenue Service
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;
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(ii) deliver to the Borrower and the
Agent two (2) further copies of any such form or certification
on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Borrower or the Agent; or
(Y) in the case of any such Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (i) represent to the Borrower (for the benefit of the Borrower
and the Agent) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (ii) agree to furnish to
the Borrower on or before the date of any payment by the Borrower,
with a copy to the Agent two (2) accurate and complete original signed
copies of Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the date of such
certificate to an exemption from U.S. withholding tax under the
provisions of Section 881(c) of the Internal Revenue Code with respect
to payments to be made under this Credit Agreement and any Notes (and
to deliver to the Borrower and the Agent two (2) further copies of
such form on or before the date it expires or becomes obsolete and
after the occurrence of any event requiring a change in the most
recently provided form and, if necessary, obtain any extensions of
time reasonably requested by the Borrower or the Agent for filing and
completing such forms), and (iii) agree, to the extent legally
entitled to do so, upon reasonable request by the Borrower, to provide
to the Borrower (for the benefit of the Borrower and the Agent) such
other forms as may be reasonably required in order to establish the
legal entitlement of such Lender to an exemption from withholding with
respect to payments under this Credit Agreement and any Notes;
unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to it
and such Lender so advises the Borrower and the Agent. Each Person
that shall become a Lender or a participant of a Lender pursuant to
subsection 11.3 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and statements
required pursuant to this subsection, provided that in the case of a
participant of a Lender the obligations of such participant of a
Lender pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that suchparticipant of a
Lender shall furnish all such required forms, certifications and
statements to the Lender from which the related participation shall
have been purchased.
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3.11 Indemnity. The Borrower promises to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan after the Borrower has given a notice thereof
in accordance with the provisions of this Credit Agreement or (c) the making of
a prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to Eurodollar Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable 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. The covenants of the Borrower set
forth in this Section 3.11 shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable hereunder.
3.12 Pro Rata Treatment. Except to the extent otherwise provided
herein:
(a) Loans. Each Loan, each payment or prepayment of
principal of any Loan or reimbursement obligations arising from
drawings under Letters of Credit, each payment of interest on the
Loans or reimbursement obligations arising from drawings under Letters
of Credit, each payment of Unused Fees, each payment of the Standby
Letter of Credit Fee, each payment of the Trade Letter of Credit Fee,
each reduction of the Committed Amount and each conversion or
extension of any Loan, shall be allocated pro rata among the Lenders
in accordance with the respective principal amounts of their
outstanding Loans and Participation Interests.
(b) Advances. 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 ratable share 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
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46
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.
3.13 Sharing of Payments. The Lenders agree among themselves that,
in the event that any Lender shall obtain payment in respect of any Loan, LOC
Obligations or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other
means, in excess of its pro rata share of such payment as provided for in this
Credit Agreement, such Lender shall promptly purchase from the other Lenders a
participation in such Loans, LOC Obligations and other obligations in such
amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all Lenders share such payment in accordance with
their respective ratable shares as provided for in this Credit Agreement. The
Lenders further agree among themselves that if payment to a Lender obtained by
such Lender through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise
be restored, each Lender which shall have shared the benefit of such payment
shall, by repurchase of a participation theretofore sold, return its share of
that benefit (together with its share of any accrued interest payable with
respect thereto) to each Lender whose payment shall have been rescinded or
otherwise restored. The Borrower agrees that any Lender so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including setoff, banker's lien or counterclaim, with respect to
such participation as fully as if such Lender were a holder of such Loan, LOC
Obligations or other obligation in the amount of such participation. Except as
otherwise expressly provided in this Credit Agreement, if any Lender or the
Agent shall fail to remit to the Agent or any other Lender an amount payable by
such Lender or the Agent to the Agent or such other Lender pursuant to this
Credit Agreement on the date when such amount is due, such payments shall be
made together with interest thereon for each date from the date such amount is
due until the date such amount is paid to the Agent or such other Lender at a
rate per annum equal to the Federal Funds Rate. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section 3.13 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.13 to share in the benefits of any recovery on such secured claim.
3.14 Payments, Computations, Etc.
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(a) 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 the Agent's office specified in
Schedule 2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date when due. Payments received after such time shall
be deemed to have been received on the next succeeding Business Day.
The Agent may (but shall not be obligated to) debit the amount of any
such payment which is not made by such time to any ordinary deposit
account of the Borrower maintained with the Agent (with notice to the
Borrower). The Borrower shall, at the time it makes any payment under
this Credit Agreement, specify to the Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event
that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Agent shall distribute such
payment to the Lenders in such manner as the Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder,
subject to the terms of Section 3.12(a)). The Agent will distribute
such payments to such Lenders, if any such payment is received prior
to 12:00 Noon (Charlotte, North Carolina time) on a Business Day in
like funds as received prior to the end of such Business Day and
otherwise the Agent will distribute such payment to such Lenders on
the next succeeding Business Day. Whenever any payment hereunder
shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such
extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next
preceding Business Day. Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 360 days, except
with respect to computation of interest on Base Rate Loans which
(unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Agent or any
Lender on account of the Borrower's Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Agent with respect to the
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Collateral under or pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents or otherwise with respect to the Borrower's
Obligations owing to such Lender;
FOURTH, to the payment of all of the Borrower's Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Borrower's Obligations;
SIXTH, to all other Borrower's Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and
"SIXTH" above.
3.15 Evidence of Debt. (a) Each Lender shall maintain an account or
accounts evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Credit Agreement. Each Lender will make
reasonable efforts to maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c) hereof, and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any principal
or interest due and payable or to become due and payable to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder from
or for the account of the Borrower and each Lender's share thereof. The Agent
will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
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(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.15 (and, if consistent
with the entries of the Agent, subsection (a)) shall be prima facie evidence of
the existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Agent to maintain any
such account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
the Loans made by such Lender in accordance with the terms hereof.
3.16 Mandatory Assignment. In the event any Lender delivers to the
Borrower any notice in accordance with 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 11.3(b)), and in its sole discretion require
such Lender to transfer and assign in whole or in part, without recourse (in
accordance with and subject to the terms and conditions of Section 11.3(b)),
all or part of its interests, rights and obligations under this Credit
Agreement to any assignee which shall assume such assigned obligations,
provided that (i) such assignee shall be (a) any Lender or any Affiliate or
Subsidiary of a Lender, or (b) any other commercial bank, financial institution
or "accredited investor" (as defined in Regulation D of the Securities and
Exchange Commission) reasonably acceptable to the Agent and the Required
Lenders, (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 assignee shall have paid to the assigning Lender in
immediately available funds the principal of and interest accrued to the date
of such payment on the Loans made by it hereunder and all other amounts owed to
it hereunder (including, without limitation, any amounts owing pursuant to
Section 3.9).
SECTION 4
GUARANTY
4.1 The Guarantee. Each of the Guarantors hereby jointly and
severally guarantees to each Lender, each Affiliate of a Lender that enters
into a Hedging Agreement and the Agent as hereinafter provided the prompt
payment of the Borrower's Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Borrower's Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as mandatory cash collateralization or otherwise),
the Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Borrower's Obligations, the same will be
promptly paid in full when due (whether at extended
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maturity, as a mandatory prepayment, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
4.2 Obligations Unconditional. The obligations of the Guarantors
under Section 4.1 hereof are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents or Hedging Agreements, or any other agreement or
instrument referred to therein, or any substitution, release or exchange of any
other guarantee of or security for any of the Borrower's Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 4.2 that the obligations of the Guarantors hereunder shall be absolute
and unconditional under any and all circumstances. Each Guarantor agrees that
such Guarantor shall have no right of subrogation, indemnity, reimbursement or
contribution against the Borrower or any other Guarantor of the Borrower's
Obligations for amounts paid under this Guaranty until such time as the Lenders
(and any Affiliates of Lenders entering into Hedging Agreements) have been paid
in full, all Commitments under the Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received
under the Credit Documents or Hedging Agreements. Without limiting the
generality of the foregoing, it is agreed that, to the fullest extent permitted
by law, the occurrence of any one or more of the following shall not alter or
impair the liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Borrower's Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging
Agreements shall be done or omitted;
(iii) the maturity of any of the Borrower's Obligations shall
be accelerated, or any of the Borrower's Obligations shall be
modified, supplemented or amended in any respect, or
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any right under any of the Credit Documents, any Hedging Agreement or
any other agreement or instrument referred to in the Credit Documents
or Hedging Agreements shall be waived or any other guarantee of any of
the Borrower's Obligations or any security therefor shall be released
or exchanged in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Agent or any
Lender or Lenders as security for any of the Borrower's Obligations
shall fail to attach or be perfected; or
(v) any of the Borrower's Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit
Documents, any Hedging Agreement or any other agreement or instrument referred
to in the Credit Documents or Hedging Agreements, or against any other Person
under any other guarantee of, or security for, any of the Borrower's
Obligations.
4.3 Reinstatement. The obligations of the Guarantors under this
Section 4 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Borrower's
Obligations is rescinded or must be otherwise restored by any holder of any of
the Borrower's Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Guarantor agrees that it
will indemnify the Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers. Without limiting the generality of
the provisions of this Section 4, each Guarantor hereby specifically waives the
benefits of N.C. Gen. Stat. Sections 26-7 through 26-9, inclusive.
Each Guarantor further agrees that such Guarantor shall have no right of
recourse to security for the Borrower's Obligations, except through the
exercise of the rights of subrogation pursuant to Section 4.2.
4.5 Remedies. The Guarantors agree that, to the fullest extent
permitted by law, as between the Guarantors, on the one hand, and the Agent and
the Lenders, on the other hand, the Borrower's Obligations may be declared to
be forthwith due and payable as provided in Section 9.2 hereof (and shall be
deemed to
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have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing the
Borrower's Obligations from becoming automatically due and payable) as against
any other Person and that, in the event of such declaration (or the Borrower's
Obligations being deemed to have become automatically due and payable), the
Borrower's Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
Section 4.1.
4.6 Rights of Contribution. The Guarantors hereby agree, as among
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below), each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the succeeding provisions of this Section 4.6), pay
to such Excess Funding Guarantor an amount equal to such Guarantor's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the properties, assets, liabilities and debts of such Excess Funding Guarantor)
of such Excess Payment (as defined below). The payment obligation of any
Guarantor to any Excess Funding Guarantor under this Section 4.6 shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Guarantor under the other provisions of this Section 4, and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations. For purposes hereof, (i) "Excess Funding Guarantor" shall mean,
in respect of any obligations arising under the other provisions of this
Section 4 (hereafter, the "Guaranteed Obligations"), a Guarantor that has paid
an amount in excess of its Pro Rata Share of the Guaranteed Obligations; (ii)
"Excess Payment" shall mean, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations; and (iii) "Pro Rata Share", for the purposes of
this Section 4.6, shall mean, for any Guarantor, the ratio (expressed as a
percentage) of (a) the amount by which the aggregate present fair saleable
value of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (b) the amount by which the aggregate present fair saleable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors, all as of the Closing Date (if any Guarantor becomes a
party hereto subsequent to the Closing Date, then for the purposes of this
Section 4.6 such subsequent Guarantor shall be deemed to have been a Guarantor
as of the Closing Date and the information pertaining to, and only pertaining
to, such Guarantor as of the date such Guarantor became a Guarantor shall be
deemed true as of the Closing Date).
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4.7 Continuing Guarantee. The guarantee in this Section 4 is a
continuing guarantee, and shall apply to all Borrower's Obligations whenever
arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions. The obligation of the Lenders to enter
into this Credit Agreement and to make the initial Loans or the Issuing Lender
to issue the initial Letter of Credit, whichever shall occur first, shall be
subject to satisfaction of the following conditions (in form and substance
acceptable to the Lenders):
(a) The Agent shall have received original counterparts
of this Credit Agreement executed by each of the parties hereto;
(b) The Agent shall have received an appropriate original
Note for each Lender, executed by the Borrower;
(c) The Agent shall have received original counterparts
of the Pledge Agreement executed by each Credit Party which owns any
stock in any Subsidiary of the Borrower;
(d) The Agent shall have received, in form and substance
satisfactory to the Agent, all stock certificates evidencing the stock
pledged to the Agent pursuant to the Pledge Agreement, together with
duly executed in blank undated stock powers attached thereto;
(e) The Agent shall have received all documents it may
reasonably request relating to the existence and good standing of each
of the Credit Parties, the corporate or other necessary authority for
and the validity of the Credit Documents, and any other matters
relevant thereto, all in form and substance reasonably satisfactory to
the Agent;
(f) The Agent shall have received all documents it may
reasonably request with respect to BEST relating to the corporate or
other necessary authority for the execution, delivery and performance
of the Purchase Agreement and the consummation of the Acquisition;
(g) The Agent shall have received a copy, certified by an
officer of the Borrower as true and complete, of the Purchase
Agreement, the Acquisition Note and of each other document or
instrument executed by the Borrower or any of its Subsidiaries in
connection with the Purchase Agreement, in each case as originally
executed and delivered, and no amendment or modification thereof shall
have been entered into on or prior to the Closing Date which shall not
have been approved, in writing, by the Agent;
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(h) The Agent shall have received original counterparts
of the Subordination Agreement executed by each of the parties
thereto;
(i) The Agent shall have received a certificate executed by
an officer of the Borrower as of the Closing Date stating that (i)
there does not exist any order, decree, judgment, ruling or injunction
which restrains the consummation of the Acquisition in the manner
contemplated by the Purchase Agreement, and there does not exist any
action, suit or proceeding, pending or threatened, in which there is a
reasonable possibility of an adverse decision, which would materially
adversely affect the ability of any Credit Party to perform its
obligations under the Credit Documents or the ability of the Lenders
to exercise their rights thereunder; (ii)(A) all of the conditions set
forth in the Purchase Agreement to the obligations of the Borrower and
its Subsidiaries to consummate the Acquisition have been satisfied in
all material respects, (B) the Acquisition has been consummated in a
manner consistent in all material respects with the terms of the
Purchase Agreement and (C) all required consents and approvals of any
applicable Governmental Authorities and all other required material
consents and approvals with respect to the Acquisition have been
obtained and all related waiting periods with respect to the
Acquisitions have expired or been waived; (iii) the purchase price
(exclusive of any contingent payments owing pursuant to the terms of
the Purchase Agreement) paid for the Acquired Assets is no greater
than an amount equal to $92,000,000 (which sum shall include all fees
and expenses in connection therewith); (iv) no material adverse change
has occurred since December 31, 1995, with respect to the consolidated
financial condition of BEST and its Subsidiaries; and (v) immediately
after giving effect to this Credit Agreement, the other Credit
Documents, the Acquisition and all other transactions contemplated by
this Credit Agreement and the Purchase Agreement to occur on such
date, (A) each Credit Party on a consolidated basis is Solvent, (B) no
Default or Event of Default exists and (C) the representations and
warranties set forth in Section 6 are true and correct in all material
respects;
(j) The Agent shall have received a legal opinion of
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A., counsel for the Credit Parties,
dated as of the Closing Date and substantially in the form of Schedule
5.1(j);
(k) The Agent shall have received a copy of a legal
opinion of Short Xxxxxxxx & Xxxxxxx P.L.L.C., counsel to BEST,
delivered to the Borrower in connection with the Purchase Agreement,
the Subordination Agreement and the Acquisition;
(l) The Agent shall have received, for its own account
and for the accounts of the Lenders, all fees and expenses
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required by this Credit Agreement or any other Credit Document to be
paid on or before the Closing Date; and
(m) The Agent shall have received such other documents,
agreements or information which may be reasonably requested by the
Agent.
5.2 Conditions to all Extensions of Credit. The obligations of
each Lender to make, convert or extend any Loan and of the Issuing Lender to
issue or extend Letters of Credit (including the initial Loans and the initial
Letter of Credit) are subject to satisfaction of the following conditions in
addition to satisfaction on the Closing Date of the conditions set forth in
Section 5.1:
(i) The Borrower shall have delivered (A) in the case
of any Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (B) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance
in accordance with the provisions of Section 2.2(b);
(ii) The representations and warranties set forth in
Section 6 shall be, subject to the limitations set forth therein,
true and correct in all material respects as of such date (except for
those which expressly relate to an earlier date);
(iii) There shall not have been commenced against the
Borrower or any Guarantor an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, or any case, proceeding or other action for the appointment of
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall
remain undismissed, undischarged or unbonded;
(iv) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto; and
(v) Immediately after giving effect to the making of
such Loan (and the application of the proceeds thereof) or to the
issuance of such Letter of Credit, as the case may be, (A) the sum of
the aggregate principal amount of outstanding Loans plus LOC
Obligations outstanding shall not exceed the Committed Amount, (B) the
LOC Obligations shall not exceed the LOC Committed Amount and (C) the
Consolidated Leverage Ratio shall not be greater than 3.00:1.00.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for the issuance of a Letter of Credit pursuant to Section
2.2(b) shall constitute a representation and warranty by the Borrower of the
correctness of
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the matters specified in subsections (ii), (iii), (iv) and (v) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
(a) The audited consolidated balance sheet of the Borrower and its
Subsidiaries as of December 31, 1995 and the audited consolidated statements of
earnings and statements of cash flows for the years ended December 31, 1995,
December 31, 1994 and December 31, 1993 have heretofore been furnished to each
Lender. Such financial statements (including the notes thereto) (i) have been
audited by Xxxxxx Xxxxxxxx LLP, (ii) have been prepared in accordance with GAAP
consistently, applied throughout the periods covered thereby and (iii) present
fairly (on the basis disclosed in the footnotes to such financial statements)
the consolidated financial condition, results of operations and cash flows of
the Borrower and its Subsidiaries as of such date and for such periods. The
unaudited interim balance sheets of the Borrower and its Subsidiaries as at the
end of, and the related unaudited interim statements of earnings and of cash
flows for, each quarterly period ended after December 31, 1995 and prior to the
Closing Date have heretofore been furnished to each Lender. Such interim
financial statements for each such quarterly period, (i) have been prepared in
accordance with Regulation S-X of the Securities and Exchange Commission
consistently applied throughout the periods covered thereby and (ii) present
fairly (on the basis disclosed in the footnotes to such financial statements)
the consolidated financial condition, results of operations and cash flows of
the Borrower and its Subsidiaries as of such date and for such periods. During
the period from December 31, 1995 to and including the Closing Date, there has
been no sale, transfer or other disposition by the Borrower or any of its
Subsidiaries of any material part of the business or property of the Borrower
and its Subsidiaries, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any capital stock of any
other person) material in relation to the consolidated financial condition of
the Borrower and its Subsidiaries, taken as a whole, in each case, which is not
reflected in the foregoing financial statements or in the notes thereto and has
not otherwise been disclosed in writing to the Lenders on or prior to the
Closing Date.
(b) The audited consolidated and consolidating balance sheet of BEST
and its Subsidiaries as of December 31, 1995 and the audited consolidated and
consolidating statements of earnings and statements of cash flows for the years
ended December 31, 1995 and December 31, 1994 have heretofore been furnished to
each Lender.
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Such financial statements (including the notes thereto) (i) have been audited
by Xxxxxx Xxxxxxxx & Co., LLP and (ii) to the best knowledge of the Credit
Parties, (A) have been prepared in accordance with GAAP consistently, applied
throughout the periods covered thereby and (B) present fairly (on the basis
disclosed in the footnotes to such financial statements) the consolidated
financial condition, results of operations and cash flows of BEST and its
Subsidiaries as of such date and for such periods. The unaudited interim
balance sheets of BEST and its Subsidiaries as at the end of, and the related
unaudited interim statements of earnings and of cash flows for, each fiscal
month and quarterly period ended after December 31, 1995 through, and
including, July 31, 1996 have heretofore been furnished to each Lender. To the
best knowledge of the Credit Parties, such interim financial statements for
each such quarterly period, (i) have been prepared in accordance with GAAP
consistently applied throughout the periods covered thereby and (ii) present
fairly (on the basis disclosed in the footnotes to such financial statements)
the consolidated financial condition, results of operations and cash flows of
BEST and its Subsidiaries as of such date and for such periods. To the best
knowledge of the Credit Parties, during the period from December 31, 1995 to
and including the Closing Date, there has been no sale, transfer or other
disposition by BEST or any of its Subsidiaries of any material part of the
business or property of BEST and its Subsidiaries and no purchase or other
acquisition by any of them of any business or property (including any capital
stock of any other person) material in relation to the financial condition of
the BEST and its Subsidiaries, taken as a whole, in each case, which is not
reflected in the foregoing financial statements or in the notes thereto and has
not otherwise been disclosed in writing to the Lenders on or prior to the
Closing Date.
(c) The pro forma combined balance sheet of the Borrower and its
Subsidiaries as of the Closing Date giving effect to the Acquisition in
accordance with the terms of the Purchase Agreement and reflecting estimated
purchase price accounting adjustments (heretofore furnished to each Lender) (i)
have been prepared by the Borrower and (ii) are based upon reasonable
assumptions made known to the Lenders and upon information not known to be
incorrect or misleading in any material respect.
(d) The projected consolidated and consolidating balance sheets of
the Borrower and its Subsidiaries (including the Acquired Assets) as at the end
of, and the related projected statements of earnings and of cash flows for, the
years ended December 31, 1997, December 31, 1998 and December 31, 1999
(heretofore furnished to each Lender) are based upon reasonable assumptions
made known to the Lenders and upon information not known to be incorrect or
misleading in any material respect.
(e) To the best knowledge of the Credit Parties, the projected
consolidated and consolidating income statement of BEST and its Subsidiaries as
at the end of, and the related capital uses statement for, the fiscal quarters
ended September 30, 1996 and
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December 31, 1996 and the fiscal years ended December 31, 1997, December 31,
1998 and December 31, 1999 (heretofore furnished to each Lender) are based upon
reasonable assumptions made known to the Lenders and upon information not known
to be incorrect or misleading in any material respect.
6.2 No Change; Dividends. Since December 31, 1995, (a) there has
been no development or event relating to or affecting the Borrower or any of
its Subsidiaries which has had or would be reasonably expected to have a
Material Adverse Effect and (b) except as permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the capital stock or other equity interest in the Borrower or any of its
Subsidiaries nor, except to the extent permitted under this Credit Agreement,
has any of the capital stock or other equity interest in the Borrower or any of
its Subsidiaries been redeemed, retired, purchased or otherwise acquired for
value by such Person.
6.3 Organization; Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is a corporation duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, except to the extent that the failure to have such legal
right would not be reasonably expected to have a Material Adverse Effect, (c)
is duly qualified as a foreign entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing would
not be reasonably expected to have a Material Adverse Effect, and (d) is in
compliance with all material Requirements of Law, except to the extent that the
failure to comply therewith would not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations. Each of the
Credit Parties has the corporate or other necessary power and authority, and
the legal right, to make, deliver and perform the Credit Documents and the
Acquisition Documents to which it is a party, and in the case of the Borrower,
to borrow hereunder, and has taken all necessary corporate action to authorize
the borrowings on the terms and conditions of this Credit Agreement and to
authorize the execution, delivery and performance of the Credit Documents and
the Acquisition Documents to which it is a party. No consent or authorization
of, filing with, notice to or other similar act by or in respect of, any
Governmental Authority or any other Person is required to be obtained or made
by or on behalf of any Credit Party in connection with the Acquisition, the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Credit Documents and the Acquisition Documents to which
such Credit Party is a party, except for (i) filings to perfect the Liens
created by the Collateral Documents
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and (ii) consents, authorizations, notices and filings described in Schedule
6.4, all of which have been obtained or made or have the status described in
such Schedule 6.4. This Credit Agreement has been, and each other Credit
Document and each Acquisition Document to which any Credit Party is a party
will be, duly executed and delivered on behalf of the Credit Parties. This
Credit Agreement constitutes, and each other Credit Document and each
Acquisition Document to which any Credit Party is a party when executed and
delivered will constitute, a legal, valid and binding obligation of such Credit
Party enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 No Legal Bar. The execution, delivery and performance of the
Credit Documents and the Acquisition Documents by the Credit Parties, the
borrowings hereunder and the use of the proceeds thereof (a) will not violate
any Requirement of Law or contractual obligation of the Borrower or any of its
Subsidiaries in any respect that would reasonably be expected to have a
Material Adverse Effect, (b) will not result in, or require, the creation or
imposition of any Lien (other than the Liens created by the Collateral
Documents) on any of the properties or revenues of any of the Borrower or any
of its Subsidiaries pursuant to any such Requirement of Law or contractual
obligation, and (c) will not violate or conflict with any provision of any
Credit Party's articles of incorporation or by-laws.
6.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Credit Parties, threatened by or against the
Borrower or any of its Subsidiaries or against any of their respective
properties or revenues which (a) relates to any of the Credit Documents or any
of the transactions contemplated hereby or thereby, (b) relates to any of the
Acquisition Documents or any of the transactions contemplated thereby or (c)
would be reasonably expected to have a Material Adverse Effect.
6.7 No Default. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any of their contractual obligations in
any respect which would be reasonably expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
6.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its material real property, and good title to, or a
valid leasehold interest in, all its other material property, and none of such
property is subject to any Lien, except for Permitted Liens.
6.9 Intellectual Property. Each of the Borrower and its
Subsidiaries owns, or has the legal right to use, all United States
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trademarks, tradenames, copyrights, technology, know-how and processes, if any,
necessary for each of them to conduct its business as currently conducted (the
"Intellectual Property") except for those the failure to own or have such legal
right to use would not be reasonably expected to have a Material Adverse
Effect. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Credit Party know
of any such claim, and the use of such Intellectual Property by the Borrower or
any of its Subsidiaries does not infringe on the rights of any Person, except
for such claims and infringements that in the aggregate, would not be
reasonably expected to have a Material Adverse Effect.
6.10 No Burdensome Restrictions. Except as previously disclosed in
writing to the Lenders on or prior to the Closing Date, no Requirement of Law
or contractual obligation of the Borrower or any of its Subsidiaries would be
reasonably expected to have a Material Adverse Effect.
6.11 Taxes. Each of the Borrower and its Subsidiaries has filed
or caused to be filed all United States federal income tax returns and all
other material tax returns which, to the best knowledge of the Credit Parties,
are required to be filed and has paid (a) all taxes shown to be due and payable
on said returns or (b) all taxes shown to be due and payable on any assessments
of which it has received notice made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any (i) taxes, fees or other charges with
respect to which the failure to pay, in the aggregate, would not have a
Material Adverse Effect or (ii) taxes, fees or other charges the amount or
validity of which are currently being contested and with respect to which
reserves in conformity with GAAP have been provided on the books of such
Person), and no tax Lien has been filed, and, to the best knowledge of the
Credit Parties, no claim is being asserted, with respect to any such tax, fee
or other charge.
6.12 ERISA.
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no Termination Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any Termination Event could reasonably
be expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the Code, and
any other applicable federal or state laws; and (iv) no lien in favor of the
PBGC or a Plan has arisen or is reasonably likely to arise on account of any
Plan.
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(b) The actuarial present value of all "benefit liabilities" under
all Single Employer Plans (determined within the meaning of Section 401(a)(2)
of the Code, utilizing the actuarial assumptions used to fund such Plans),
whether or not vested, did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the
current value of the assets of all such Plans.
(c) Neither the Borrower, any of the Subsidiaries of the Borrower
nor any ERISA Affiliate has incurred, or, to the best knowledge of the Credit
Parties, could be reasonably expected to incur, any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the
Borrower, any of the Subsidiaries of the Borrower nor any ERISA Affiliate would
become subject to any withdrawal liability under ERISA if the Borrower, any of
the Subsidiaries of the Borrower or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. Neither the Borrower, any of the Subsidiaries of the
Borrower nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241 of
ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan
is, to the best knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or may subject the
Borrower, any of the Subsidiaries of the Borrower or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975
of the Code, or under any agreement or other instrument pursuant to which the
Borrower, any of the Subsidiaries of the Borrower or any ERISA Affiliate has
agreed or is required to indemnify any person against any such liability.
6.13 Governmental Regulations, Etc.
(a) No part of the proceeds of the Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation G or Regulation U, or
for the purpose of purchasing or carrying or trading in any
securities. If requested by any Lender or the Agent, the Borrower
will furnish to the Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to
in said Regulation U. No indebtedness being reduced or retired out of
the proceeds of the Loans was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of Regulation
T. "Margin stock" within the meanings of Regulation U does not
constitute more than 25% of
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the value of the consolidated assets of the Borrower and its
Subsidiaries. None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use
of the proceeds of the Loans) will violate or result in a violation of
the Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended, or regulations issued pursuant thereto, or
Regulation G, T, U or X.
(b) Neither the Borrower nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act or the Investment Company Act of 1940,
each as amended. In addition, neither the Borrower nor any of its
Subsidiaries is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company",
or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(c) No director, executive officer or principal
shareholder of the Borrower or any of its Subsidiaries is a director,
executive officer or principal shareholder of any Lender. For the
purposes hereof the terms "director", "executive officer" and
"principal shareholder" (when used with reference to any Lender) have
the respective meanings assigned thereto in Regulation O issued by the
Board of Governors of the Federal Reserve System.
(d) Each of the Borrower and its Subsidiaries has
obtained all material licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its
respective Property and to the conduct of its business.
(e) Neither the Borrower nor any of its Subsidiaries is
in violation of any applicable statute, regulation or ordinance of the
United States of America, or of any state, city, town, municipality,
county or any other jurisdiction, or of any agency thereof (including
without limitation, environmental laws and regulations), which
violation could reasonably be expected to have a Material Adverse
Effect.
(f) Each of the Borrower and its Subsidiaries is current
with all material reports and documents, if any, required to be filed
with any state or federal securities commission or similar agency and
is in full compliance in all material respects with all applicable
rules and regulations of such commissions.
6.14 Subsidiaries. Schedule 6.14 sets forth all the Subsidiaries
of the Borrower at the Closing Date, the jurisdiction of their incorporation
and the direct or indirect ownership interest of the Borrower therein. All of
the outstanding capital
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stock of such Subsidiaries has been validly issued, is fully paid and
non-assessable and is owned by the Borrower or one or more of its Subsidiaries
free and clear of all Liens (other than Liens in favor of the Agent, for the
benefit of the Lenders). All of the outstanding capital stock of the Borrower
has been validly issued, is fully paid and non- assessable.
6.15 Purpose of Loans and Letters of Credit. The proceeds of the
Loans hereunder shall be used solely by the Borrower (i) to refinance existing
indebtedness of the Borrower under the Existing Credit Agreement, (ii) to
finance the Acquisition and (iii) for working capital and general corporate
purposes of the Credit Parties, including any Permitted Acquisitions. The
Letters of Credit shall be used only for or in connection with appeal bonds,
reimbursement obligations arising in connection with surety and reclamation
bonds, reinsurance, domestic or international trade transactions, worker's
compensation bonds and obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in the ordinary
course of business.
6.16 Environmental Matters.
(a) Each of the facilities and properties owned, leased or
operated by the Borrower or any of its Subsidiaries (the "Properties") and all
operations at the Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law with
respect to the Properties or the businesses operated by the Borrower or any of
its Subsidiaries (the "Businesses"), and there are no conditions relating to
the Businesses or Properties that could give rise to liability under any
applicable Environmental Laws.
(b) None of the Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Properties in
amounts or concentrations that constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has received
any written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Businesses, nor
does the Borrower or any of its Subsidiaries have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported
or disposed of from the Properties, or generated, treated, stored or disposed
of at, on or under any of the Properties or any other location, in each case by
or on behalf of the Borrower or any of its Subsidiaries in violation of, or in
a manner that would be reasonably likely to give rise to liability under, any
applicable Environmental Law.
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(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party, threatened,
under any Environmental Law to which the Borrower or any of its Subsidiaries is
or will be named as a party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Borrower or any of its Subsidiaries, the Properties or the
Businesses.
(f) There has been no release or, threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or related
to the operations (including, without limitation, disposal) of the Borrower or
any of its Subsidiaries in connection with the Properties or otherwise in
connection with the Businesses, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
6.17 Perfected Security Interests. Except as the result of or in
connection with a disposition permitted by Section 8.4(c), at all times after
execution and delivery of the Collateral Documents by the Credit Parties and
satisfaction of the conditions specified therein, the security interests
created in favor of the Agent, for the benefit of the Lenders, will constitute
valid, perfected security interests in the Collateral.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the
Commitments hereunder shall have terminated:
7.1 Information Covenants. The Borrower will furnish, or cause to
be furnished, to the Agent:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Borrower and its Subsidiaries, a consolidated and consolidating
balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal year, together with related
consolidated and consolidating statements of operations and
consolidated statements of retained earnings and of cash flows for
such fiscal year, setting forth in comparative form consolidated and,
if applicable, consolidating figures for the preceding fiscal year,
all such financial information described above to be in reasonable
form and detail and, and with respect to all such consolidated
financial statements, audited by independent certified public
accountants of recognized national standing reasonably acceptable to
the Agent and whose opinion shall be to the effect that such financial
statements have been
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prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the
audit or qualified as to the status of the Borrower and its
Subsidiaries as a going concern.
(b) Quarterly Financial Statements. As soon as
available, and in any event within 45 days after the close of each
fiscal quarter of the Borrower and its Subsidiaries (other than the
fourth fiscal quarter, in which case 90 days after the end thereof) a
consolidated and consolidating balance sheet and income statement of
the Borrower and its Subsidiaries, as of the end of such fiscal
quarter, together with related consolidated and consolidating
statements of operations and consolidated statements of retained
earnings and of cash flows for such fiscal quarter in each case
setting forth in comparative form consolidated and, if applicable,
consolidating figures for the corresponding period of the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of the chief financial officer of the
Borrower to the effect that such quarterly financial statements fairly
present in all material respects the financial condition of the
Borrower and its Subsidiaries and have been prepared in accordance
with GAAP, subject to changes resulting from audit and normal year-end
audit adjustments.
(c) Officer's Certificates.
(i) At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a
certificate of the chief financial officer of the Borrower
substantially in the form of Schedule 7.1(c)(i),
(A) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end
of each such fiscal period and (B) stating that no Default or
Event of Default exists, or if any Default or Event of Default
does exist, specifying the nature and extent thereof and what
action the Borrower proposes to take with respect thereto.
(ii) Prior to the consummation of any Pro Forma
Transaction, a certificate of the chief financial officer of
the Borrower in the form of Schedule 7.1(c)(ii),
(A) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof on a Pro
Forma Basis and (B) stating that, after giving effect on a Pro
Forma Basis to such Pro Forma Transaction, no Default or Event
of Default would exist.
(d) Annual Business Plan and Budgets. At least 15 days
prior to the end of each fiscal year of the Borrower, beginning with
the fiscal year ending December 31, 1997, an annual business plan and
budget of the Borrower containing,
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among other things, pro forma financial statements for the next fiscal
year.
(e) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section
7.1(a), a certificate of the accountants conducting the annual audit
stating that they have reviewed this Credit Agreement and stating
further whether, in the course of their audit, they have become aware
of any Default or Event of Default and, if any such Default or Event
of Default exists, specifying the nature and extent thereof.
(f) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by
independent accountants to the Borrower or any of its Subsidiaries in
connection with any annual, interim or special audit of the books of
such Person.
(g) Reports. Promptly upon transmission or receipt
thereof, (a) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as the Borrower or any of its Subsidiaries shall
send to its shareholders or to a holder of any Indebtedness owed by
the Borrower or any of its Subsidiaries in its capacity as such a
holder and (b) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health
and safety matters, or any successor agencies or authorities
concerning environmental, health or safety matters.
(h) Notices. Upon obtaining knowledge thereof, the
Borrower will give written notice to the Agent immediately of (a) the
occurrence of an event or condition consisting of a Default or Event
of Default, specifying the nature and existence thereof and what
action the Credit Parties propose to take with respect thereto, and
(b) the occurrence of any of the following with respect to the
Borrower or any of its Subsidiaries (i) the pendency or commencement
of any litigation, arbitral or governmental proceeding against such
Person which if adversely determined is likely to have a Material
Adverse Effect, (ii) the institution of any proceedings against such
Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of
which would likely have a Material Adverse Effect, or (iii) any notice
or determination concerning the imposition of any withdrawal
liability by a Multiemployer Plan against such Person or any ERISA
Affiliate, the determination that a
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Multiemployer Plan is, or is expected to be, in reorganization within
the meaning of Title IV of ERISA or the termination of any Plan.
(i) ERISA. Upon obtaining knowledge thereof, the
Borrower will give written notice to the Agent promptly (and in any
event within five business days) of: (i) of any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, a Termination Event; (ii) with respect to
any Multiemployer Plan, the receipt of notice as prescribed in ERISA
or otherwise of any withdrawal liability assessed against the Borrower
or any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all
amounts which the Borrower, any of the Subsidiaries of the Borrower or
any ERISA Affiliate is required to contribute to each Plan pursuant to
its terms and as required to meet the minimum funding standard set
forth in ERISA and the Code with respect thereto; or (iv) any change
in the funding status of any Plan that could have a Material Adverse
Effect, together with a description of any such event or condition or
a copy of any such notice and a statement by the chief financial
officer of the Borrower briefly setting forth the details regarding
such event, condition, or notice, and the action, if any, which has
been or is being taken or is proposed to be taken by the Credit
Parties with respect thereto. Promptly upon request, the Borrower
shall furnish the Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return
(Form 5500 series), as well as all schedules and attachments thereto
required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
(j) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of the Borrower or any of its
Subsidiaries as the Agent or the Required Lenders may reasonably
request.
7.2 Preservation of Existence and Franchises. Except as a result
of or in connection with a dissolution, merger or disposition of a Subsidiary
permitted under Section 8.4, the Borrower will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority.
7.3 Books and Records. The Borrower will, and will cause each of
its Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with good accounting
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practices on the basis of GAAP (including the establishment and maintenance of
appropriate reserves).
7.4 Compliance with Law. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders,
and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its property if noncompliance with any such law, rule,
regulation, order or restriction would have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness. Except as otherwise
provided pursuant to the terms of the definition of "Permitted Liens" set forth
in Section 1.1, the Borrower will, and will cause each of its Subsidiaries to,
pay and discharge (i) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (ii) all lawful claims (including claims
for labor, materials and supplies) which, if unpaid, might give rise to a Lien
upon any of its properties, and (iii) except as prohibited hereunder, all of
its other Indebtedness as it shall become due.
7.6 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self- insurance retentions
as are in accordance with normal industry practice. Within thirty (30) days of
the Closing Date, the Borrower will, or will cause to be, delivered to the
Agent, in form and substance satisfactory to the Agent, copies of insurance
policies or certificates of insurance of the Credit Parties evidencing
liability and casualty insurance meeting the requirements of this Section 7.6.
7.7 Maintenance of Property. The Borrower will, and will cause
each of its Subsidiaries to, maintain and preserve its properties and equipment
material to the conduct of its business in good repair, working order and
condition, normal wear and tear and casualty and condemnation excepted, and
will make, or cause to be made, in such properties and equipment from time to
time all repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto as may be needed or proper, to the extent and in the
manner customary for companies in similar businesses.
7.8 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by
which it is bound.
7.9 Use of Proceeds. The Borrower will use the proceeds of the
Loans and will use the Letters of Credit solely for the purposes set forth in
Section 6.15.
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7.10 Audits/Inspections. Upon reasonable notice and during normal
business hours, the Borrower will, and will cause each of its Subsidiaries to,
permit representatives appointed by the Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Agent or its representatives
to investigate and verify the accuracy of information provided to the Lenders
and to discuss all such matters with the officers, employees and
representatives of such Person.
7.11 Financial Covenants.
(a) Consolidated Net Worth. Consolidated Net Worth at
all times shall be no less than $157,500,000, increased on a
cumulative basis by (i) as of the last day of each fiscal quarter
(commencing with the first of such dates to occur after the Closing
Date), an amount equal to 50% of Consolidated Net Income (without
deduction for any losses) for the fiscal quarter then ended and (ii)
as of the date of any Equity Transaction consummated on or after the
Closing Date, 100% of the Net Proceeds of such Equity Transaction.
(b) Consolidated Leverage Ratio. The Consolidated
Leverage Ratio as of the last day of each fiscal quarter (commencing
with December 31, 1996) shall be no greater than 3.00:1.00.
(c) Consolidated Fixed Charge Coverage Ratio. The
Consolidated Fixed Charge Coverage Ratio as of the last day of each
fiscal quarter (commencing with December 31, 1996) shall be no less
than 1.75:1.00.
(d) Consolidated Interest Coverage Ratio. The
Consolidated Interest Coverage Ratio as of the last day of each fiscal
quarter (commencing with December 31, 1996) shall be no less than
4.00:1.00.
(e) Consolidated Current Ratio. The Consolidated Current
Ratio shall be no less than 1.25:1.00 at any time.
7.12 Additional Credit Parties. At the time that any Person
becomes a Subsidiary of the Borrower, the Borrower shall so notify the Agent
and shall (a) cause such Person to execute a Joinder Agreement in substantially
the form of Schedule 7.12, (b) cause 100% of the capital stock of such Person
to be delivered to the Agent (together with undated stock powers signed in
blank) and pledged to the Agent, for the benefit of the Lenders, pursuant to an
appropriate pledge agreement(s) in substantially the form of the Pledge
Agreement and otherwise in form acceptable to the Agent and (c) deliver such
other documentation as the Agent may reasonably request in connection with the
foregoing, including, without
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limitation, certified resolutions and other organizational and authorizing
documents of such Person, appropriate UCC-1 financing statements and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above), all in form, content and scope reasonably satisfactory to
the Agent.
7.13 Ownership of Subsidiaries. Except to the extent otherwise
provided in Section 8.11, the Borrower shall, directly or indirectly, own at
all times 100% of the capital stock of each of its Subsidiaries.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the
Commitments hereunder shall have terminated:
8.1 Indebtedness. The Borrower will not, nor will it permit any of
its Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness of the Borrower and any of its
Subsidiaries set forth in Schedule 8.1;
(c) purchase money Indebtedness (including Capital
Leases) hereafter incurred by the Borrower or any of its Subsidiaries
to finance the purchase of fixed assets provided that (i) the total of
all such Indebtedness (for all such Persons taken together shall not
exceed an aggregate principal amount of $3,000,000 at any one time
outstanding (including any such Indebtedness referred to in subsection
(b) above (other than any such Indebtedness incurred in connection
with acquisitions)); (ii) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing;
(d) obligations of the Borrower in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) Intercompany Indebtedness incurred in the ordinary
course of business and consistent with past practices or for cash
management purposes;
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(f) Subordinated Indebtedness; and
(g) in addition to the Indebtedness otherwise permitted
by this Section 8.1, other Indebtedness hereafter incurred by the
Borrower or any of its Subsidiaries provided that (i) the loan
documentation with respect to such Indebtedness shall not contain
covenants or default provisions relating to the Borrower and its
Subsidiaries that are more restrictive than the covenants and default
provisions contained in the Credit Documents, (ii) on the date of
incurrence of such Indebtedness after giving effect on a Pro Forma
Basis to the incurrence of such Indebtedness of the Borrower or any of
its Subsidiaries, no Default or Event of Default would exist
hereunder, and (iii) the aggregate principal amount of such
Indebtedness shall not exceed $2,000,000 at any time.
8.2 Liens. The Borrower will not, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or permit to exist any Lien
with respect to any of their Property, whether now owned or after acquired,
except for Permitted Liens.
8.3 Nature of Business. The Borrower will not permit any of its
Subsidiaries to substantively alter the character or conduct of the business
conducted by such Person as of the Closing Date.
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc. The
Borrower will not, nor will it permit any of its Subsidiaries to:
(a) except in connection with a disposition of assets
permitted by the terms of subsection (c) below, dissolve, liquidate or
wind up their affairs;
(b) enter into any transaction of merger or consolidation;
provided, however, that, so long as no Default or Event of Default
would be directly or indirectly caused as a result thereof, any Credit
Party (other than the Borrower) may merge or consolidate with any
other Credit Party (other than the Borrower);
(c) sell, lease, transfer or otherwise dispose of any
Property other than (i) the sale or disposition of machinery and
equipment no longer used or useful in the conduct of such Person's
business, (ii) other sales of assets (but not accounts receivable,
except delinquent accounts sold for collection purposes only),
provided that, after giving effect to such sale or other disposition,
the aggregate book value of assets sold or otherwise disposed of
pursuant to this clause (ii) does not exceed $500,000 in any fiscal
year and (iii) the grant of any option or other right to purchase any
asset in a transaction which would be permitted under the provisions
of the foregoing clause (ii), provided that no Default or Event of
Default has occurred and is continuing at the time of such grant;
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(d) acquire all or any portion of the capital stock or
securities of any other Person or purchase, lease or otherwise acquire
(in a single transaction or a series of related transactions) all or
any substantial part of the Property of any other Person, except for
Permitted Acquisitions;
(e) become a general partner in any general or limited
partnership, joint venture or similar arrangement.
8.5 Advances, Investments, Loans, etc. The Borrower will not, nor
will it permit any of its Subsidiaries to, make Investments in or to any
Person, except for Permitted Investments.
8.6 Restricted Payments. The Borrower will not, nor will it permit
any of its Subsidiaries to, directly or indirectly declare, order, make or set
apart any sum for or pay any Restricted Payment, except (i) to make dividends
payable solely in the same class of capital stock of such Person, (ii) to make
dividends or other distributions payable to the Borrower (directly or
indirectly through Subsidiaries of the Borrower), (iii) as permitted by Section
8.7 and (iv) to make payments on Subordinated Indebtedness in accordance with
any subordination provisions applicable thereto.
8.7 Prepayments of Indebtedness, etc. The Borrower will not, nor
will it permit any of its Subsidiaries to, (i) after the issuance thereof,
amend or modify (or permit the amendment or modification of) any of the terms
of any Indebtedness if such amendment or modification would add or change any
terms in a manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, or (ii) (A) make (or
give any notice with respect thereto) any voluntary or optional payment or
prepayment or redemption or acquisition for value of (including without
limitation, by way of depositing money or securities with the trustee with
respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any Funded Indebtedness or (B) amend, modify or change
its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document) where such
change would have a Material Adverse Effect.
8.8 Transactions with Affiliates. The Borrower will not, nor will it
permit any of its Subsidiaries to, enter into or permit to exist any
transaction or series of transactions with any officer, director, shareholder,
Subsidiary or Affiliate of such Person other than (i) advances of working
capital to any Credit Party, (ii) transfers of cash and assets to any Credit
Party, (iii) transactions permitted by Section 8.1, Section 8.4, Section 8.5
(other than pursuant to clause (vii) of the definition of "Permitted
Investments" set forth in Section 1.1), or Section 8.6, (iv) normal
compensation and reimbursement of expenses of officers and directors and (v)
except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in
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the ordinary course of such Person's business on terms and conditions
substantially as favorable to such Person as would be obtainable by it in a
comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
8.9 Fiscal Year. The Borrower will not, nor will it permit any of
its Subsidiaries to, change its fiscal year.
8.10 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions, etc. The Borrower will not, nor will it permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Person to (i)
pay dividends or make any other distribution on any of such Person's capital
stock, (ii) subject to subordination provisions under any Intercompany
Indebtedness, pay any Indebtedness owed to the Borrower or any other Credit
Party, (iii) make loans or advances to any other Credit Party or (iv) transfer
any of its Property to any other Credit Party, except for encumbrances or
restrictions existing under or by reason of (A) customary non-assignment
provisions in any lease governing a leasehold interest and (B) this Credit
Agreement and the other Credit Documents.
8.11 Issuance and Sale of Subsidiary Stock. The Borrower will not,
nor will it permit any of its Subsidiaries to, except as otherwise permitted
under the terms of Section 8.4(c), sell, transfer or otherwise dispose of, any
shares of capital stock of any of its Subsidiaries or permit any of its
Subsidiaries to issue, sell or otherwise dispose of, any shares of capital
stock of any of its Subsidiaries.
8.12 Sale Leasebacks. The Borrower will not, nor will it permit any
of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any Property (whether real or personal
or mixed), whether now owned or hereafter acquired, (i) which such Person has
sold or transferred or is to sell or transfer to any other Person other than a
Credit Party or (ii) which such Person intends to use for substantially the
same purpose as any other Property which has been sold or is to be sold or
transferred by such Person to any other Person in connection with such lease.
8.13 No Further Negative Pledges. Except with respect to
prohibitions against other encumbrances on specific Property encumbered to
secure payment of particular Indebtedness (which Indebtedness relates solely to
such specific Property, and improvements and accretions thereto, and is
otherwise permitted hereby), the Borrower will not, nor will it permit any of
its Subsidiaries to, enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien
upon its properties or assets, whether now
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owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation.
8.14 No Foreign Subsidiaries. Neither the Borrower nor any of its
Subsidiaries will create, acquire or permit to exist any direct or indirect
Subsidiary of such Credit Party which is not incorporated or organized under
the laws of any State of the United States or the District of Columbia.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal
of any of the Loans or of any reimbursement obligations
arising from drawings under Letters of Credit, or
(ii) default, and such defaults shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees
or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.9, 7.11, 7.12 or 8.1 through 8.14, inclusive, or
(ii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this Section
9.1) contained in this Credit Agreement and such default shall
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continue unremedied for a period of at least 30 days after the
earlier of a responsible officer of a Credit Party becoming
aware of such default or notice thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents (subject to applicable
grace or cure periods, if any), or (ii) except as the result of or in
connection with a dissolution, merger or disposition of a Subsidiary
permitted under Section 8.4, any Credit Document shall fail to be in
full force and effect or to give the Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby,
or any Credit Party shall state any of the foregoing in writing; or
(e) Guaranties. Except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any material provision
thereof shall cease to be in full force and effect, or any Guarantor
(including any Additional Credit Party) hereunder or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur
with respect to the Borrower or any of its Subsidiaries; or
(g) Defaults under Other Agreements.
(i) The Borrower or any of its Subsidiaries shall default
in the performance or observance (beyond the applicable grace period
with respect thereto, if any) or any material obligation or condition
of any contract or lease material to the Borrower and its Subsidiaries
taken as a whole; or
(ii) With respect to the Acquisition Note or any other
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $1,000,000 in the aggregate for the Borrower
and its Subsidiaries taken as a whole, (A) the Borrower or any of its
Subsidiaries shall (1) default in any payment (beyond the applicable
grace period with respect thereto, if any) with respect to any such
Indebtedness, or (2) the occurrence and continuance of a default in
the observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event or condition shall occur or
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condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity; or (B) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a
liability of $1,000,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if
such event or condition could be expected to involve possible taxes,
penalties, and other liabilities in an aggregate amount in excess of
$1,000,000: (1) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether
or not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate in favor of the PBGC or a Plan; (2) a Termination
Event shall occur with respect to a Single Employer Plan, which is, in
the reasonable opinion of the Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (3) a
Termination Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Agent, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency or (within the
meaning of Section 4245 of ERISA) such Plan; or (4) any prohibited
transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or breach of fiduciary responsibility shall occur
which may subject the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate has agreed or is required to indemnify
any person against any such liability; or
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(j) Nature of Business. The Borrower shall engage in any
business, activity or operations other than owning and holding the
capital stock of its Subsidiaries and such business activities
incidental or related thereto (including acting as Borrower hereunder
and pledging its assets to the Agent, for the benefit of the Lenders,
pursuant to the Collateral Documents); or
(k) Ownership. There shall occur a Change of Control; or
(l) Purchase Price. (i) The aggregate purchase price
(including any post-closing adjustments, but excluding any contingent
payments owing pursuant to the terms of the Purchase Agreement) paid
by the Borrower for the Acquired Assets pursuant to the Purchase
Agreement exceeds $92,000,000 (which sum shall include all fees and
expenses in connection therewith); or (ii) the aggregate purchase
price, including any post-closing adjustments, paid by the Borrower
for the assets of Software Services exceeds $15,000,000 (which sum
shall include all fees and expenses in connection therewith); or
(m) Amendment of Acquisition Documents. Any Acquisition
Document shall be amended, restated, supplemented or otherwise
modified without the prior written approval of the Required Lenders.
9.2 Acceleration; Remedies. Upon the occurrence of an Event of
Default, and at any time thereafter unless and until such Event of Default has
been waived by the Required Lenders or cured to the satisfaction of the
Required Lenders (pursuant to the voting procedures in Section 11.6), the Agent
shall, upon the request and direction of the Required Lenders, by written
notice to the Credit Parties take any of the following actions:
(i) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(ii) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by
the Borrower to the Agent and/or any of the Lenders hereunder to be
due whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
(iii) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional
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cash, to be held by the Agent, for the benefit of the Lenders, in a
cash collateral account as additional security for the LOC Obligations
in respect of subsequent drawings under all then outstanding Letters
of Credit in an amount equal to the maximum aggregate amount which may
be drawn under all Letters of Credits then outstanding.
(iv) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations arising from drawings under
Letters of Credit, all accrued interest in respect thereof, all accrued and
unpaid Fees and other indebtedness or obligations owing to the Agent and/or any
of the Lenders hereunder automatically shall immediately become due and payable
without the giving of any notice or other action by the Agent or the Lenders.
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 any Credit Party or any of their
respective Affiliates.
10.2 Delegation of Duties. The Agent may execute any of their
respective duties hereunder or under the other Credit Documents by or through
agents or attorneys-in-fact and shall be
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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. The Agent and its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall not be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under or
in connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct),
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any certificate,
report, document, financial statement or other written or oral statement
referred to or provided for in, or received by the Agent under or in connection
herewith or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure
of any Credit Party to perform its obligations hereunder or thereunder. The
Agent shall not be responsible to any Lender for the effectiveness,
genuineness, validity, enforceability, 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
the use of the Letters of Credit or of the existence or possible existence of
any Default or Event of Default or to inspect the properties, books or records
of the Credit Parties or any of their respective Affiliates.
10.4 Reliance on Communications. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any of
the Credit Parties, independent accountants and other experts selected by the
Agent with reasonable care). The Agent may deem and treat the Lenders as the
owner of their respective interests hereunder for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Agent in accordance with Section 11.3(b) hereof. The Agent shall be
fully justified in failing or refusing to take any action under this Credit
Agreement or under any of the other Credit Documents
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unless it shall first receive such advice or concurrence of the Required
Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, hereunder or under any of the other Credit Documents in accordance
with a request of the Required Lenders (or to the extent specifically provided
in Section 11.6, all the Lenders) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
10.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that each of the Agent and its officers, directors, employees,
agents, attorneys-in-fact or affiliates has not made any representations or
warranties to it and that no act by the Agent or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party or
any of their respective Affiliates, 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, the other Credit Parties or their respective
Affiliates 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,
the other Credit Parties and their respective Affiliates. 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, the other Credit Parties or any
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of their respective Affiliates which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7 Indemnification. The Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitments (or if the Commitments have expired or been terminated,
in accordance with the respective principal amounts of outstanding Loans and
Participation Interests of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including without limitation at any time following the final payment of
all of the obligations of the Borrower hereunder and under the other Credit
Documents) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Credit Agreement
or the other Credit Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to
the Agent for any purpose shall, in the opinion of the Agent, be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.8 Agent in its Individual Capacity. The Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower, its Subsidiaries or their respective Affiliates as
though the Agent were not the Agent hereunder. With respect to the Loans made
by and all obligations of the Borrower hereunder and under the other Credit
Documents, the Agent shall have the same rights and powers under this Credit
Agreement as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
10.9 Successor Agent. The Agent may, at any time, resign upon 20
days' written notice to the Lenders, and be removed with or without cause by
the Required Lenders upon 30 days' written notice to the Agent. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent; provided that, so long as no Default or Event of Default has
occurred and is continuing, such successor Agent shall be reasonably acceptable
to the Borrower. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment,
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within 30 days after the notice of resignation or notice of removal, 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 $400,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations as Agent, as appropriate, under this Credit
Agreement and the other Credit Documents and the provisions of this Section
10.9 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (i) when delivered, (ii) when transmitted via telecopy (or other
facsimile device) to the number set out below, (iii) the day following the day
on which the same has been delivered prepaid to a reputable national overnight
air courier service, or (iv) the third Business Day following the day on which
the same is sent by certified or registered mail, postage prepaid, in each case
to the respective parties at the address, in the case of the Borrower,
Guarantors and the Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 2.1(a), or at such other address as such party may specify by
written notice to the other parties hereto:
if to the Borrower or the Guarantors:
Personnel Group of America, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
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NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
Telephone: (000)000-0000
Telecopy: (000)000-0000
11.2 Right of Set-Off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind (all of which rights being hereby expressly
waived), to set-off and to appropriate and apply any and all deposits (general
or special) and any other indebtedness at any time held or owing by such Lender
(including, without limitation branches, agencies or Affiliates of such Lender
wherever located) to or for the credit or the account of any Credit Party
against obligations and liabilities of such Person to such Lender hereunder,
under the Notes, the other Credit Documents or otherwise, irrespective of
whether such Lender shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of such Lender subsequent thereto. Any Person purchasing
a participation in the Loans and Commitments hereunder pursuant to Section 3.13
or Section 11.3(d) may exercise all rights of set-off with respect to its
participation interest as fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that none of
the Credit Parties may assign or transfer any of its interests without
prior written consent of the Lenders; provided further that the rights
of each Lender to transfer, assign or grant participations in its
rights and/or obligations hereunder shall be limited as set forth in
this Section 11.3, provided however that nothing herein shall prevent
or prohibit any Lender from (i) pledging its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from
such Federal Reserve Bank, or (ii) granting assignments or selling
participations in such Lender's Loans and/or Commitments hereunder to
its parent company and/or to any Affiliate or Subsidiary of such
Lender.
(b) Assignments. Each Lender may assign all or a portion
of its rights and obligations hereunder, pursuant to an assignment
agreement substantially in the form of Schedule 11.3(b), to (i) any
Lender or any Affiliate or Subsidiary of
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a Lender, or (ii) any other commercial bank, financial institution or
"accredited investor" (as defined in Regulation D of the
Securities and Exchange Commission) reasonably acceptable to the
Agent and, so long as no Default or Event of Default has occurred and
is continuing, the Borrower; provided that (i) any such assignment
(other than any assignment to an existing Lender) shall be in a
minimum aggregate amount of $5,000,000 (or, if less, the remaining
amount of the Commitment being assigned by such Lender) of the
Commitments and in integral multiples of $1,000,000 above such amount
and (ii) each such assignment shall be of a constant, not varying,
percentage of all such Lender's rights and obligations under this
Credit Agreement. Any assignment hereunder shall be effective upon
delivery to the Agent of written notice of the assignment together
with a transfer fee of $3,500 payable to the Agent for its own account
from and after the later of (i) the effective date specified in the
applicable assignment agreement and (ii) the date of recording of such
assignment in the Register pursuant to the terms of subsection (c)
below. The assigning Lender will give prompt notice to the Agent and
the Borrower of any such assignment. Upon the effectiveness of any
such assignment (and after notice to, and (to the extent required
pursuant to the terms hereof), with the consent of, the Borrower as
provided herein), the assignee shall become a "Lender" for all
purposes of this Credit Agreement and the other Credit Documents and,
to the extent of such assignment, the assigning Lender shall be
relieved of its obligations hereunder to the extent of the Loans and
Commitment components being assigned. Along such lines the Borrower
agrees that upon notice of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the assigning
Lender and to the assignee separate promissory notes in the amount of
their respective interests substantially in the form of the original
Note (but with notation thereon that it is given in substitution for
and replacement of the original Note or any replacement notes
thereof). By executing and delivering an assignment agreement in
accordance with this Section 11.3(b), the assigning Lender thereunder
and the assignee thereunder shall be deemed to confirm to and agree
with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse
claim; (ii) except as set forth in clause (i) above, such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or any of their respective
Affiliates or the performance or observance by any Credit
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Party of any of its obligations under this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such
assignment agreement; (iv) such assignee confirms that it has received
a copy of this Credit Agreement, the other Credit Documents and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such assignment
agreement; (v) such assignee will independently and without reliance
upon the Agent, such assigning Lender or any other Lender, and based
on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement and the other Credit
Documents; (vi) such assignee appoints and authorizes the Agent to
take such action on its behalf and to exercise such powers under this
Credit Agreement or any other Credit Document as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which
by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Maintenance of Register. The Agent shall maintain at
one of its offices in Charlotte, North Carolina a copy of each Lender
assignment agreement delivered to it in accordance with the terms of
subsection (b) above and a register for the recordation of the
identity of the principal amount, type and Interest Period of each
Loan outstanding hereunder, the names, addresses and the Commitments
of the Lenders pursuant to the terms hereof from time to time (the
"Register"). The Agent will make reasonable efforts to maintain the
accuracy of the Register and to promptly update the Register from time
to time, as necessary. 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 pursuant to the terms hereof as a Lender hereunder for
all purposes of this Credit Agreement. The Register shall be
available for inspection by the Borrower and each Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer,
grant or assign participations in all or any part of such Lender's
interests and obligations hereunder; provided that (i) such selling
Lender shall remain a "Lender" for all purposes under this Credit
Agreement (such selling Lender's obligations under the Credit
Documents remaining unchanged) and the participant shall not
constitute a Lender hereunder, (ii) no such participant shall have, or
be granted, rights to approve any amendment or waiver relating to this
Credit Agreement or the other Credit Documents except to the extent
any
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such amendment or waiver would (A) reduce the principal of or rate of
interest on or Fees in respect of any Loans in which the participant
is participating, (B) postpone the date fixed for any payment of
principal (including extension of the Termination Date or the date of
any mandatory prepayment), interest or Fees in which the participant
is participating or (C) except as expressly provided in the Credit
Documents, release all or substantially all of the Collateral or
release any Guarantor from its guaranty obligations hereunder, and
(iii) sub-participations by the participant (except to an affiliate,
parent company or affiliate of a parent company of the participant)
shall be prohibited. In the case of any such participation, the
participant shall not have any rights under this Credit Agreement or
the other Credit Documents (the participant's rights against the
selling Lender in respect of such participation to be those set forth
in the participation agreement with such Lender creating such
participation) and all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not sold such participation,
provided, however, that such participant shall be entitled to receive
additional amounts under Sections 3.6, 3.9, 3.10 and 3.11 on the same
basis as if it were a Lender.
11.4 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Agent or any Lender and any of the Credit Parties shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the Agent or any
Lender would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle the Borrower or any other Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 Payment of Expenses, etc. The Borrower agrees to: (i) pay all
reasonable out-of-pocket costs and expenses (A) of the Agent in connection with
the negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of Xxxxx & Xxx Xxxxx, PLLC, special counsel to the Agent) and
any amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by
the Credit Parties under this Credit Agreement and (B) of the Agent and the
Lenders in connection with enforcement of the Credit Documents and the
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documents and instruments referred to therein (including, without limitation,
in connection with any such enforcement, the reasonable fees and disbursements
of counsel for the Agent and each of the Lenders); (ii) pay and hold each of
the Lenders harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save each of the
Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of (A) any investigation, litigation or other
proceeding (whether or not any Lender is a party thereto) related to the
entering into and/or performance of any Credit Document or the use of proceeds
of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding or (B) the presence or Release of any Materials of Environmental
Concern at, under or from any Property owned, operated or leased by the
Borrower or any of its Subsidiaries, or the failure by the Borrower or any of
its Subsidiaries to comply with any Environmental Law (but excluding, in the
case of either of clause (A) or (B) above, any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of gross
negligence or willful misconduct on the part of the Person to be indemnified).
11.6 Amendments, Waivers and Consents. Neither this Credit Agreement
nor any other Credit Document nor any of the terms hereof or thereof may be
amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing entered into by, or
approved in writing by, the Required Lenders and the Borrower, provided that no
such amendment, change, waiver, discharge or termination shall, without the
consent of each Lender:
(i) extend the final maturity of any Loan, or any portion
thereof;
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) on any Loan or fees
hereunder;
(iii) reduce the principal amount on any Loan, or increase
the Commitments of the Lenders over the amount thereof in effect (it
being understood and agreed that a waiver of any Default or Event of
Default or of a mandatory reduction in the total commitments shall not
constitute a change in the terms of any Commitment of any Lender);
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(iv) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4, release all or substantially all of (A) the Guarantors
from the guaranty obligations hereunder or (B) the Collateral;
(v) amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.10, 3.11, 3.12, 3.13, 9.1(a), 11.2, 11.3, 11.5
or 11.9;
(vi) reduce any percentage specified in, or otherwise
modify, the definition of "Required Lenders;" or
(vii) consent to the assignment or transfer by the Borrower
(or any Guarantor) of any of its rights and obligations under (or in
respect of) the Credit Documents to which it is a party.
No provision of Section 2.2 may be amended without the consent of the Issuing
Lender and no provision of Section 10 may be amended without the consent of the
Agent.
11.7 Counterparts. This Credit Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart.
11.8 Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning
or construction of any provision of this Credit Agreement.
11.9 Survival. All indemnities set forth herein, including, without
limitation, in Section 2.2(i), 3.9, 3.11, 10.7 or 11.5 shall survive the
execution and delivery of this Credit Agreement, the making of the Loans, the
issuance of the Letters of Credit, the repayment of the Loans, LOC Obligations
and other obligations under the Credit Documents and the termination of the
Commitments hereunder, and all representations and warranties made by the
Credit Parties herein shall survive delivery of the Notes and the making of the
Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or
proceeding with respect to this Credit Agreement or any other Credit
Document may be brought in the courts of the State of North Carolina
in Mecklenburg County, or of the United States for the Western
District of North Carolina,
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and, by execution and delivery of this Credit Agreement, each of the
Credit Parties hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Credit Parties further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to
it at the address set out for notices pursuant to Section 11.1, such
service to become effective three (3) days after such mailing.
Nothing herein shall affect the right of the Agent to serve process in
any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against any Credit Party in any other
jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives
any objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT,
THE LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY
OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Severability. If any provision of any of the Credit Documents
is determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
11.12 Entirety. This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
11.13 Binding Effect; Termination. (a) This Credit Agreement shall
become effective at such time on or after the Closing Date when it shall have
been executed by the Borrower, the Guarantors and the Agent, and the Agent
shall have received copies hereof (telefaxed or otherwise) which, when taken
together, bear the signatures of each Lender, and thereafter this Credit
Agreement shall be binding upon and inure to the benefit of the Borrower, the
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Guarantors, the Agent and each Lender and their respective successors and
assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding and until all of the Commitments
hereunder shall have expired or been terminated.
11.14 Confidentiality. The Agent and the Lenders agree to keep
confidential (and to cause their respective affiliates, officers, directors,
employees, agents and representatives to keep confidential) all information,
materials and documents furnished to the Agent or any such Lender by or on
behalf of any Credit Party (whether before or after the Closing Date) which
relates to the Borrower or any of its Subsidiaries (the "Information").
Notwithstanding the foregoing, the Agent and each Lender shall be permitted to
disclose Information (i) to its affiliates, officers, directors, employees,
agents and representatives in connection with its participation in any of the
transactions evidenced by this Credit Agreement or any other Credit Documents
or the administration of this Credit Agreement or any other Credit Documents;
(ii) to the extent required by applicable laws and regulations or by any
subpoena or similar legal process, or requested by any Governmental Authority;
(iii) to the extent such Information (A) becomes publicly available other than
as a result of a breach of this Credit Agreement or any agreement entered into
pursuant to clause (iv) below, (B) becomes available to the Agent or such
Lender on a non-confidential basis from a source other than a Credit Party or
(C) was available to the Agent or such Lender on a non-confidential basis prior
to its disclosure to the Agent or such Lender by a Credit Party; (iv) to any
assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
specifically agrees in a writing furnished to and for the benefit of the Credit
Parties to be bound by the terms of this Section 11.14; or (v) to the extent
that the Borrower shall have consented in writing to such disclosure. Nothing
set forth in this Section 11.14 shall obligate the Agent or any Lender to
return any materials furnished by the Credit Parties.
11.15 Source of Funds. Each of the Lenders hereby represents and
warrants to the Borrower that at least one of the following statements is an
accurate representation as to the source of funds to be used by such Lender in
connection with the financing hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any
employee benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such
Lender, such Lender has disclosed to
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the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such
account as of the date of such purchase (and, for purposes of
this subsection (b), all employee benefit plans maintained by
the same employer or employee organization are deemed to be a
single plan); or
(c) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to
the Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 Conflict. To the extent that there is a conflict or
inconsistency between any provision hereof, on the one hand, and any provision
of any Credit Document, on the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
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92
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: PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
GUARANTORS: STAFFPLUS, INC.,
a Delaware corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
XXXXXX STAFFING SERVICES, INC.,
a California corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
PFI CORP.,
a Delaware corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Treasurer
NURSEFINDERS, INC.,
a Texas corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Treasurer
NF SERVICES, INC.,
a New York corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Treasurer
B.C.P., INC.,
a Hawaii corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Treasurer
[Guarantor Signature Continue]
S-1
93
Signature Pages to
Personnel Group of America, Inc.
Credit Agreement
PROFILE TEMPORARY SERVICES, INC.,
an Illinois corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Vice President
INFOTECH SERVICES, INC.,
a North Carolina corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Vice President
XXXXXXXXX SYSTEMS, INC.,
a Virginia corporation
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Vice President
S-2
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Signature Pages to
Personnel Group of America, Inc.
Credit Agreement
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By /s/ Xxxx X. Xxxxxxxx
-------------------------
Xxxx X. Xxxxxxxx
Title Vice President
------------------------
S-3
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SCHEDULE 1.1A
INVESTMENTS
1. Equity ownership of subsidiaries as reflected on Schedule 6.14.
2. Loans to Xxxxxx Xxxxxxx (approx. $210,000 aggregate principal
amount).
3. Notes receivable from Xxxxxxx Xxxxxxxx (principal amount $150,000,
written down on books to $50,000).
4. StaffPLUS, Inc. has been informed by Adia Services, Inc. that 1,531
shares of stock of Computone Corporation should have been transferred to
StaffPLUS, Inc. at the time of its formation. Adia Services, Inc. is taking
steps to have such shares transferred to StaffPLUS, Inc.
5. Notes receivable as shown on the attached list.
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Nursefinders, Inc.
Notes Receivable, Advances & Debt Summary
As of August 25, 1996
ORIGINAL CURRENT
TERMS NOTE BALANCE
----------------------------------------------------------------------------------------------------------------
NOTES RECEIVABLE
XXXXX XXXXXX - KANSAS CITY MONTHLY DED - DIST $638.49 20,000 5,531
XXX XXXXXXX - PRINCETON QUARTERLY INST - $4,881.36 BEG. 4/16/9 35,000 9,408
XXX XXXXXXX - XXXXXX QUARTERLY INST - $6,694.43 BEG. 8/08/9 48,000 19,119
XXXX XXXXXX - OMAHA INTEREST ONLY - $213.54 BEG. 07/03/96 40,000 40,000
MONTHLY INST - $1,253.45 BEG. 05/15/96
XXXXXX XXXXXXXXXXX - DES MOINES INTEREST ONLY - $260.00 BEG. 07/01/96 39,000 39,000
MONTHLY INST - $1,222.12 BEG. 01/01/97
XXXXXX XXXXXXXXXXX - DES MOINES INTEREST ONLY - $213.54 BEG. 07/03/96 25,000 25,000
MONTHLY INST - $809.62 BEG. 01/03/97
XXXX XXXX - PUGET SOUND MONTHLY INST - $1,794.61 BEG. 08/01/9 55,000 40,026
XXXX XXXX - PUGET SOUND INTEREST ONLY - $170.03 BEG. 08/29/96 20,000 20,000
MONTHLY INST - $647.69 BEG. 12/29/98
XXXXXXX XXXXXX BUILDING NOTE 194,147 191,417
------- -------
476,147 389,501
======= =======
97
SCHEDULE 1.1B
LIENS
In the agreement dated January 8, 1996 for the purchase of the stock of
B.C.P., Inc., Nursefinders, Inc. pledged the stock of B.C.P., Inc. to secure
the promissory note of Nursefinders, Inc. to The Xxxxxxx X. Xxxxxx Charitable
Remainder Unitrust (the "Trust") in the principal amount of $575,000. The
shares so pledged to the Trust have never been delivered into the possession of
the Trust. Such stock also is pledged to and is in the possession of the
Agent.
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SCHEDULE 1.1C
FORM OF PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of
September 30, 1996, is made by and among PERSONNEL GROUP OF AMERICA, INC., a
Delaware corporation (the "Borrower"), certain Subsidiaries of the Borrower
identified on the signature pages hereto (such Subsidiaries, individually a
"Guarantor" and collectively the "Guarantors;" the Guarantors together with the
Borrower, individually a "Pledgor" and collectively the "Pledgors"), and
NATIONSBANK, N.A., in its capacity as agent (the "Agent") for the lenders from
time to time party to the Credit Agreement described below (the "Lenders").
RECITALS
WHEREAS, the Pledgors, certain Lenders named therein (the "Lenders")
and the Agent, entered into that certain credit agreement, dated as of the date
hereof (the "Credit Agreement"); and
WHEREAS, pursuant to the terms of the Credit Agreement, the Pledgors
agreed to pledge certain assets as security for the performance by the Pledgors
of the Secured Obligations (as defined herein);
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein but not otherwise
defined shall have the meanings ascribed to such terms in the Credit Agreement.
2. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration or otherwise, of the Secured Obligations (as defined in Section 3
hereof), each Pledgor hereby pledges and assigns to the Agent, for the benefit
of the Lenders, and grants to the Agent, for the benefit of the Lenders, a
continuing security interest in, and a right to set off against, any and all
right, title and interest of such Pledgor in and to the following, whether now
owned or existing or owned, acquired, or arising hereafter (collectively, the
"Pledged Collateral"):
(a) Pledged Shares. (i) All of the issued and
outstanding shares of stock of the Subsidiaries of such Pledgor set
forth on Schedule 1 attached hereto, including without limitation, all
other shares of capital stock of whatever class now or hereafter owned
by such Pledgor, in each case together with the certificates
representing such shares, and all options and other rights,
contractual or otherwise,
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with respect thereto (collectively the "Pledged Shares"), including
the following:
(i) all shares or securities representing a
dividend on any of the Pledged Shares, or representing a
distribution or return of capital upon or in respect of the
Pledged Shares, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Shares; and
(ii) without affecting the obligations of such
Pledgor under any provision prohibiting such action hereunder,
in the event of any consolidation or merger in which a Pledgor
is not the surviving corporation, all shares of each class of
the capital stock of the successor corporation formed by or
resulting from such consolidation or merger.
(b) Additional Shares. All of the issued and outstanding
shares of stock of any Subsidiary of a Pledgor which is hereafter
formed or acquired by such Pledgor, including without limitation, the
certificates representing such shares.
(c) Proceeds. All proceeds and products of the
foregoing, however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock to the Agent as collateral
security for the Secured Obligations. Upon delivery to the Agent, such
additional shares of stock shall be deemed to be part of the Pledged Collateral
of such Pledgor and shall be subject to the terms of this Pledge Agreement
whether or not Schedule 1 is amended to refer to such additional shares.
3. Security for Secured Obligations. The security interest
created hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Secured Obligations"):
(a) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under
the Credit Agreement, the Notes, this Pledge Agreement and the other
Credit Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt performance and
observance by such Guarantor of all obligations of such Guarantor
under the Credit Agreement, this Pledge Agreement and the other Credit
Documents to which such Guarantor is a party, including, without
limitation, its
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guaranty obligations arising under Section 4 of the Credit Agreement;
and
(c) All other indebtedness, liabilities and obligations of
any kind or nature owing from any Pledgor to any Lender or the Agent
in connection with (i) this Pledge Agreement or any other Credit
Document, whether now existing or hereafter arising, due or to become
due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, together with any and all modifications,
extensions, renewals and/or substitutions of any of the foregoing,
(ii) collecting and enforcing the Secured Obligations and (iii)
liabilities arising under any interest rate protection agreement or
foreign exchange agreement between the Borrower and any Lender or any
Affiliate of a Lender.
4. Delivery of the Pledged Collateral. Each Pledgor hereby
agrees that:
(a) Certificates. Such Pledgor shall deliver to the
Agent (i) simultaneously with or prior to the execution and delivery
of this Pledge Agreement, all certificates representing the Pledged
Shares and (ii) promptly upon the receipt thereof by or on behalf of
such Pledgor, all other certificates and instruments constituting
Pledged Collateral of such Pledgor. Prior to delivery to the Agent,
all such certificates and instruments constituting Pledged Collateral
of such Pledgor shall be held in trust by such Pledgor for the benefit
of the Agent and the Lenders pursuant hereto. All such certificates
shall be delivered in suitable form for transfer by delivery or shall
be accompanied by duly executed undated instruments of transfer or
assignment in blank, in form provided in Schedule 2 attached hereto or
in such other form as acceptable to the Agent.
(b) Additional Securities. If such Pledgor shall receive
by virtue of its being or having been the owner of any Pledged
Collateral, any (i) stock certificate, including without limitation,
any certificate representing a stock dividend or distribution in
connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination
of shares, stock splits, spin-off or split-off, promissory notes or
other instrument; (ii) option or right, whether as an addition to, a
substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in securities; or (iv)
distributions of securities in connection with a partial or total
liquidation, dissolution or reduction of capital, capital surplus or
paid-in surplus, then such Pledgor shall receive such stock
certificate, instrument, option, right or distribution in trust for
the benefit of the Agent and the Lenders, shall segregate it from such
Pledgor's other property and shall deliver it forthwith to the Agent
in the exact form received together with any necessary endorsement
and/or appropriate undated stock power duly executed in blank in the
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form provided in Schedule 2 attached hereto, to be held by the Agent
as Pledged Collateral and as further collateral security for the
Secured Obligations.
(c) Financing Statements. Such Pledgor shall execute and
deliver to the Agent such UCC (as hereinafter defined) financing
statements as may be reasonably requested by the Agent in order to
perfect and protect the security interest created hereby in the
Pledged Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby
represents and warrants to the Agent, for the benefit of the Lenders, that so
long as any of the Secured Obligations remain outstanding or any Credit
Document is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares
of such Pledgor are duly authorized and validly issued, are fully paid
and nonassessable and are not subject to the preemptive rights of any
Person. All other shares of stock constituting Pledged Collateral
will be duly authorized and validly issued, fully paid and
nonassessable and not subject to the preemptive rights of any Person.
(b) Title. Such Pledgor has good and indefeasible title
to the Pledged Collateral of such Pledgor and will at all times be the
legal and beneficial owner of such Pledged Collateral free and clear
of any Lien, except for the security interest created by this Pledge
Agreement and other Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-302 of the Uniform Commercial Code as
in effect in the State of North Carolina (the "UCC") with respect to
the Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of
its rights and remedies hereunder will not violate any law or
governmental regulation or judgment or any material contractual
restriction binding on or affecting such Pledgor or any of its
Property.
(d) Pledgor's Authority. No authorization, approval or
action by, and no notice to or filing with, any Governmental Authority
or with the issuer of any Pledged Stock of such Pledgor is required
either (i) for the pledge made by such Pledgor or for the granting of
the security interest by such Pledgor pursuant to this Pledge
Agreement; or (ii) for the exercise by the Agent of its rights and
remedies hereunder (except as may be required by laws affecting the
offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement
creates a valid security interest in favor of the Agent, for the
benefit of the Lenders, in the Pledged Collateral of such Pledgor.
The taking possession by the Agent of the
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102
certificates representing the Pledged Shares of such Pledgor and all
other certificates and instruments constituting Pledged Collateral of
such Pledgor will perfect and establish the first priority of the
Agent's security interest, for the benefit of the Lenders, in the
Pledged Shares of such Pledgor and in all other Pledged Collateral of
such Pledgor represented by such Pledged Shares and instruments
securing the Secured Obligations. Except as set forth in this Section
5(e), no action is necessary to perfect or otherwise protect such
security interest.
(f) No Other Shares. No Pledgor owns any shares of stock
other than as set forth on Schedule 1 attached hereto.
6. Covenants. Each Pledgor hereby covenants that so long as any
of the Secured Obligations remain outstanding or any Credit Document is in
effect or any Letter of Credit shall remain outstanding, and until all of the
Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and
shall cause the issuer of the Pledged Shares of such Pledgor to xxxx
its books and records) to reflect the security interest granted to the
Agent, for the benefit of the Lenders, pursuant to this Pledge
Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral of such Pledgor free
from all Liens, except for Permitted Liens, and not sell, exchange,
transfer, assign, lease or otherwise dispose of Pledged Collateral of
such Pledgor or any interest therein, except as permitted under the
Credit Agreement.
(c) Further Assurances. Promptly execute and deliver at
its expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Agent may
reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor;
(ii) enable the Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral of such Pledgor; and
(iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Agent,
delivering to the Agent irrevocable proxies in respect of the Pledged
Shares of such Pledgor.
(d) Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged
Collateral of such Pledgor or enter into any agreement or allow to
exist any restriction with respect to any of the Pledged Collateral of
such Pledgor other than pursuant hereto or as may be permitted under
the Credit Agreement.
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(e) Compliance with Securities Laws. File all reports
and other information now or hereafter required to be filed by such
Pledgor with the United States Securities and Exchange Commission and
any other state, federal or foreign agency in connection with the
ownership of the Pledged Collateral of such Pledgor.
7. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, each Pledgor hereby designates and appoints
the Agent and each of its designees or agents as attorney-in-fact of
such Pledgor, irrevocably and with power of substitution, with
authority to take any or all of the following actions upon the
occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle,
compromise, adjust and give discharges and releases, all as
the Agent may determine;
(ii) to commence and prosecute any
actions at any court for the purposes of collecting any of the
Pledged Collateral of such Pledgor and enforcing any other
right in respect thereof;
(iii) to defend, settle or compromise any
action brought and, in connection therewith, give such
discharge or release as the Agent may deem appropriate;
(iv) to pay or discharge taxes, liens,
security interests, or other encumbrances levied or placed on
or threatened against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any
payment under any of the Pledged Collateral of such Pledgor to
make payment of any and all monies due and to become due
thereunder directly to the Agent or as the Agent shall direct;
(vi) to receive payment of and receipt
for any and all monies, claims, and other amounts due and to
become due at any time in respect of or arising out of any
Pledged Collateral of such Pledgor;
(vii) to sign and endorse any drafts,
assignments, proxies, stock powers, verifications, notices and
other documents relating to the Pledged Collateral of such
Pledgor;
(viii) to settle, compromise or adjust any
suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Agent
may deem reasonably appropriate;
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(ix) to exchange any of the Pledged
Collateral of such Pledgor or other property upon any merger,
consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and in connection
therewith, deposit any of the Pledged Collateral of such
Pledgor with any depository, transfer agent, registrar or
other designated agency upon such terms as the Agent may
determine; and
(x) to do and perform all such other
acts and things as the Agent may reasonably deem to be
necessary, proper or convenient in connection with the Pledged
Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall
be irrevocable. The Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and
options expressly or implicitly granted to the Agent in this Pledge
Agreement, and shall not be liable for any failure to do so or any
delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in
its individual capacity or its capacity as attorney-in-fact except
acts or omissions resulting from its negligence or willful misconduct.
This power of attorney is conferred on the Agent solely to protect,
preserve and realize upon its security interest, for the benefit of
the Lenders, in Pledged Collateral.
(b) Performance by the Agent of Pledgor's Obligations.
If any Pledgor fails to perform any agreement or obligation contained
herein, after the occurrence and during the continuance of an Event of
Default, the Agent itself may perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in
connection therewith shall be payable by the Pledgors on a joint and
several basis.
(c) Assignment by the Agent. To the extent permitted
under the Credit Agreement, the Agent may from time to time assign the
Pledged Collateral and any portion thereof, and the assignee shall be
entitled to all of the rights and remedies of the Agent under this
Pledge Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral
while being held by the Agent hereunder, the Agent shall have no duty
or liability to preserve rights pertaining thereto, it being
understood and agreed that each Pledgor shall be responsible for
preservation of all rights in the Pledged Collateral of such Pledgor,
and the Agent shall be relieved of all responsibility for Pledged
Collateral upon surrendering it or tendering the surrender of it to
such Pledgor. The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is
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accorded treatment substantially equal to that which the Agent accords
its own property, it being understood that the Agent shall not have
responsibility for (i) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not the Agent has or is
deemed to have knowledge of such matters; or (ii) taking any necessary
steps to preserve rights against any parties with respect to any
Pledged Collateral.
(e) Voting Rights in Respect of the Pledged Shares.
(i) So long as no Event of Default shall
have occurred and be continuing, to the extent permitted by
law, each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Shares of such
Pledgor or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit
Agreement;
(ii) Upon the occurrence and during the
continuance of an Event of Default, upon written notice from
the Agent, all rights of a Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled
to exercise pursuant to paragraph (i) of this Section shall
cease and all such rights shall thereupon become vested in the
Agent which shall thereupon have the sole right to exercise
such voting and other consensual rights.
(f) Dividend Rights in Respect of the Pledged Shares.
(i) So long as no Event of Default shall
have occurred and be continuing and subject to Section 4(b)
hereof, each Pledgor may receive and retain any and all
dividends (other than stock dividends and other dividends
constituting Pledged Collateral of such Pledgor which are
addressed hereinabove) or interest paid in respect of the
Pledged Collateral of such Pledgor to the extent they are
allowed under the Credit Agreement.
(ii) Upon the occurrence and during the
continuance of an Event of Default:
(A) all rights of a Pledgor to receive
the dividends and interest payments which it would
otherwise be authorized to receive and retain
pursuant to paragraph (i) of this Section shall cease
and all such rights shall thereupon be vested in the
Agent which shall thereupon have the sole right to
receive and hold as Pledged Collateral such dividends
and interest payments; and
(B) all dividends and interest payments
which are received by such Pledgor contrary to
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the provisions of paragraph (A) of this Section shall
be received in trust for the benefit of the Agent and
the Lenders, shall be segregated from other property
or funds of such Pledgor, and shall be forthwith paid
over to the Agent as Pledged Collateral in the exact
form received, to be held by the Agent as Pledged
Collateral and as further collateral security for the
Secured Obligations.
(g) Release of Pledged Collateral. The Agent may release
any of the Pledged Collateral from this Pledge Agreement or may
substitute any of the Pledged Collateral for other Pledged Collateral
without altering, varying or diminishing in any way the force, effect,
lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and this
Pledge Agreement shall continue as a first priority lien, security
interest, pledge and charge on all Pledged Collateral not expressly
released or substituted when any of the Secured Obligations remain
outstanding.
8. Advances by Agent. On failure of any Pledgor to perform any
of the covenants and agreements contained herein, the Agent may, at its sole
option and in its sole discretion, perform the same and in so doing may expend
such sums as the Agent may reasonably deem advisable in the performance
thereof, including, without limitation, the payment of any insurance premiums,
the payment of any taxes, a payment to obtain a release of a Lien or potential
Lien, expenditures made in defending against any adverse claim and all other
expenditures which the Agent or the Lenders may make for the protection of the
security hereof or which may be compelled to make by operation of law. All
such sums and amounts so expended shall be repayable by the Pledgors
immediately without notice or demand, shall constitute additional Secured
Obligations and shall bear interest from the date said amounts are expended at
the default rate provided in Section 3.1 of the Credit Agreement. No such
performance of any covenant or agreement by the Agent or the Lenders on behalf
of any Pledgor, and no such advance or expenditure therefor, shall relieve the
Pledgors of any default under the terms of this Pledge Agreement or the other
Credit Documents. The Agent or Lenders may make any payment hereby authorized
in accordance with any xxxx, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such xxxx, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim.
9. Events of Default. The occurrence of an Event of
Default under and as defined in the Credit Agreement shall be an Event of
Default hereunder ("Event of Default").
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10. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) Rights and Remedies. The Agent may exercise in
respect of the Pledged Collateral of any Pledgor, in addition to other
rights and remedies provided for herein or otherwise available to it,
all rights and remedies of a secured party on default under the UCC or
any other applicable law.
(b) Sale of Pledged Collateral. Without limiting the
generality of this Section and without notice (except as provided
below), the Agent may, in its sole discretion, sell or otherwise
dispose of or realize upon the Pledged Collateral, or any part
thereof, in one or more parcels, at public or private sale, at any
exchange or broker's board or elsewhere, at such price or prices and
on such other terms as the Agent may deem commercially reasonable, for
cash, credit or for future delivery without assumption of credit risk
or otherwise in accordance with applicable law. To the extent
permitted by law, any Lender may in such event, bid for the purchase
of such securities. Each Pledgor agrees that any requirement of
reasonable notice shall be met if notice, specifying the place of any
public sale or the time after which any private sale is to be made,
shall be personally served on or mailed, postage prepaid, to any
Pledgor in accordance with the notice provisions of Section 11.1 of
the Credit Agreement at least 10 days before time of such sale. The
Agent shall not be obligated to make any sale of Pledged Collateral of
such Pledgor regardless of notice of sale having been given. The
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(c) Private Sale. The Pledgors recognize that the Agent
may deem it impracticable to effect a public sale of all or any part
of the Pledged Collateral or any of the securities constituting
Pledged Collateral and that the Agent may, therefore, determine to
make one or more private sales of any such securities to a restricted
group of purchasers who will be obligated to agree, among other
things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof.
Each Pledgor acknowledges that any such private sale may be at prices
and on terms less favorable to the seller than the prices and other
terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and that
the Agent shall have no obligation to delay sale of any such
securities for the period of time necessary to permit the issuer of
such securities to register such securities for public sale under the
Securities Act of 1933. Each Pledgor further acknowledges and agrees
that any offer to sell such securities which has been (i) publicly
advertised on a bona fide basis in a newspaper or other
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publication of general circulation in the financial community of New
York, New York (to the extent that such offer may be advertised
without prior registration under the Securities Act of 1933), or (ii)
made privately in the manner described above shall be deemed to
involve a "public sale" under the UCC, notwithstanding that such sale
may not constitute a "public offering" under the Securities Act of
1933, and the Agent or any Lender may, in such event, bid for the
purchase of such securities.
(d) Retention of Pledged Collateral. The Agent may,
after providing the notices required by Section 9-505(2) of the UCC or
otherwise complying with the requirements of applicable law of the
relevant jurisdiction, retain all or any portion of the Pledged
Collateral in satisfaction of the Pledgor Obligations. Unless and
until the Agent shall have provided such notices, however, the Agent
shall not be deemed to have retained any Pledged Collateral in
satisfaction of any Pledgor Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to
which the Agent or the Lenders are legally entitled, the Pledgors
shall be jointly and severally liable for the deficiency, together
with interest thereon at the default rate provided in Section 3.1 of
the Credit Agreement, together with the costs of collection and the
reasonable fees of any attorneys employed by the Agent to collect such
deficiency. Any surplus remaining after the full payment and
satisfaction of the Secured Obligations shall be returned to the
appropriate Pledgors or to whomsoever a court of competent
jurisdiction shall determine to be entitled thereto.
(f) Application of Proceeds. Upon the occurrence and
during the continuance of an Event of Default, any payments in respect
of the Secured Obligations and any proceeds of the Pledged Collateral,
when received by the Agent or any of the Lenders in cash or its
equivalent, will be applied in reduction of the Secured Obligations in
the order set forth in Section 3.14(b) of the Credit Agreement, and
each Pledgor irrevocably waives the right to direct the application of
such payments and proceeds and acknowledges and agrees that the Agent
shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds notwithstanding any entry to the
contrary upon any of its books and records.
11. Costs of Counsel. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Pledge
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Pledge Agreement or relating to the
Pledged Collateral, or to protect the Pledged Collateral of any Pledgor or
exercise any rights or remedies under this Pledge Agreement or with
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109
respect to any Pledged Collateral, then the Pledgors jointly and severally
agree to promptly pay upon demand any and all such reasonable costs and
expenses of the Agent and the Lenders, all of which costs and expenses shall
constitute Secured Obligations hereunder.
12. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as the Credit
Agreement is in effect or any amounts payable thereunder or under any other
Credit Document or any Letter of Credit shall remain outstanding, and until all
of the Commitments thereunder shall have terminated. Upon such termination of
this Pledge Agreement, the Lenders shall, upon the request and at the expense
of the Pledgors, forthwith release all of their liens and security interests
hereunder. Notwithstanding the foregoing all releases and indemnities provided
hereunder shall survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, all as
though such payment had not been made; provided that in the event payment of
all or any part of the Secured Obligations is rescinded or must be restored or
returned, all reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any Lender in
defending and enforcing such reinstatement shall be deemed to be included as a
part of the Secured Obligations.
13. Amendments; Waivers; Modifications. This Pledge Agreement and
the provisions hereof may be changed, discharged or terminated only by an
instrument in writing signed by each of the Pledgors and the Agent with the
requisite consent of the Lenders as provided in the Credit Agreement.
14. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Pledged Collateral of each of the Pledgors
and shall be binding upon each of the Pledgors, its successors and assigns and
shall inure, together with the rights and remedies of the Agent hereunder, to
the benefit of the Agent and the Lenders and their successors and assigns;
provided, however, that none of the Pledgor may assign its rights or delegate
its duties hereunder without the prior written consent of the Agent and all of
the Lenders. Without limiting the generality of the foregoing, and subject to
the provisions of Section 11.3 of the Credit Agreement, any Lender may assign
or otherwise transfer any indebtedness held by it secured by this Pledge
Agreement to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to
such Lender herein or
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110
otherwise, subject, however, to the provisions of the Credit Agreement. Each
Pledgor hereby releases the Agent and the Lenders from any liability for any
act or omission relating to the Pledged Collateral or this Pledge Agreement,
except for any such liability resulting from gross negligence or willful
misconduct.
15. Notices. All notices required or permitted to be given under
this Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
16. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
17. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning
or construction of any provision of this Pledge Agreement.
18. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA. Any legal action or proceeding with respect to this Pledge
Agreement may be brought in the courts of the State of North Carolina
in Mecklenburg County, or of the United States for the Western
District of North Carolina, and, by execution and delivery of this
Pledge Agreement, each of the Pledgors hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally,
the nonexclusive jurisdiction of such courts. Each of the Pledgors
further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section
11.1 of the Credit Agreement, such service to become effective 30 days
after such mailing. Nothing herein shall affect the right of the
Agent to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Pledgor
in any other jurisdiction.
(b) Each of the Pledgors hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Pledge Agreement brought in the courts referred
to in subsection (a) hereof and hereby further irrevocably waives and
agrees not to plead or claim in any such court
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111
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, THE AGENT AND EACH OF
THE PLEDGORS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
19. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
20. Entirety. This Pledge Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
21. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement and
the other Credit Documents, the delivery of the Notes and the making of the
Loans and the issuance of Letters of Credit under the Credit Agreement.
22. Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by Property other than the Pledged
Collateral (including, without limitation, real property and securities owned
by a Pledgor), or by a guarantee, endorsement or Property of any other Person,
then the Agent and the Lenders shall have the right to proceed against such
other property, guarantee or endorsement upon the occurrence of any Event of
Default, and the Agent and the Lenders have the right, in their sole
discretion, to determine which rights, security, liens, security interests or
remedies the Agent and the Lenders shall at any time pursue, relinquish,
subordinate, modify or take with respect thereto, without in any way modifying
or affecting any of them or any of the Agent's and the Lenders' rights or the
Secured Obligations under this Pledge Agreement or under any other of the
Credit Documents.
23. Joint and Several Obligations of Pledgors. All payment
obligations of the Pledgors hereunder shall be joint and several.
24. Rights of Required Lenders. All rights of the Agent hereunder,
if not exercised by the Agent, may be exercised by the Required Lenders,
subject in all respects to Section 11.6 of the Credit Agreement.
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Each of the Pledgors has caused a counterpart of this Pledge Agreement
to be duly executed and delivered as of the date first above written.
BORROWER: PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By____________________________
Title_________________________
GUARANTORS: STAFFPLUS, INC.,
a Delaware corporation
By____________________________
Title_________________________
XXXXXX STAFFING SERVICES, INC.,
a California corporation
By____________________________
Title_________________________
PFI CORP.,
a Delaware corporation
By____________________________
Title_________________________
NURSEFINDERS, INC.,
a Texas corporation
By____________________________
Title_________________________
NF SERVICES, INC.,
a New York corporation
By____________________________
Title_________________________
B.C.P., INC.,
a Hawaii corporation
By____________________________
Title_________________________
[Signatures Continue]
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PROFILE TEMPORARY SERVICES, INC.,
an Illinois corporation
By____________________________
Title_________________________
INFOTECH SERVICES, INC.,
a North Carolina corporation
By____________________________
Title_________________________
XXXXXXXXX SYSTEMS, INC.,
a Virginia corporation
By____________________________
Title_________________________
Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A., as Agent
By ___________________________
Title_________________________
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Schedule 1
Pledged Shares
NAME OF PLEDGOR: PERSONNEL GROUP OF AMERICA, INC.
Certificate
Name of Subsidiary Number of Shares Number
------------------ ---------------- -----------
NAME OF PLEDGOR: _______________________________
Certificate
Name of Subsidiary Number of Shares Number
------------------ ---------------- -----------
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Schedule 2
Form of
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of _____________________, a ____________
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent
and attorney-in-fact may substitute and appoint one or more persons to act for
him. The effectiveness of a transfer pursuant to this stock power shall be
subject to any and all transfer restrictions referenced on the face of the
certificates evidencing such interest or in the certificate of incorporation or
bylaws of the subject corporation, to the extent they may from time to time
exist.
[PLEDGOR]
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SCHEDULE 2.1(a)
LENDERS
LENDER: COMMITMENT:
------- -----------
NationsBank, N.A. $100,000,000.00
Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx
NC1-001-15-04
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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SCHEDULE 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N.A.,
as Agent for the Lenders
000 X. Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, PERSONNEL GROUP OF AMERICA, INC. (the "Borrower"),
refers to the Credit Agreement dated as of September 30, 1996 (as amended,
modified, extended or restated from time to time, the "Credit Agreement"),
among the Borrower, the Lenders and NationsBank, N.A., as Agent. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The Borrower hereby gives
notice that it requests a Loan advance in accordance with the provisions of
Section 2.1 of the Credit Agreement and in connection therewith sets forth
below the terms on which such Loan advance is requested to be made:
(A) Date of Borrowing
(which is a Business Day) _______________________
(B) Principal Amount of
Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the
last day thereof _______________________
(E) Consolidated Leverage Ratio* _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (a)(ii) of such Section, and confirms that the
matters referenced in subsections (iii), (iv) and (v) of such Section, are true
and correct.
Very truly yours,
PERSONNEL GROUP OF AMERICA, INC.
By:____________________________
Title:_________________________
__________________________________
* After giving effect to the requested Loan advance.
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SCHEDULE 2.1(e)
FORM OF NOTE
$_________________ September 30, 1996
FOR VALUE RECEIVED, PERSONNEL GROUP OF AMERICA, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N.A., as Agent (the "Agent"), at 000 X. Xxxxx Xxxxxx,
Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at
such other place or places as the holder hereof may designate), at the times
set forth in the Credit Agreement dated as of the date hereof among the
Borrower, the Lenders and the Agent (as it may be amended, modified, extended
or restated from time to time, the "Credit Agreement"; all capitalized terms
not otherwise defined herein shall have the meanings set forth in the Credit
Agreement), but in no event later than the Termination Date, in Dollars and in
immediately available funds, the principal amount of
________________________DOLLARS ($____________) or, if less than such principal
amount, the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to the Credit Agreement, and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates selected in accordance with Section
2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
the balance outstanding hereunder shall bear interest as provided in Section
3.1 of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
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This Note and the Loans evidenced hereby may be transferred in whole
or in part only by registration of such transfer on the Register maintained by
or on behalf of the Borrower as provided in Section 11.3(c) of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
PERSONNEL GROUP OF AMERICA, INC.
By____________________________
Title_________________________
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SCHEDULE A TO THE NOTE
OF PERSONNEL GROUP OF AMERICA, INC.
DATED SEPTEMBER 30, 1996
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
---- ---- -------- --------- -------- --------- --------
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SCHEDULE 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N.A.,
as Agent for the Lenders
000 X. Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, PERSONNEL GROUP OF AMERICA, INC. (the "Borrower"),
refers to the Credit Agreement dated as of September 30, 1996 (as amended,
modified, extended or restated from time to time, the "Credit Agreement"),
among the Borrower, the Lenders and NationsBank, N.A., as Agent. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The Borrower hereby gives
notice pursuant to Section 3.2 of the Credit Agreement that it requests an
extension or conversion of a Loan outstanding under the Credit Agreement, and
in connection therewith sets forth below the terms on which such extension or
conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(B) Principal Amount of
Extension or Conversion _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the
last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (a)(ii) of such Section, and confirms that the
matters referenced in subsections (iii), (iv) and (v) of such Section, are true
and correct.
Very truly yours,
PERSONNEL GROUP OF AMERICA, INC.
By:____________________________
Title:_________________________
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SCHEDULE 5.1(j)
FORM OF LEGAL OPINION
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SCHEDULE 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
Xxxx-Xxxxx-Xxxxxx filing for Acquisition -- received "early termination"
of waiting period without objection.
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SCHEDULE 6.14
SUBSIDIARIES
Number of
State of Outstanding
Subsidiary Incorporation Record Holder Shares
------------------------------------------------------------------------------
Profile Temporary Illinois Personnel Group 1,000
Services, Inc. of America, Inc.
StaffPLUS, Inc. Delaware Personnel Group 1,000
of America, Inc.
Xxxxxx Staffing California Personnel Group 32,604
Services, Inc. of America, Inc.
PFI Corp. Delaware Personnel Group 1,000
of America, Inc.
Nursefinders, Inc. Texas PFI Corp. 1,000
NF Services, Inc. New York Nursefinders, Inc. 1,000
B.C.P., Inc. Hawaii Nursefinders, Inc. 1,000
Infotech Services, North Personnel Group of 100
Inc. Carolina America, Inc.
Xxxxxxxxx Systems, Inc. Virginia Infotech Services, Inc. 167
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SCHEDULE 7.1(c)(i)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of Personnel Group of America, Inc.
(the "Borrower") hereby certify that, to the best of my knowledge and belief,
with respect to that certain Credit Agreement dated as of September 30, 1996
(as amended, modified, extended or restated from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the other Credit Parties party
thereto, the Lenders party thereto and NationsBank, N.A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and
have been prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from normal
year-end audit adjustments.
b. Since ___________ (the date of the last similar certification,
or, if none, the Closing Date) no Default or Event of Default has
occurred under the Credit Agreement.
Delivered herewith are detailed calculations demonstrating compliance by the
Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
PERSONNEL GROUP OF AMERICA, INC.
Name:___________________________
Title:__________________________
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Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS
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SCHEDULE 7.1(c)(ii)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
I, ______________________, [Title] of Personnel Group of America, Inc.
(the "Borrower") hereby certify that, to the best of my knowledge and belief,
with respect to that certain Credit Agreement dated as of September 30, 1996
(as amended, modified, extended or restated from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the other Credit Parties party
thereto, the Lenders party thereto and NationsBank, N.A., as Agent:
a. After giving effect on a Pro Forma Basis to ____________
[describe the Pro Forma Transaction], no Default or Event of
Default would exist under the Credit Agreement.
Delivered herewith are detailed calculations on a Pro Forma Basis demonstrating
compliance by the Credit Parties with the financial covenants contained in
Section 7.11 of the Credit Agreement.
This ______ day of ___________, 19__.
PERSONNEL GROUP OF AMERICA, INC.
Name:___________________________
Title:__________________________
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Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS ON A PRO FORMA BASIS
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SCHEDULE 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,
19__, is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N.A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of September 30, 1996, by
and among Personnel Group of America, Inc., a Delaware corporation (the
"Borrower"), the other Credit Parties party thereto, the Lenders party thereto
and NationsBank, N.A., as Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 7.12 of the Credit Agreement to cause
the Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Subsidiary will be deemed to be a party to
the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement, and shall have all of the obligations of a Guarantor thereunder as
if it had executed the Credit Agreement. The Subsidiary hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Guarantors contained in 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 Borrower's Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
2. The address of the Subsidiary for purposes of all notices and
other communications is ____________________, ____________________________,
Attention of ______________ (Facsimile No. ____________).
3. The Subsidiary hereby waives acceptance by the Agent and the
Lenders of the guaranty by the Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Subsidiary.
4. 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.
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130
5. This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to
be duly executed by its authorized officers, and the Agent, for the benefit of
the Lenders, has caused the same to be accepted by its authorized officer, as
of the day and year first above written.
[SUBSIDIARY]
By____________________________
Title_________________________
Acknowledged and accepted:
NATIONSBANK, N.A., as Agent
By______________________________
Title___________________________
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SCHEDULE 8.1
INDEBTEDNESS
Acquisition Notes
Nursefinders, Hawaii ($575,000)
Nursefinders, New Mexico ($1,030,000)
Nursefinders, Baltimore/Colorado Springs ($2,060,000)
Xxxxxxxxx Systems ($2,700,000)
BEST ($10,950,000)
SSC ($3,000,000, plus $500,000 deferred payment obligation)
Acquisition Contingent Obligations (Earnouts)
Arising from acquisitions of stock or assets of:
Profile Temporary Services, Inc.
Computer Resources Group, Inc.
Business Enterprise Systems and Technology, Inc.
Software Services Corporation
Other
Pyramid Management Settlement ($50,000)
Prodata purchase obligations -- acquired from BEST ($215,457)
Xxx Xxxxxx stock redemption and non-compete (BEST) ($2,206,296)
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SCHEDULE 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of _______________, 199_ is
entered into between ________________ ("Assignor") and ____________________
("Assignee").
Reference is made to the Credit Agreement dated as of September 30,
1996, as amended and modified from time to time thereafter (the "Credit
Agreement") among Personnel Group of America, Inc., the other Credit Parties
party thereto, the Lenders party thereto and NationsBank, N.A., as Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
effective as of the Effective Date set forth below, the interests set forth
below (the "Assigned Interest") in the Assignor's rights and obligations under
the Credit Agreement, including, without limitation, the interests set forth
below in the Commitments and outstanding Loans of the Assignor on the effective
date of the assignment designated below (the "Effective Date"), together with
unpaid Fees accrued on the assigned Commitments to the Effective Date and
unpaid interest accrued on the assigned Loans to the Effective Date. Each of
the Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 11.3(b) of the
Credit Agreement, a copy of which has been received by the Assignee. From and
after the Effective Date (i) the Assignee, if it is not already a Lender under
the Credit Agreement, shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests purchased and assumed by
the Assignee under this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
of the interests sold and assigned by the Assignor under this Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of North Carolina.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Commitment Percentage Assigned
(expressed as a percentage set
forth to at least 8 decimals) %
(f) Commitment Percentage of
Assignee after giving effect
to this Assignment and Acceptance
as of the Effective Date
(set forth to at least 8 decimals) %
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(g) Commitment Percentage of
Assignor after giving effect
to this Assignment and Acceptance
as of the Effective Date
(set forth to at least 8 decimals) %
(h) Committed Amount as of
Effective Date $_____________
(i) Dollar Amount of Assignor's
Commitment Percentage as of
the Effective Date (the amount
set forth in (h) multiplied by
the percentage set forth in (g)) $_____________
(j) Dollar Amount of Assignee's
Commitment Percentage as of
the Effective Date (the amount
set forth in (h) multiplied by
the percentage set forth in (f)) $_____________
4. This Assignment and Acceptance shall be effective only upon consent
of the Borrower and the Agent, if applicable, delivery to the Agent of this
Assignment and Acceptance together with the transfer fee payable pursuant to
Section 11.3(b) in connection herewith and recordation in the Register pursuant
to Section 11.3(c) of the terms hereof.
5. This Assignment and Acceptance may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Assignment and Acceptance to
produce or account for more than one such counterpart.
The terms set forth above
are hereby agreed to:
____________________, as Assignor
By:_____________________________________
Title:__________________________________
_____________________, as Assignee
By:_____________________________________
Title:__________________________________
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CONSENTED TO:
NATIONSBANK, N.A.,
as Agent
By:____________________________________
Title:_________________________________
PERSONNEL GROUP OF AMERICA, INC.
By:____________________________________
Title:_________________________________
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