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EXHIBIT 10.35
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$70,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
SLEEPMASTER L.L.C.,
as Borrower,
SLEEPMASTER HOLDINGS, L.L.C.,
the Parent
and
THE DOMESTIC SUBSIDIARIES
OF THE BORROWER
FROM TIME TO TIME PARTIES HERETO
as Guarantors,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
Dated as of November 5, 1999
FIRST UNION SECURITIES, INC.,
as Sole Arranger
and
XXXXXX FINANCIAL, INC.,
as Syndication Agent
IBJ WHITEHALL BANK & TRUST COMPANY,
as Documentation Agent
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS......................................................................................................1
Section 1.1 Defined Terms................................................................................1
Section 1.2 Other Definitional Provisions...............................................................25
Section 1.3 Accounting Terms............................................................................26
ARTICLE II THE LOANS; AMOUNT AND TERMS....................................................................................27
Section 2.1 Revolving Loans.............................................................................27
Section 2.2 Term Loan...................................................................................29
Section 2.3 Letter of Credit Subfacility................................................................30
Section 2.4 Fees........................................................................................34
Section 2.5 Commitment Reductions.......................................................................35
Section 2.6 Prepayments.................................................................................36
Section 2.7 Minimum Principal Amount of Tranches........................................................38
Section 2.8 Default Rate and Payment Dates..............................................................38
Section 2.9 Conversion Options..........................................................................38
Section 2.10 Computation of Interest and Fees............................................................39
Section 2.11 Pro Rata Treatment and Payments.............................................................39
Section 2.12 Non-Receipt of Funds by the Administrative Agent............................................41
Section 2.13 Inability to Determine Interest Rate........................................................42
Section 2.14 Illegality..................................................................................42
Section 2.15 Requirements of Law.........................................................................43
Section 2.16 Indemnity...................................................................................44
Section 2.17 Taxes.......................................................................................45
Section 2.18 Indemnification; Nature of Issuing Lender's Duties..........................................47
Section 2.19 Replacement of Lenders......................................................................48
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................................................49
Section 3.1 Financial Condition.........................................................................49
Section 3.2 No Change...................................................................................49
Section 3.3 Corporate Existence; Compliance with Law....................................................49
Section 3.4 Corporate Power; Authorization; Enforceable Obligations; No Consents........................49
Section 3.5 No Legal Bar; No Default....................................................................50
Section 3.6 No Material Litigation......................................................................50
Section 3.7 Investment Company Act......................................................................50
Section 3.8 Margin Regulations..........................................................................51
Section 3.9 ERISA.......................................................................................51
Section 3.10 Environmental Matters.......................................................................51
Section 3.11 Use of Proceeds.............................................................................52
Section 3.12 Subsidiaries................................................................................52
Section 3.13 Ownership...................................................................................53
Section 3.14 Indebtedness................................................................................53
Section 3.15 Taxes.......................................................................................53
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Section 3.16 Intellectual Property.......................................................................53
Section 3.17 Solvency....................................................................................54
Section 3.18 Investments.................................................................................54
Section 3.19 Security Documents..........................................................................54
Section 3.20 Location of Collateral......................................................................54
Section 3.21 No Burdensome Restrictions..................................................................54
Section 3.22 Brokers' Fees...............................................................................54
Section 3.23 Labor Matters...............................................................................55
Section 3.24 Accuracy and Completeness of Information....................................................55
Section 3.25 Year 2000 Issue.............................................................................55
Section 3.26 Insurance...................................................................................55
ARTICLE IV CONDITIONS PRECEDENT...........................................................................................56
Section 4.1 Conditions to Closing Date and Initial Loans................................................56
Section 4.2 Conditions to All Extensions of Credit......................................................61
ARTICLE V AFFIRMATIVE COVENANTS...........................................................................................62
Section 5.1 Financial Statements........................................................................62
Section 5.2 Certificates; Other Information.............................................................63
Section 5.3 Payment of Obligations......................................................................65
Section 5.4 Conduct of Business and Maintenance of Existence............................................65
Section 5.5 Maintenance of Property; Insurance..........................................................65
Section 5.6 Inspection of Property; Books and Records; Discussions......................................66
Section 5.7 Notices.....................................................................................67
Section 5.8 Environmental Laws..........................................................................67
Section 5.9 Financial Covenants.........................................................................68
Section 5.11 Compliance with Law.........................................................................70
Section 5.12 Pledged Assets..............................................................................70
Section 5.13 Year 2000 Compliance........................................................................70
Section 5.14 Further Assurances..........................................................................71
ARTICLE VI NEGATIVE COVENANTS.............................................................................................71
Section 6.1 Indebtedness................................................................................71
Section 6.2 Liens.......................................................................................72
Section 6.3 Guaranty Obligations........................................................................73
Section 6.4 Nature of Business..........................................................................73
Section 6.5 Consolidation, Merger, Sale of Assets, Permitted Acquisitions, etc..........................73
Section 6.6 Advances, Investments and Loans.............................................................74
Section 6.7 Transactions with Affiliates................................................................74
Section 6.8 Ownership of Subsidiaries; Restrictions.....................................................74
Section 6.9 Fiscal Year; Organizational Documents; Material Contracts...................................74
Section 6.10 Limitation on Restricted Actions............................................................75
Section 6.11 Restricted Payments.........................................................................75
Section 6.12 Prepayments of Indebtedness, etc............................................................76
Section 6.13 Sale Leasebacks.............................................................................76
Section 6.14 No Further Negative Pledges.................................................................76
Section 6.15 Consolidated Capital Expenditures...........................................................76
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Section 6.16 Subordinated Debt...........................................................................77
Section 6.17 Operating Leases............................................................................77
Section 6.18 Parent Holding Company and Sleepmaster Finance Corporation..................................77
Section 6.19 Serta Licenses..............................................................................77
ARTICLE VII EVENTS OF DEFAULT.............................................................................................78
Section 7.1 Events of Default...........................................................................78
Section 7.2 Acceleration; Remedies......................................................................80
ARTICLE VIII THE AGENT....................................................................................................81
Section 8.1 Appointment.................................................................................81
Section 8.2 Delegation of Duties........................................................................81
Section 8.3 Exculpatory Provisions......................................................................81
Section 8.4 Reliance by Administrative Agent............................................................82
Section 8.5 Notice of Default...........................................................................82
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders......................................83
Section 8.7 Indemnification.............................................................................83
Section 8.8 Administrative Agent in Its Individual Capacity.............................................84
Section 8.9 Successor Administrative Agent..............................................................84
Section 8.10 Release of Collateral.......................................................................84
Section 8.11 Syndication and Documentation Agents........................................................84
ARTICLE IX MISCELLANEOUS..................................................................................................85
Section 9.1 Amendments and Waivers......................................................................85
Section 9.2 Notices.....................................................................................86
Section 9.3 No Waiver; Cumulative Remedies..............................................................87
Section 9.4 Survival of Representations and Warranties..................................................87
Section 9.5 Payment of Expenses and Taxes...............................................................87
Section 9.6 Successors and Assigns; Participations; Purchasing Lenders..................................88
Section 9.7 Adjustments; Set-off........................................................................90
Section 9.8 Table of Contents and Section Headings......................................................91
Section 9.9 Counterparts................................................................................92
Section 9.10 Effectiveness...............................................................................92
Section 9.11 Severability................................................................................92
Section 9.12 Integration.................................................................................92
Section 9.13 Governing Law...............................................................................92
Section 9.14 Consent to Jurisdiction and Service of Process..............................................92
Section 9.15 Arbitration.................................................................................93
Section 9.16 Confidentiality.............................................................................94
Section 9.17 Acknowledgments.............................................................................95
Section 9.18 Waivers of Jury Trial.......................................................................95
Section 9.19 Binding Effect; Termination of this Credit Agreement; Termination of
Existing Credit Agreement...................................................................95
ARTICLE X GUARANTY........................................................................................................96
Section 10.1 The Guaranty................................................................................96
Section 10.2 Bankruptcy..................................................................................96
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Section 10.3 Nature of Liability.........................................................................97
Section 10.4 Independent Obligation......................................................................97
Section 10.5 Authorization...............................................................................97
Section 10.6 Reliance....................................................................................98
Section 10.7 Waiver......................................................................................98
Section 10.8 Limitation on Enforcement...................................................................99
Section 10.9 Confirmation of Payment.....................................................................99
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Schedules
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Schedule 1.1(a) Form of Account Designation Letter
Schedule 1.1(b) Liens
Schedule 1.1(c) Permitted Adjustments
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Term Note
Schedule 2.9 Form of Notice of Conversion/Extension
Schedule 2.17 Form of Section 2.17 Certificate
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.10 Environmental Matters
Schedule 3.12 Subsidiaries
Schedule 3.16 Material Intellectual Property
Schedule 3.20(a) Location of Real Property
Schedule 3.20(b) Location of Collateral
Schedule 3.20(c) Chief Executive Offices
Schedule 3.23 Labor Matters
Schedule 3.26 Insurance
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.1(i) Form of Solvency Certificate
Schedule 4.1(w) Form of Financial Covenant Compliance Certificate
Schedule 5.10 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 6.7 Agreements with Affiliates
Schedule 9.2 Notices/Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 5, 1999,
among SLEEPMASTER L.L.C., a New Jersey limited liability company (the
"Borrower"), SLEEPMASTER HOLDINGS L.L.C., a New Jersey limited liability company
(the "Parent") and those Domestic Subsidiaries of the Borrower identified as a
"Guarantor" on the signature pages hereto and such other Domestic Subsidiaries
of the Borrower as may from time to time become a party hereto (together with
the Parent, collectively, the "Guarantors"), the several banks and other
financial institutions as may from time to time become parties to this Agreement
(collectively, the "Lenders"; and individually, a "Lender"), and FIRST UNION
NATIONAL BANK, a national banking association, as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative
Agent are party to that Credit Agreement, dated as of May 18, 1999 (the
"Existing Credit Agreement") pursuant to which the Lender has agreed to make
loans and other financial accommodations to the Borrower in the amount of up to
$25,000,000 in the terms and conditions contained therein.
WHEREAS, the Borrower has requested that the Lenders increase the amount
of loans and other financial accommodations available to the Borrower to an
amount of up to $70,000,000, as more particularly described herein;
WHEREAS, the Lenders have agreed to amend and restate the Existing Credit
Agreement and make such increased loans and other financial accommodations to
the Borrower on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"Account Designation Letter" shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrower to the Administrative Agent
substantially in the form attached hereto as Schedule 1.1(a).
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"Acquisition" shall mean the purchase of the assets of Xxxx Xxxxx, Inc.
pursuant to that Asset Purchase Agreement dated as of November 5, 1999 by and
among the Borrower, Xxxx Xxxxx, Inc. and Xxxx Xxxxx Realty, Inc. as parties
thereto.
"Acquisition Documents" shall mean the Asset Purchase Agreement dated as
of November 5, 1999 between the Borrower and Xxxx Xxxxx, Inc., the Employment
and Unit Purchase Agreements dated as of November 5, 1999 by and among AWI
Corporation, the Parent, the Borrower, Sleep Investor L.L.C. and each of Xxxxx
Xxxx and Xxxxxxx X. Xxxx, the Employment Agreement dated as of November 5, 1999
by and among the Borrower, AWI Corporation and Xxxxx X. Xxxxxxx, the Indemnity
Escrow Agreement and the Adjustment Escrow Agreement each dated as of November
5, 1999 by and among Xxxx Xxxxx, Inc., Xxxx Xxxxx Realty, Inc., Bank One Trust
Company, N.A. and AWI Corporation, and the Xxxx of Sale and the Assignment and
Assumption Agreement each dated as of November 5, 1999, among AWI Corporation,
Xxxx Xxxxx, Inc., and Xxxx Xxxxx Realty, Inc. as each of the foregoing may be
amended or modified together with all schedules and exhibits related thereto.
"Xxxx Xxxxx" means Xxxx Xxxxx, Inc., an Ohio corporation.
"Xxxx Xxxxx Bond Indenture" shall mean that certain Trust Indenture dated
as of February 1, 1994 between County of Hamilton, Ohio, as Issuer and The Fifth
Third Bank, as Trustee.
"Additional Credit Party" shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 5.10.
"Administrative Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any other Person (excluding any
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition, a
Person shall be deemed to be "controlled by" a Person if such Person possesses,
directly or indirectly, power either (a) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such Person or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or
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base rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks; and "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published on the next succeeding Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive in the absence of manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (b) of the first sentence of
this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
opening of business on the date of such change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Loans which are Alternate Base Rate Loans
shall be the percentage set forth under the column "Alternate Base Rate Margin
", (ii) Loans which are LIBOR Rate Loans shall be the percentage set forth under
the column "LIBOR Rate Margin for Loans and Letter of Credit Fee", (iii) the
Letter of Credit Fee shall be the percentage set forth under the column "LIBOR
Rate Margin for Loans and Letter of Credit Fee"; and (iv) the Commitment Fee
shall be the percentage set forth under the column "Commitment Fee":
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LIBOR Rate
Margin for
Alternate Loans
Leverage Base Rate and Letter of Commitment
Level Ratio Margin Credit Fee Fee
-------------- ---------------------------------------- ----------------------- ----------------------- ----------------------
I greater than or equal to 5.50 2.00% 3.25% 0.50%
-------------- ---------------------------------------- ----------------------- ----------------------- ----------------------
< 5.50 to 1.0 but
II greater than or equal to 5.00 to 1.0 1.75% 3.00% 0.50%
-------------- ---------------------------------------- ----------------------- ----------------------- ----------------------
< 5.00 to 1.0 but
III greater than or equal to 4.50 to 1.0 1.50% 2.75% 0.50%
-------------- ---------------------------------------- ----------------------- ----------------------- ----------------------
< 4.50 to 1.0 but
IV greater than or equal to 4.00 to 1.0 1.25% 2.50% 0.50%
-------------- ---------------------------------------- ----------------------- ----------------------- ----------------------
< 4.00 to 1.0 but
V greater than or equal to 3.00 to 1.0 1.00% 2.25% 0.50%
-------------- ---------------------------------------- ----------------------- ----------------------- ----------------------
VI < 3.00 to 1.0 0.75% 2.00% 0.50%
-------------- ---------------------------------------- ----------------------- ----------------------- ----------------------
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an "Interest Determination Date"). Such Applicable Percentage shall
be effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Percentages shall be based on Level I
until the first Interest Determination Date occurring after September 30, 1999.
After the Closing Date, if the Borrower shall fail to provide the quarterly
financial information and certifications in accordance with the provisions of
Sections 5.1(b) and 5.2(b), the Applicable Percentage from such Interest
Determination Date shall, on the date five (5) Business Days after the date by
which the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on Level I
until such time as such information and certifications are provided, whereupon
the Level shall be determined by the then current Leverage Ratio.
"Asset Disposition" shall mean the disposition (other than as a result of
a Recovery Event) of any or all of the assets (including, without limitation,
the Capital Stock of a Subsidiary or any ownership interest in a joint venture)
of any Credit Party, whether by sale, lease, transfer or otherwise. The term
"Asset Disposition" shall not include (i) Specified Sales, (ii) the sale, lease
or transfer of assets (including licensing of Intellectual Property) permitted
by Section 6.5(a)(iii) or (iv), or (iii) any Equity Issuance.
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"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"Borrower" shall have the meaning set forth in the first paragraph of
this Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such Loan
is made.
"Business" shall have the meaning set forth in Section 3.10(b).
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"Capital Lease" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean (i) 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 ("Government Obligations"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a Lender) or
a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct
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obligations issued by or fully guaranteed by the United States of America, (v)
obligations of any state of the United States or any political subdivision
thereof for the payment of the principal and redemption price of and interest on
which there shall have been irrevocably deposited Government Obligations
maturing as to principal and interest at times and in amounts sufficient to
provide such payment, and (vi) auction preferred stock rated in the highest
short-term credit rating category by S&P or Moody's.
"Casualty Event" shall mean any theft, loss, physical destruction or
damage, taking or similar event with respect to any property or assets.
"Change of Control" means (i) a sale of a majority of the consolidated
assets of the Parent and its Subsidiaries, in a single transaction or a series
of related transactions to any Person or two or more Persons acting in concert,
(ii) (A) prior to an initial public offering, the failure of Citicorp Venture
Capital, Inc. or one or more of its Affiliates and management shareholders
existing as of the Closing Date (together with their Permitted Transferees (as
such term is defined in the Securityholders Agreement referred to on Schedule
6.7)), collectively to own (directly or indirectly) at least 45% of the Voting
Stock on a fully diluted as if converted basis of the Parent, and (B) following
an initial public offering, the failure of Citicorp Venture Capital, Inc. or one
or more of its Affiliates and management shareholders existing as of the Closing
Date (together with their Permitted Transferees (as such term is defined in the
Securityholders Agreement referred to on Schedule 6.7)), to own (directly or
indirectly) at least 33% of the Voting Stock on a fully diluted as if converted
basis of the Parent or management shareholders existing as of the Closing Date
to own (directly or indirectly) at least 10% of the Voting Stock on a fully
diluted as if converted basis of the Parent or (iii) the Borrower shall cease to
be a wholly-owned subsidiary of the Parent or (iv) any Person or two or more
Persons acting in concert shall have acquired beneficial ownership, directly or
indirectly, or shall have acquired by contract or otherwise control over, Voting
Stock of the Parent, representing (A) prior to an initial public offering, an
amount equal to or greater than the amount of Voting Stock of the Parent then
owned by Citicorp Venture Capital, Inc. or one or more of its Affiliates and
management shareholders on a fully diluted as if converted basis and (B)
following an initial public offering, an amount representing 25% or more of all
Voting Stock of the Parent on a fully diluted as if converted basis or (v)
Continuing Directors shall cease for any reason to constitute a majority of the
members of the board of directors of the Parent then in office. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of the
Securities and Exchange Commission promulgated under the Securities Exchange Act
of 1934.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents.
"Commitment" shall mean the Revolving Commitment, the Term Loan
Commitment and the LOC Commitment, individually or collectively, as appropriate.
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"Commitment Fee" shall have the meaning set forth in Section 2.4(a).
"Commitment Percentage" shall mean the Revolving Commitment Percentage,
the Term Loan Commitment Percentage and/or the LOC Commitment Percentage, as
appropriate.
"Commitment Period" shall mean the period from and including the Closing
Date to but not including the Maturity Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Parent within the meaning
of Section 4001 of ERISA or is part of a group which includes the Parent and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Capital Expenditures" means, for any period, all capital
expenditures of the Parent and its Subsidiaries on a consolidated basis for such
period, as determined in accordance with GAAP. The term "Consolidated Capital
Expenditures" shall not include (i) capital expenditures in respect of the
reinvestment of proceeds derived from Recovery Events received by the Parent and
its Subsidiaries to the extent that such reinvestment is permitted under the
Credit Documents and (ii) capital expenditures of up to $5,250,000 made on
behalf of the Parent and its Subsidiaries in connection with the construction of
a new manufacturing facility in Cincinnati, Ohio.
"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) Consolidated
Interest Expense, plus (B) total federal, state, local and foreign income,
franchise, value added and other taxes, plus (C) depreciation, amortization
expense and other non-cash charges, all as determined in accordance with GAAP,
plus (D) losses (or minus gains) from sales or other dispositions of assets
(other than sales of inventory in the ordinary course of business) plus (E)
Permitted Adjustments plus (F) Transaction Costs.
"Consolidated Interest Expense" means, for any period, all interest
expense (excluding pay-in-kind interest) of the Parent and its Subsidiaries on a
consolidated basis including the interest component of Capital Lease
Obligations, as determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Parent and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
"Consolidated Net Worth" means as of any date with respect to the
Parent and its Subsidiaries on a consolidated basis, Consolidated Total Assets
minus Consolidated Total Liabilities, as determined in accordance with GAAP.
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"Consolidated Total Assets" means, as of any date with respect to the
Parent and its Subsidiaries on a consolidated basis, total assets, as determined
in accordance with GAAP.
"Consolidated Total Liabilities" means, as of any date with respect to
the Parent and its Subsidiaries on a consolidated basis, total liabilities, as
determined in accordance with GAAP.
"Consolidated Working Capital" means, at any time, the excess of (i)
current assets of the Parent and its Subsidiaries on a consolidated basis at
such time less (ii) current liabilities of the Parent and its Subsidiaries on a
consolidated basis at such time, all as determined in accordance with GAAP. The
term "Consolidated Working Capital" shall not include (i) cash and (ii) current
maturities of long-term Indebtedness.
"Continuing Directors" means 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 Parent (together with any new
director whose election by the Parent board of directors or whose nomination for
election by the Parent'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).
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, the LOC Documents, the Reimbursement
Agreement and the Security Documents.
"Credit Party" shall mean any of the Borrower or the Guarantors.
"Credit Party Obligations" shall mean, without duplication, (i) all of
the liabilities and obligations of the Credit Parties to the Lenders (including
the Issuing Lender) and the Administrative Agent, whenever arising, under this
Agreement, the Notes or any of the other Credit Documents (including, but not
limited to, any interest accruing after the occurrence of a filing of a petition
of bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and obligations, whenever arising, owing from any
Credit Party to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"Debt Issuance" shall mean the issuance of any Indebtedness for borrowed
money by any Credit Party (excluding, for purposes hereof, any Equity Issuance
or any Indebtedness of the Parent and its Subsidiaries permitted to be incurred
pursuant to Section 6.1).
"Default" shall mean any of the events specified in Section 7.1, whether
or not any requirement for the giving of notice or the lapse of time, or both,
or any other condition, has been satisfied.
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"Defaulting Lender" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.
"Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Earnout Payments" shall mean any payments which any Credit Party is or
shall be legally obligated to make to Xxxxx Xxxxxx pursuant to the terms of
Section 2(c)(iv) of that certain Employment Agreement dated as of May 18, 1999
by and among Star Bedding Products Limited, Xxxxx Xxxxxx and Sleepmaster L.L.C.
"Environmental Laws" shall mean any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"Equity Issuance" shall mean any issuance by any Credit Party to any
Person which is not a Credit Party of (a) shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the exercise of options or warrants or
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity. The term "Equity Issuance" shall not include (i) any Asset
Disposition, (ii) any Debt Issuance, (iii) issuances to members of management
pursuant to stock option plans of the Credit Parties as in effect on the Closing
Date, or (iv) issuances of equity for all or a portion of the purchase price of
Permitted Acquisitions.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or
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emergency reserves) in respect of Eurocurrency liabilities, as defined in
Regulation D of such Board as in effect from time to time, or any similar
category of liabilities for a member bank of the Federal Reserve System in New
York City.
"Event of Default" shall mean any of the events specified in Section 7.1;
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow" means, with respect to any fiscal year period of the
Parent and its Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period minus (b) capital expenditures made during
such period minus (c) increases (or plus decreases) in Consolidated Working
Capital for such period minus (d) Scheduled Funded Debt Payments made during
such period minus (e) Consolidated Interest Expense during such period minus (f)
amounts paid in respect of federal, state, local and foreign income, value added
and similar taxes with respect to such period minus (g) voluntary prepayments
made in accordance with Section 2.6(a) made during such period minus (h)
Restricted Payments actually made during such period pursuant to Section
6.11(c)(i) and (v).
"Excluded Equity Issuance" shall mean any issuance by any Credit Party of
shares of its Capital Stock to members of management which result in Net Cash
Proceeds in an aggregate amount for all such issuances not to exceed $1,000,000.
"Existing Credit Agreement" shall have the meaning set forth in the
recitals hereto.
"Existing Letters of Credit" shall mean that (i) irrevocable direct pay
letter of credit issued by First Union to Branch Banking and Trust Company as
Credit Facility Trustee pursuant to the Reimbursement Agreement in the amount of
approximately $6,900,000 to support the PBBC Industrial Development Bonds, (ii)
Irrevocable Letter of Credit No. SM410694C issued by First Union to Fifth Third
Bank for the account of Xxxx Xxxxx Corporation in the amount of $2,284,425 and
(iii) Irrevocable Letter of Credit No. SM408849C issued by First Union to Xxxxx
Mountain in the amount of $720,462.
"Existing Seller Debt" shall mean (i) those certain Junior Subordinated
Notes each dated as of November 14, 1996 as may be amended or exchanged from
time to time in an initial aggregate principal amount of $7,000,000 of the
Parent together with the pay-in-kind interest notes issued thereon, and (ii) the
Retroactive Notes.
"Extension of Credit" shall mean, as to any Lender, the making of a Loan
by such Lender or the issuance of, or participation in, a Letter of Credit by
such Lender.
"Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated September 8, 1999
addressed to the Borrower from the Administrative Agent, as amended, modified or
otherwise supplemented.
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"First Union" shall mean First Union National Bank, a national banking
association.
"Fixed Charge Coverage Ratio" shall mean, as of the end of each fiscal
quarter of the Parent, for the Parent and its Subsidiaries on a consolidated
basis for the four consecutive quarters ending on such date, without
duplication, the ratio of (i) Consolidated EBITDA for the applicable period
minus Consolidated Capital Expenditures for the applicable period to (ii) the
sum of Consolidated Interest Expense for the applicable period plus taxes paid
in cash during the applicable period plus dividend payments or other
distributions made during the applicable period plus Scheduled Funded Debt
Payments for the applicable period. Notwithstanding the foregoing, for purposes
of calculating the Fixed Charge Coverage Ratio of the Parent and its
Subsidiaries for the first three complete fiscal quarters to occur after the
Closing Date, the Fixed Charge Coverage Ratio shall be determined by annualizing
the components thereof such that for the first complete fiscal quarter to occur
after the Closing Date such components would be multiplied by four (4), the
first two complete fiscal quarters would be multiplied by two (2) and the first
three complete fiscal quarters would be multiplied by one and one-third (1e).
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clauses (e), (f) and (i) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Funded Debt of others of
the type referred to in clause (a) above secured by (or for which the holder of
such Funded Debt has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from, property
owned or acquired by such Person, whether or not the obligations secured thereby
have been assumed, (c) all Guaranty Obligations of such Person with respect to
Funded Debt of the type referred to in clause (a) above of another Person, (d)
Funded Debt of the type referred to in clause (a) above of any partnership or
unincorporated joint venture in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto, and (e) all Earnout
Payments capitalized on any Credit Party's balance sheet in accordance with
GAAP. For purposes of determining the Leverage Ratio only, the term "Funded
Debt" shall not include Indebtedness owing in respect of the PIK Subordinated
Debt.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"Government Acts" shall have the meaning set forth in Section 2.18(a).
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"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
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Indebtedness of any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any property constituting security therefor,
(ii) to advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
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.
"Guarantor" shall mean (a) the Parent, (b) any of the Domestic
Subsidiaries identified as a "Guarantor" on the signature pages hereto and (c)
any Additional Credit Party which executes a Joinder Agreement, together with
their successors and permitted assigns.
"Guaranty" shall mean the guaranty of the Guarantors set forth in Article
X.
"Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of Property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements, (j) the maximum amount of all standby letters
of credit issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred
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Capital Stock issued by such Person and which by the terms thereof could be (at
the request of the holders thereof or otherwise) subject to mandatory sinking
fund payments, redemption (prior to the Maturity Date) or other acceleration,
(l) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product, and (m) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer.
"Indenture" shall mean that certain Indenture in respect of the
Subordinated Notes dated as of May 18, 1999.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Intellectual Property" shall have the meaning set forth in Section 3.16.
"Interest Coverage Ratio" means, with respect to the Parent and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Parent and its Subsidiaries, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period. Notwithstanding the foregoing, for purposes of calculating the
Interest Coverage Ratio of the Parent and its Subsidiaries for the first three
complete fiscal quarters to occur after the Closing Date, the Interest Coverage
Ratio shall be determined by annualizing the Consolidated Interest Expense
component thereof such that for the first complete fiscal quarter to occur after
the Closing Date such components would be multiplied by four (4), the first two
complete fiscal quarters would be multiplied by two (2) and the first three
complete fiscal quarters would be multiplied by one and one-third (1 e).
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan, the last day of each March, June, September and December and on the
Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (c) as to any LIBOR
Rate Loan having an Interest Period longer than three months, each day which is
three months after the first day of such Interest Period and the last day of
such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower in the notice of borrowing or notice of conversion given with
respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the
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Administrative Agent not less than three Business Days prior to the last
day of the then current Interest Period with respect thereto;
provided that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a LIBOR Rate Loan would
otherwise end on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the relevant
calendar month;
(C) if the Borrower shall fail to give notice as provided above, the
Borrower shall be deemed to have selected an Alternate Base Rate Loan to
replace the affected LIBOR Rate Loan;
(D) any Interest Period in respect of any Loan that would otherwise
extend beyond the Maturity Date shall end on the Maturity Date; and
(E) no more than five (5) LIBOR Tranches may be in effect at any
time. For purposes hereof, LIBOR Rate Loans with different Interest
Periods shall be considered as separate LIBOR Tranches, even if they
shall begin on the same date and have the same duration, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new LIBOR Tranche.
"Issuing Lender" shall mean First Union.
"Issuing Lender Fees" shall have the meaning set forth in Section 2.4(c).
"Joinder Agreement" shall mean a Joinder Agreement substantially in the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"Lender" shall have the meaning set forth in the first paragraph of this
Agreement.
"Letters of Credit" shall mean (i) the Existing Letters of Credit, and
(ii) any new letter of credit issued by the Issuing Lender pursuant to the terms
hereof, as such Letters of Credit may be amended, modified, extended, renewed or
replaced from time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section 2.3
(b).
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"Leverage Ratio" shall mean, as of the end of each fiscal quarter of the
Parent, for the Parent and its Subsidiaries on a consolidated basis for the four
consecutive quarters ending on such date, the ratio of (a) Funded Debt of the
Parent and its Subsidiaries on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA for such period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if necessary,
to the next higher 1/100th of 1%) determined by the Administrative Agent
pursuant to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
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"Loan" shall mean a Revolving Loan and/or the Term Loan, as appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to issue
new Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to the
excess of (i) the LOC Committed Amount over (ii) the aggregate outstanding face
amount of the Existing Letters of Credit, such Lender's LOC Committed Amount as
specified in Schedule 2.1(a), as such amount may be reduced from time to time in
accordance with the provisions hereof.
"LOC Commitment Percentage" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.3(c) and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.1(a).
"LOC Documents" shall mean, 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 (ii) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"Mandatory Borrowing" shall have the meaning set forth in Section 2.3(e).
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of the Parent and its Subsidiaries taken as a whole, (b) the ability of the
Borrower or any Guarantor to perform its obligations, when such obligations are
required to be performed, under this Agreement, any of the Notes or any other
Credit Document or (c) the validity or enforceability of this Agreement, any of
the Notes or any of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
"Material Contract" shall mean any contract or other arrangement, whether
written or oral, to which the Borrower or any of its Subsidiaries is a party as
to which the breach, nonperformance, cancellation or failure to renew by any
party thereto could reasonably be expected to have a Material Adverse Effect.
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"Materials of Environmental Concern" shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" shall mean (i) with respect to the Term Loan, the last
scheduled quarterly payment date for the Term Loan set forth in Section 2.2(b)
and (ii) with respect to the Revolving Loans, the Revolving Commitment
Termination Date.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage Instruments" shall have the meaning set forth in Section
4.1(e).
"Mortgage Policies" shall have the meaning set forth in Section 4.1(e).
"Mortgaged Properties" shall have the meaning set forth in Section
4.1(e).
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by
any Credit Party in respect of any Asset Disposition, Equity Issuance or Debt
Issuance, net of (a) direct costs (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and (b) taxes
paid or payable as a result thereof; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by any Credit Party in
any Asset Disposition, Equity Issuance or Debt Issuance.
"Note" or "Notes" shall mean the Revolving Notes and/or the Term Notes,
collectively, separately or individually, as appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).
"Notice of Conversion" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.9.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
"Parent" shall have the meaning set forth in the first paragraph of this
Agreement.
"Participant" shall have the meaning set forth in Section 9.6(b).
"Participation Interest" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.3(c).
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"PBBC" shall mean Palm Beach Bedding Company, a Florida corporation and a
wholly-owned subsidiary of the Borrower.
"PBBC Industrial Development Bonds" shall mean the Variable Rate Demand
Industrial Development Prime Bonds (Palm Beach Bedding Company Project), Series
1996 in the original aggregate principal amount of $7,650,000 issued pursuant to
the PBBC Bond Indenture.
"PBBC Bond Indenture" shall mean that certain Trust Indenture dated as of
April 2, 1996, among the Palm Beach County, Florida, as Issuer, Branch Banking
and Trust Company, as Credit Facility Trustee and First Union National Bank, as
Bond Trustee.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall mean so long as no Default or Event of
Default shall have occurred and be continuing or would result therefrom on an
actual or pro forma basis, the acquisition by the Borrower or any of its
Subsidiaries of all or a majority of the Capital Stock or other ownership
interest in (or all or a substantial portion of the assets, property and/or
operations of) any Person (i) in a similar or related line of business, (ii)
which shall not have been rejected initially or thereafter by such Person's
board of directors, (iii) which shall have had earnings before the deduction of
interest, taxes, depreciation and amortization expense for the two immediately
preceding fiscal quarters in an amount greater than $0 and (iv) which, in an
aggregate amount for all such acquisitions, shall not exceed $5,000,000 in any
fiscal year.
"Permitted Adjustments" shall mean adjustments to Consolidated EBITDA for
the periods and in the amounts set forth on Schedule 1.1(c).
"Permitted Investments" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its Subsidiaries or
any receivables and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees and
Affiliates in an aggregate amount not to exceed $100,000 at any time
outstanding;
(v) investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
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(vi) investments, acquisitions or transactions permitted under
Section 6.5(b); and
(vii) additional loan advances and/or investments of a nature not
contemplated by the foregoing clauses hereof, provided that such loans,
advances and/or investments made pursuant to this clause (vii) shall not
exceed an aggregate amount of $100,000.
As used herein, "investment" means all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
"Permitted Liens" shall mean:
(i) Liens created by or otherwise existing, under or in connection
with this Agreement or the other Credit Documents in favor of the
Lenders;
(ii) Liens in favor of a Lender hereunder in connection with Hedging
Agreements, but only (A) to the extent such Liens secure obligations
under Hedging Agreements with any Lender, or any Affiliate of a Lender,
(B) to the extent such Liens are on the same collateral as to which the
Administrative Agent on behalf of the Lenders also has a Lien and (C) if
such provider and the Lenders shall share pari passu in the collateral
subject to such Liens;
(iii) purchase money Liens securing purchase money indebtedness (and
refinancings thereof) to the extent permitted under Section 6.1(c);
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to exceed 60
days), if any, related thereto has not expired or which are being
contested in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with GAAP
(or, in the case of Subsidiaries with significant operations outside of
the United States of America, generally accepted accounting principles in
effect from time to time in their respective jurisdictions of
incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or which
are being contested in good faith by appropriate proceedings;
(vi) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or
self-insurance arrangements;
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(vii) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements) , in whole or in part, of any Lien
referred to in the foregoing clauses; provided that such extension,
renewal or replacement Lien shall be limited to all or a part of the
property which secured the Lien so extended, renewed or replaced (plus
improvements on such property);
(ix) Liens arising in connection with judgments to the extent not
resulting in an Event of Default under Section 7.1(f);
(x) other Liens existing from time to time in an aggregate amount
not to exceed $250,000; and
(xi) Liens existing on the Closing Date and set forth on Schedule
1.1(b); provided, that (a) no such Lien shall at any time be extended to
cover property or assets other than the property or assets subject
thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced.
"Permitted Seller Debt" shall mean shall mean that certain Junior
Subordinated Note dated as of the Closing Date executed by the Parent in favor
of Nancourt, Inc. (formerly known as Star Bedding Products (1986) Limited) in an
aggregate principal amount of $1,000,000 Canadian dollars.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PIK Subordinated Debt" shall mean pay in kind subordinated debt issued
by the Parent to Citicorp Mezzanine Partners, L.P. in an aggregate initial
amount not to exceed $10,000,000 on terms and conditions reasonably satisfactory
to the Administrative Agent.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Amended and Restated Pledge Agreement
dated as of the Closing Date to be executed in favor of the Administrative Agent
by the Borrower and each of the other Credit Parties, as amended, modified,
restated or supplemented from time to time.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
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27
"Properties" shall have the meaning set forth in Section 3.10(a).
"Purchasing Lenders" shall have the meaning set forth in Section 9.6(c).
"Recovery Event" shall mean the receipt by the Parent or any of its
Subsidiaries of any cash insurance proceeds or condemnation award resulting from
a Casualty Event payable by reason of theft, loss, physical destruction or
damage, taking or similar event with respect to any of their respective property
or assets.
"Register" shall have the meaning set forth in Section 9.6(d).
"Reimbursement Agreement" shall mean the Reimbursement Agreement, dated
as of April 1, 1996 between Palm Beach Bedding Company, a Florida corporation
and First Union, as amended by the Amendment to Reimbursement Agreement, dated
March 3, 1998, pursuant to which an irrevocable direct pay letter of credit was
issued to PBBC to enhance the security and marketability of the PBBC Industrial
Development Bonds.
"Reorganization" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.
"Required Lenders" shall mean (a) if First Union holds 50% or more of the
Commitments (and Participation Interests therein) or, if the Commitments have
terminated, of outstanding Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of Credit), Lenders
holding in the aggregate not less than 66 and 2/3% of such Commitments and
Participation Interests therein or outstanding Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any Letters of
Credit), as the case may be, and (b) if First Union holds less than 50% of
Commitments (and Participation Interests therein) or, if the Commitments have
terminated, of outstanding Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of Credit), Lenders
holding in the aggregate greater than 50% of such Commitments and Participation
Interests therein or outstanding Loans and Participation Interests (including
the Participation Interests of the Issuing Lender in any Letters of Credit), as
the case may be, provided, however, that if any Lender shall be a Defaulting
Lender at such time, then there shall be excluded from the determination of
Required Lenders, Obligations (including Participation Interests) owing to such
Defaulting Lender and such Defaulting Lender's Commitments, or after termination
of the Commitments, the principal balance of the Obligations owing to such
Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and Bylaws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
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each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean, as to (a) the Borrower, the President
and Chief Executive Officer or the Chief Financial Officer or (b) any other
Credit Party, any duly authorized officer thereof.
"Restricted Payment" shall mean (a) any declaration (other than with
respect to pay-in-kind preferred equity in existence as of the Closing Date) or
payment of a dividend or other distribution, direct or indirect, on account of
any shares of any class of Capital Stock of the Borrower or any of its
Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of Capital Stock of the Borrower or any
of its Subsidiaries, now or hereafter outstanding, (c) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of the Borrower or
any of its Subsidiaries, now or hereafter outstanding, or (d) except as
permitted by Section 6.16, 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 Debt.
"Retroactive Notes" shall mean those certain Junior Subordinated Notes of
the Parent each dated on or following May 18, 1999 in an initial aggregate
principal amount not to exceed $600,000.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Loans in an aggregate principal amount at any
time outstanding up to such Lender's Revolving Committed Amount as specified in
Schedule 2.1(a), as such amount may be reduced from time to time in accordance
with the provisions hereof.
"Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"Revolving Commitment Termination Date" shall mean October 29, 2005.
"Revolving Committed Amount" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as such
amount may be reduced from time to time in accordance with the provisions
hereof, and, individually, the amount of each Lender's Revolving Commitment as
specified on Schedule 2.1(a).
"Revolving Loans" shall have the meaning set forth in Section 2.1.
"Revolving Note" or "Revolving Notes" shall mean the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to
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Section 2.1(e), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, supplemented, extended, renewed or replaced from
time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"Scheduled Funded Debt Payments" shall mean, as of any date of
determination for the Parent and its Subsidiaries, the sum of all scheduled
payments of principal on Funded Debt for the applied period ending on the date
of determination (including the principal component of payments due on Capital
Lease Obligations during the applicable period ending on the date of
determination).
"Security Agreement" shall mean the Amended and Restated Security
Agreement dated as of the Closing Date given by the Borrower and the other
Credit Parties to the Administrative Agent, as amended, modified or supplemented
from time to time in accordance with its terms.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and
delivered in connection with the attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements.
"Serta Consent" shall mean consent of the board of directors or
stockholders of Serta, Inc. in accordance with the applicable terms of any Serta
Licenses or the By-laws of Serta, Inc., as applicable, which provide, under
certain circumstances, that such consent shall not be unreasonably withheld.
"Serta Licenses" shall mean, collectively, (a) the two Standard License
Agreements and the two Memoranda of Agreement, dated January 12, 1995, between
the Borrower and Serta, Inc. covering certain territories in Pennsylvania, New
Jersey, New York, Connecticut, Maryland and Delaware, (b) the Standard License
Agreement and the Memoranda of Agreement, each dated November 4, 1989 between
Palm Beach Bedding Company and Serta Inc. covering a certain territory in
Florida, (c) the Standard License Agreement dated November 4, 1989, and the
Memoranda of Agreement dated December 1, 1969, between Xxxx Manufacturing
Company and Serta, Inc. covering certain territories in Pennsylvania, New York
and New Jersey, (d) the Standard License Agreement and the Memoranda of
Agreement, each dated December 1, 1969 between Xxxx Xxxxx, Inc. and Serta, Inc.,
(e) the Standard License Agreement dated November 4, 1989 between Xxxx Xxxxx,
Inc. and Serta, Inc., (f) the Standard License Agreement and the Memorandum of
Agreement, each dated as of December 1, 1998 between Xxxx Xxxxx, Inc. and Serta,
Inc., (g) Standard Canadian License Agreement dated as of May 18, 1999 between
Serta, Inc. and Star Bedding Products Limited, (h) License Agreement and the
Memorandum Agreement, each dated December 1, 1969 between Xxxx Xxxxx, Inc. and
Serta, Inc., (i) Memorandum of Agreement dated December 22, 1983 between Serta,
Inc. and Xxxx Xxxxx, Inc. and (j) all additional Standard License Agreements and
Memoranda of Agreement entered into between any Credit Party and Serta, Inc.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.
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"Solvent" shall mean, with respect to the Borrower, the Parent and their
Subsidiaries on a particular date, that any such Person (a) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature, (b) owns property having a value, both at fair valuation and at present
fair saleable value, greater than the amount required to pay its probable
liabilities (including contingencies), and (c) does not believe that it will
incur debts or liabilities beyond its ability to pay such debts or liabilities
as they mature.
"Specified Sales" shall mean (a) the sale, transfer or other disposition
of inventory, materials and licensing of Intellectual Property in the ordinary
course of business and (b) the sale, transfer or other disposition of Permitted
Investments described in clause (i) of the definition thereof.
"Subordinated Credit Agreement" shall mean the Subordinated Credit
Agreement dated as of November 5, 1999 by and between the Parent and Citicorp
Mezzanine Partners, L.P.
"Subordinated Debt" shall mean (i) the Subordinated Notes, (ii) the PIK
Subordinated Debt and (iii) any other Indebtedness incurred by any Credit Party
which by its terms is specifically subordinated in right of payment to the prior
payment of the Credit Party Obligations.
"Subordinated Notes" shall mean those certain 11% senior subordinated
notes in an aggregate principal amount of $115,000,000 due 2009 of the Borrower
and Sleepmaster Finance Corporation issued pursuant to the Indenture.
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Taxes" shall have the meaning set forth in Section 2.17(a).
"Term Loan" shall have the meaning set forth in Section 2.2(a).
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan in a principal
amount equal to such Lender's Term Loan Commitment Percentage of the Term Loan
Committed Amount (and for purposes of making determinations of Required Lenders
hereunder after the Closing Date, the principal amount outstanding on the Term
Loan).
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"Term Loan Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6.
"Term Loan Committed Amount" shall have the meaning set forth in Section
2.2(a).
"Term Note" or "Term Notes" shall mean the promissory notes of the
Borrower in favor of each of the Lenders evidencing the portion of the Term Loan
provided pursuant to Section 2.2(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Tranche" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"Transaction Costs" shall mean all costs and expenses incurred by the
Credit Parties in connection with the transactions closing as of the Closing
Date to the extent not capitalized on the balance sheet of the Parent in an
aggregate amount not to exceed $2,000,000.
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"2.17 Certificate" shall have the meaning set forth in Section 2.17.
"Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"Voting Stock" means, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of 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.
"Year 2000 Compliant" shall have the meaning set forth in Section 3.25.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or other
Credit Documents or any certificate or other document made or delivered
pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Section, Subsection, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
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(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 (or the defined terms used therein) to
eliminate the effect of any change in GAAP on the operation of such covenant (or
if the Administrative Agent notifies the Borrower that the Required Lenders wish
to amend Section 5.9 for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender at
the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
The parties hereto acknowledge and agree that, for purposes of all
calculations made under the financial covenants set forth in Section 5.9
(including without limitation for purposes of the definition of "Applicable
Percentage" hereunder), (i) in connection with any asset sale or disposition as
contemplated by Section 6.5, (A) income statement items (whether positive or
negative) attributable to the Property disposed of shall be excluded to the
extent relating to any period occurring prior to the date of such transaction
and (B) Indebtedness which is retired shall be excluded and deemed to have been
retired as of the first day of the applicable period and (ii) in connection with
any acquisition, merger or consolidation as referred to in Section 6.5, income
statement items (whether positive or negative) attributable to any Person or
Property so acquired shall, to the extent not otherwise included in such income
statements items for the Parent and its Subsidiaries on a consolidated basis in
accordance with GAAP or in accordance with any defined terms set forth herein,
be included to the extent relating to any period applicable in such calculations
and be deemed to have been included as of the first day of the applicable
period.
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ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 REVOLVING LOANS.
(a) Revolving Commitment. During the Commitment Period, subject to
the terms and conditions hereof, each Lender severally agrees to make
revolving credit loans ("Revolving Loans") to the Borrower from time to
time for the purposes hereinafter set forth; provided, however, that (i)
with regard to each Lender individually, the sum of such Lender's share
of outstanding Revolving Loans plus such Lender's LOC Commitment
Percentage of outstanding LOC Obligations shall not exceed such Lender's
Revolving Commitment Percentage of the aggregate Revolving Committed
Amount, and (ii) with regard to the Lenders collectively, the sum of the
aggregate amount of outstanding Revolving Loans plus outstanding LOC
Obligations shall not exceed the Revolving Committed Amount. For purposes
hereof, the aggregate amount available hereunder shall be THIRTY-THREE
MILLION DOLLARS ($33,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 2.5, the "Revolving
Committed Amount"). Revolving Loans may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the
provisions hereof; provided that no more than five (5) separate LIBOR
Tranches shall be outstanding at any one time. LIBOR Rate Loans shall be
made by each Lender at its LIBOR Lending Office and Alternate Base Rate
Loans at its Domestic Lending Office.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax) to
the Administrative Agent not later than 11:00 A.M. (Charlotte, North
Carolina time) on the Business Day prior to the date of requested
borrowing in the case of Alternate Base Rate Loans, and on the third
Business Day prior to the date of the requested borrowing in the
case of LIBOR Rate Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed,
(D) whether the borrowing shall be comprised of Alternate Base Rate
Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
Loans are requested, the Interest Period(s) therefor. A form of
Notice of Borrowing (a "Notice of Borrowing") is attached as
Schedule 2.1(b)(i). If the Borrower shall fail to specify in any
such Notice of Borrowing (I) an applicable Interest Period in the
case of a LIBOR Rate Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, or (II) the type of
Revolving Loan requested, then such notice shall be deemed to be a
request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Lender promptly upon
receipt of each Notice of Borrowing, the contents
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thereof and each such Lender's share thereof. All Revolving
Loans made on the Closing Date shall bear interest at the Alternate
Base Rate until the earlier of (i) the completion of the syndication
of the Commitments to financial institutions which shall become
Lenders hereunder or (ii) thirty days from the Closing Date.
(ii) Minimum Amounts. Each Revolving Loan borrowing shall be
in a minimum aggregate amount of (A) with respect to LIBOR Rate
Loans, $1,000,000 and integral multiples of $250,000 in excess
thereof (or the remaining amount of the Revolving Committed Amount,
if less) or (B) with respect to Alternate Base Rate Loans, $500,000
and integral multiples of $100,000 in excess thereof (or the
remaining amount of the Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to
the Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in Schedule 9.2, or at
such other office as the Administrative Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and in
funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower on the
books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Revolving Commitment Termination Date.
(d) Interest. Subject to the provisions of Section 2.9, Revolving
Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per
annum rate equal to the sum of the Alternate Base Rate plus the
Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as Revolving Loans
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate plus the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) Revolving Notes. Each Lender's Revolving Commitment Percentage
of the Revolving Loans shall be evidenced by a duly executed promissory
note of the Borrower to such Lender in substantially the form of Schedule
2.1(e).
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SECTION 2.2 TERM LOAN.
(a) Term Loan. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the
Borrower on the Closing Date such Lender's Term Loan Commitment
Percentage of a term loan in Dollars (the "Term Loan") in the
aggregate principal amount of THIRTY-SEVEN MILLION DOLLARS
($37,000,000) (the "Term Loan Committed Amount") for the purposes
hereinafter set forth. The Term Loan may consist of Alternate Base
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrower may request; provided that the Term Loans made on the
Closing Date shall bear interest at the Alternate Base Rate until
three (3) Business Days after the Closing Date. The Borrower shall
request the initial Term Loan borrowing by written notice (or
telephone notice promptly confirmed in writing which confirmation
may be by fax) to the Administrative Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the
date of requested borrowing. Amounts repaid on the Term Loan may not
be reborrowed. LIBOR Rate Loans shall be made by each Lender at its
LIBOR Lending Office and Alternate Base Rate Loans at its Domestic
Lending Office.
(b) Repayment of Term Loan. The principal amount of the Term
Loan shall be repaid in 23 consecutive fiscal quarterly installments
as follows, unless accelerated sooner pursuant to Section 7.2:
PRINCIPAL AMORTIZATION PAYMENT TERM LOAN PRINCIPAL AMORTIZATION
DATES PAYMENT
----------------------------------- -----------------------------------
March 31, 2000 $1,125,000
----------------------------------- -----------------------------------
June 30, 2000 $1,125,000
----------------------------------- -----------------------------------
September 29, 2000 $1,125,000
----------------------------------- -----------------------------------
December 29, 2000 $1,125,000
----------------------------------- -----------------------------------
March 30, 2001 $1,125,000
----------------------------------- -----------------------------------
June 29, 2001 $1,125,000
----------------------------------- -----------------------------------
September 28, 2001 $1,125,000
----------------------------------- -----------------------------------
December 31, 2001 $1,125,000
----------------------------------- -----------------------------------
March 29, 2002 $1,866,666
----------------------------------- -----------------------------------
June 28, 2002 $1,866,666
----------------------------------- -----------------------------------
September 30, 2002 $1,866,666
----------------------------------- -----------------------------------
December 31, 2002 $1,866,666
----------------------------------- -----------------------------------
March 31, 2003 $1,866,666
----------------------------------- -----------------------------------
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----------------------------------- -----------------------------------
June 30, 2003 $1,866,666
----------------------------------- -----------------------------------
September 30, 2003 $1,866,666
----------------------------------- -----------------------------------
December 31, 2003 $1,866,666
----------------------------------- -----------------------------------
March 31, 2004 $1,866,666
----------------------------------- -----------------------------------
June 30, 2004 $1,866,666
----------------------------------- -----------------------------------
September 30, 2004 $1,866,666
----------------------------------- -----------------------------------
December 31, 2004 $1,866,666
----------------------------------- -----------------------------------
March 31, 2005 $1,866,666
----------------------------------- -----------------------------------
June 30, 2005 $1,866,666
----------------------------------- -----------------------------------
September 30, 2005 $1,866,676
----------------------------------- -----------------------------------
(c) Interest on the Term Loan. Subject to the provisions of Section
2.8, the Term Loan shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as the
Term Loan shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate
equal to the sum of the Alternate Base Rate plus the Applicable
Percentage; and
(ii) LIBOR Rate Loans. During such periods as the Term Loan
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate plus the Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each
Interest Payment Date.
(d) Term Notes. Each Lender's Term Loan Commitment Percentage of the
Term Loan outstanding as of the Closing Date shall be evidenced by a duly
executed promissory note of the Borrower to such Lender in substantially
the form of Schedule 2.2(d).
SECTION 2.3 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. The Issuing Lender has heretofore issued the Existing
Letter of Credit. 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, during the Commitment Period the
Issuing Lender shall issue, and the Lenders shall participate in, Letters
of Credit for the account of the Borrower from time to time upon request
in a form acceptable to the Issuing Lender; provided, however, that (i)
the aggregate amount of LOC Obligations shall not at any time exceed
FIFTEEN
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MILLION DOLLARS ($15,000,000) (the "LOC Committed Amount"), (ii) the
sum of the aggregate amount of Loans outstanding plus LOC Obligations
outstanding shall not at any time exceed the Revolving Committed Amount,
(iii) all Letters of Credit shall be denominated in U.S. Dollars and (iv)
Letters of Credit shall be issued for the purpose of supporting
tax-advantaged variable rate demand note financing and for other lawful
corporate purposes and may be issued as standby letters of credit,
including in connection with workers' compensation and other insurance
programs, and trade letters of credit. Except as otherwise expressly
agreed upon by all the Lenders, no Letter of Credit shall have an
original expiry date more than twelve (12) months from the date of
issuance; provided, however, that so long as no Default or Event of
Default has occurred and is continuing and subject to the other terms and
conditions to the issuance of Letters of Credit hereunder, the expiry
dates of Letters of Credit may be extended annually or periodically from
time to time on the request of the Borrower or by operation of the terms
of the applicable Letter of Credit to a date not more than twelve (12)
months from the date of extension; provided, further, that no Letter of
Credit, as originally issued or as extended, shall have an expiry date
extending beyond the Maturity 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. Any Letters of Credit issued
hereunder shall be in a minimum original face amount of $100,000. First
Union shall be the Issuing Lender on all Letters of Credit issued after
the Closing Date.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least five (5)
Business Days prior to the requested date of issuance. The Issuing Lender
will promptly upon request provide to the Administrative Agent for
dissemination to the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with
respect thereto which may have occurred since the date of any prior
report, and including therein, among other things, the account party, the
beneficiary, the face amount, expiry date as well as any payments or
expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the
Letters of Credit. The Issuing Lender will provide to the Administrative
Agent promptly upon request a summary report of the nature and extent of
LOC Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter of Credit
(or, with respect to the Existing Letter of Credit, automatically,
without any action by an Person, as of the Closing Date) shall be deemed
to have purchased without recourse a risk participation from the Issuing
Lender in such Letter of Credit and the obligations arising thereunder
and any collateral relating thereto, in each case in an amount equal to
its LOC Commitment Percentage of the obligations under such Letter of
Credit and shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and be obligated to pay to the Issuing
Lender therefor and discharge when due, its LOC Commitment Percentage of
the obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's participation in any Letter of Credit,
to the extent that the Issuing Lender has not been reimbursed as required
hereunder or under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such unreimbursed drawing
in same day funds on the day of
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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 and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on
the day of drawing under any Letter of Credit (with the proceeds of a
Loan obtained hereunder or otherwise) in same day funds as provided
herein or in the LOC Documents. If the Borrower shall fail to reimburse
the Issuing Lender as provided herein, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the Alternate
Base Rate plus two percent (2%). Unless the Borrower shall immediately
notify the Issuing Lender and the Administrative Agent of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to
have requested a Revolving Loan in the amount of the drawing as provided
in subsection (e) hereof, the proceeds of which will be used to satisfy
the reimbursement obligations. The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to payment
the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of
Credit drawn upon or any other Person, including without limitation any
defense based on any failure of the Borrower to receive consideration or
the legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of the
amount of any unreimbursed drawing and each Lender shall promptly pay to
the Administrative Agent for the account of the Issuing Lender in Dollars
and in immediately available funds, the amount of such Lender's LOC
Commitment Percentage of such unreimbursed drawing. Such payment shall be
made on the day such notice is received by such Lender from the Issuing
Lender if such notice is received at or before 2:00 P.M. (Charlotte,
North Carolina time), otherwise such payment shall be made at or before
12:00 Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Lender in full upon such request, such Lender
shall, on demand, pay to the Administrative Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from the
date of such drawing until such Lender pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two (2)
Business Days of the date of drawing, the Federal Funds Effective Rate
and thereafter at a rate equal to the Alternate 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 Agreement or the Commitments
hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
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(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
to reimburse a drawing under a Letter of Credit, the Administrative Agent
shall give notice to the Lenders that a Revolving Loan has been requested
or deemed requested in connection with a drawing under a Letter of
Credit, in which case a Revolving Loan borrowing comprised entirely of
Alternate Base Rate Loans (each such borrowing, a "Mandatory Borrowing")
shall be immediately made (without giving effect to any termination of
the Commitments pursuant to Section 7.2) pro rata based on each Lender's
respective Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 7.2) and
the proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing may
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 4.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request
for a Revolving Loan to be made by the time otherwise required in Section
2.1(b), (v) the date of such Mandatory Borrowing, or (vi) any reduction
in the Revolving Committed Amount after any such Letter of Credit may
have been drawn upon; provided, however, that in the event any such
Mandatory Borrowing should be less than the minimum amount for borrowings
of Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower
shall pay to the Administrative Agent for its own account an
administrative fee of $500. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower), then
each such Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and
prior to such purchase) its Participation Interests in the outstanding
LOC Obligations; provided, further, that in the event any Lender shall
fail to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of such Lender's
unfunded Participation Interest therein shall bear interest payable to
the Issuing Lender upon demand, at the rate equal to, if paid within two
(2) Business Days of such date, the Federal Funds Effective Rate, and
thereafter at a rate equal to the Alternate Base Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce
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(the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(h) 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. The
Reimbursement Agreement is and shall be deemed amended such that the
representations and warranties, covenants and events of default (and
definitions related thereto) set out in the Reimbursement Agreement (the
"Existing Provisions"), except to the extent they relate specifically to
the relevant bonds or relevant remarketing program, conform with the
representations and warranties, covenants and events of default (and
definitions related thereto) set out in this Credit Agreement (the
"Incorporated Provisions"). So long as any obligations remain outstanding
under the PBBC Industrial Development Bonds or any documentation related
thereto, such amendments shall survive (i) the payment in full of all
obligations due the Lenders by the Borrower under this Credit Agreement,
(ii) the termination (for any reason) of this Credit Agreement, (iii) the
sale or participation (in whole or in part) of a Lender's interest in
this Credit Agreement, or (iv) any other event which has an effect to
terminate the obligations of the Borrower to the Lenders under this
Credit Agreement. Upon the happening of one of the events set forth in
the immediately preceding sentence, PBBC agrees to promptly execute a
modification of the Reimbursement Agreement to confirm such amendment.
Notwithstanding the preceding sentence or the failure of any such
modification to be executed, the Credit Parties, to the extent
applicable, must remain in compliance with the Incorporated Provisions as
if set forth in the Reimbursement Agreement. Any future modification of
or amendment to the Incorporated Provisions shall be a modification of or
amendment to the relevant Reimbursement Agreements for purposes of
compliance with such agreements. Likewise, if First Union grants a waiver
of compliance of the Incorporated Provisions for any period, such waiver
shall be deemed to be a waiver of compliance of the relevant
Reimbursement Agreement for the limited period of time for which the
waiver was granted.
(i) Designation of Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.3(a), a Letter of
Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of a Credit Party other than
the Borrower, provided that notwithstanding such statement, the Borrower
shall be the actual account party for all purposes of the 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.
SECTION 2.4 FEES.
(a) Commitment Fee. In consideration of the Revolving Commitment,
the Borrower agrees to pay to the Administrative Agent for the ratable
benefit of the Lenders a commitment fee (the "Commitment Fee") in an
amount equal to the Applicable Percentage per annum on the average daily
unused amount of the aggregate Revolving Committed Amount.
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The Commitment Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior calendar quarter.
(b) Letter of Credit Fees. In consideration of the LOC Commitments,
the Borrower agrees to pay to the Issuing Lender a fee (the "Letter of
Credit Fee") equal to the Applicable Percentage per annum on the average
daily maximum amount available to be drawn under each Letter of Credit
from the date of issuance to the date of expiration. In addition to such
Letter of Credit Fee, the Issuing Lender may charge, and retain for its
own account without sharing by the other Lenders, an additional facing
fee of one-eighth of one percent (1/8%) per annum on the average daily
maximum amount available to be drawn under each such Letter of Credit
issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Lenders (including
the Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee
shall be payable quarterly in arrears on the 15th day following the last
day of each calendar quarter for the prior calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit Fees
payable pursuant to subsection (b) hereof, the Borrower shall pay to the
Issuing Lender for its own account without sharing by the other Lenders
the reasonable and customary charges from time to time of the Issuing
Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "Issuing Lender Fees").
(d) Administrative Fee. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the
Fee Letter.
SECTION 2.5 COMMITMENT REDUCTIONS.
(a) Voluntary Reductions. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than
three (3) Business Days' prior notice to the Administrative Agent (which
shall notify the Lenders thereof as soon as practicable) of each such
termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction which shall be in a minimum
amount of $500,000 or a whole multiple of $250,000 in excess thereof (or
the remaining amount of the Loans, if less) and shall be irrevocable and
effective upon receipt by the Administrative Agent, provided that no such
reduction or termination shall be permitted if after giving effect
thereto, and to any prepayments of the Revolving Loans made on the
effective date thereof, the sum of the then outstanding aggregate
principal amount of the Revolving Loans plus outstanding LOC Obligations
would exceed the Revolving Committed Amount.
(b) Mandatory Reductions. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 2.6(b) (ii),
(iii) and (iv), the Revolving Committed Amount shall be automatically
permanently reduced by the amount of such required prepayment and/or
reduction.
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(c) Revolving Commitment Termination Date. The Revolving Commitment
and the LOC Commitment shall automatically terminate on the Revolving
Commitment Termination Date.
SECTION 2.6 PREPAYMENTS.
(a) Optional Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of Revolving Loans and Term Loans shall be
in a minimum principal amount of $1,000,000 and integral multiples of
$250,000 in excess thereof with respect to LIBOR Rate Loans, and $500,000
and integral multiples of $100,000 in excess thereof with respect to
Alternate Base Rate Loans. The Borrower shall give three Business Days'
irrevocable notice in the case of LIBOR Rate Loans and one Business Day's
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable). Subject to the foregoing terms, amounts prepaid under this
Section 2.6(a) shall be applied as the Borrower may elect; provided that
if the Borrower fails to specify the application of an optional
prepayment then such prepayment shall be applied first to Revolving Loans
and then pro rata to the remaining principal installments of the Term
Loans, in each case first to Alternate Base Rate Loans and then to LIBOR
Rate Loans in direct order of Interest Period maturities. All prepayments
under this Section 2.6(a) shall be subject to Section 2.16, but otherwise
without premium or penalty. Interest on the principal amount prepaid
shall be payable on the next occurring Interest Payment Date that would
have occurred had such loan not been prepaid or, at the request of the
Administrative Agent, interest on the principal amount prepaid shall be
payable on any date that a prepayment is made hereunder through the date
of prepayment. Amounts prepaid on the Revolving Loans may be reborrowed
in accordance with the terms hereof. Amounts prepaid on the Term Loans
may not be reborrowed.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time after the
Closing Date, the sum of the aggregate principal amount of
outstanding Revolving Loans plus outstanding LOC Obligations shall
exceed the Revolving Committed Amount, the Borrower immediately
shall prepay the Revolving Loans and (after all Revolving Loans have
been repaid) cash collateralize the LOC Obligations, in an amount
sufficient to eliminate such excess.
(ii) Asset Dispositions. Promptly following any Asset
Disposition in excess of $250,000 in any fiscal year, the Borrower
shall notify the Administrative Agent thereof and prepay the Loans
in an aggregate amount equal to one hundred percent (100%) of the
Net Cash Proceeds derived from such Asset Disposition (such
prepayment to be applied as set forth in clause (vi) below);
provided, however, that such Net Cash Proceeds shall not be required
to be so applied to the extent the Borrower delivers to the
Administrative Agent a
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certificate that it intends to use such Net Cash Proceeds to
acquire fixed or capital assets in replacement of the disposed
assets within 180 days of the receipt of such Net Cash Proceeds, it
being expressly agreed that any Net Cash Proceeds not so reinvested
shall be applied to repay the Loans.
(iii) Issuances. Immediately upon receipt by any Credit Party
of proceeds from (A) any Debt Issuance, the Borrower shall notify
the Administrative Agent thereof and prepay the Loans in an
aggregate amount equal to one-hundred percent (100%) of the Net Cash
Proceeds of such Debt Issuance to the Lenders (such prepayment to be
applied as set forth in clause (vi) below) or (B) any Equity
Issuance, other than an Excluded Equity Issuance, the Borrower shall
notify the Administrative Agent thereof and prepay the Loans in an
aggregate amount equal to one hundred percent (100%) of the Net Cash
Proceeds of such Equity Issuance to the Lenders.
(iv) Recovery Event. To the extent of cash proceeds received
in connection with a Recovery Event which are not applied in
accordance with Section 6.5(a)(ii), immediately following the 180th
day occurring after the receipt by a Credit Party of such cash
proceeds, the Borrower shall notify the Administrative Agent thereof
and prepay the Loans in an aggregate amount equal to one-hundred
percent (100%) of such cash proceeds to the Lenders (such prepayment
to be applied as set forth in clause (vi) below).
(v) Excess Cash Flow. Within 90 days after the end of each
fiscal year (commencing with the fiscal year ending December 31,
2000), the Borrower shall prepay the Loans in an amount equal to 50%
of the Excess Cash Flow earned during such prior fiscal year;
provided, however, that no prepayment shall be required pursuant to
this Section 2.6(b)(v), if the Leverage Ratio shall be less than or
equal to 3.25 to 1.0 as of the end of such fiscal year (such
prepayment to be applied as set forth in clause (vi) below).
(vi) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.6(b) shall be applied
with respect to all amounts prepaid pursuant to Sections 2.6(b)(ii)
through (v), (1) first to the Term Loan (ratably to the remaining
principal installments thereof), and (2) second to the Revolving
Loans and (after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations. Within the
parameters of the applications set forth above, prepayments shall be
applied first to Alternate Base Rate Loans and then to LIBOR Rate
Loans in direct order of Interest Period maturities. All prepayments
under this Section 2.6(b) shall be subject to Section 2.16 and be
accompanied by interest on the principal amount prepaid through the
date of prepayment.
(vii) Prepayment Account. If the Borrower is required to make
a mandatory prepayment of LIBOR Rate Loans under this Section
2.6(b), the Borrower shall have the right, in lieu of making such
prepayment in full, to
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deposit an amount equal to such mandatory prepayment with the
Administrative Agent in a cash collateral account maintained
(pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
Administrative Agent as collateral for the prepayment of such LIBOR
Rate Loans and shall be applied to the prepayment of the applicable
LIBOR Rate Loans at the end of the current Interest Periods
applicable thereto. At the request of the Borrower, amounts so
deposited shall be invested by the Administrative Agent in Cash
Equivalents maturing prior to the date or dates on which it is
anticipated that such amounts will be applied to prepay such LIBOR
Rate Loans; any interest earned on such Cash Equivalents will be for
the account of the Borrower and the Borrower will deposit with the
Administrative Agent the amount of any loss on any such Cash
Equivalents to the extent necessary in order that the amount of the
prepayment to be made with the deposited amounts may not be reduced.
SECTION 2.7 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
All borrowings, payments and prepayments in respect of the Revolving
Loans and Term Loans shall be in such amounts and be made pursuant to such
elections so that after giving effect thereto the aggregate principal amount of
the Loans comprising any Tranche shall not be less than (i) with respect to
LIBOR Rate Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof
and (ii) with respect to Base Rate Loans, $500,000 or a whole multiple of
$100,000 in excess thereof.
SECTION 2.8 DEFAULT RATE AND PAYMENT DATES.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Alternate Base Rate plus 2%).
SECTION 2.9 CONVERSION OPTIONS.
(a) The Borrower may elect from time to time to convert Alternate
Base Rate Loans to LIBOR Rate Loans, by giving the Administrative Agent
irrevocable written notice of such election not later than 11:00 a.m.
(Charlotte, North Carolina time) on the date which is three Business Days
prior to the requested date of conversion. A form of Notice of
Conversion/ Extension is attached as Schedule 2.9. If the date upon which
an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is
not a Business Day, then such conversion shall be made on the next
succeeding Business Day and during the period from such last day of an
Interest Period to such succeeding Business Day such Loan shall bear
interest as if it were an Alternate Base Rate Loan. All or any part of
outstanding Alternate Base Rate Loans may be converted as provided
herein,
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provided that (i) no Loan may be converted into a LIBOR Rate Loan
when any Default or Event of Default has occurred and is continuing and
(ii) partial conversions shall be in an aggregate principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the Borrower with the notice provisions contained in Section 2.9(a);
provided, that no LIBOR Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, in which case
such Loan shall be automatically converted to an Alternate Base Rate Loan
at the end of the applicable Interest Period with respect thereto. If the
Borrower shall fail to give timely notice of an election to continue a
LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted
hereunder, such LIBOR Rate Loans shall be automatically converted to
Alternate Base Rate Loans at the end of the applicable Interest Period
with respect thereto.
SECTION 2.10 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base Rate
Loans shall be calculated on the basis of a year of 365 days (or 366
days, as applicable) for the actual days elapsed. All other fees,
interest and all other amounts payable hereunder shall be calculated on
the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of each determination of a LIBOR Rate on the Business Day of
the determination thereof. Any change in the interest rate on a Loan
resulting from a change in the Alternate Base Rate shall become effective
as of the opening of business on the day on which such change in the
Alternate Base Rate shall become effective. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error.
The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing the computations used by the
Administrative Agent in determining any interest rate.
SECTION 2.11 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made pro rata according to the respective
Commitment Percentages of the Lenders. Each payment under this Agreement
or any Note shall be applied, first, to any fees then due and owing by
the Borrower pursuant to Section 2.4, second, to interest then due and
owing in respect of the Notes and, third, to principal then due and owing
hereunder and under the Notes. Each payment on account of any fees
pursuant to Section 2.4 shall be made pro rata in accordance with the
respective amounts due and owing (except as to the portion of the Letter
of Credit retained by the Issuing
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Lender and the Issuing Lender Fees). Each optional prepayment on
account of principal of the Loans shall be applied to such of the Loans
as the Borrower may designate (to be applied pro rata among the Lenders);
provided, that prepayments made pursuant to Section 2.14 shall be applied
in accordance with such section. Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section
2.6(b). All payments (including prepayments) to be made by the Borrower
on account of principal, interest and fees shall be made without defense,
set-off or counterclaim (except as provided in Section 2.17(b)) and shall
be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent's office specified on Schedule 9.2 in Dollars and in
immediately available funds not later than 1:00 P.M. (Charlotte, North
Carolina time) on the date when due. The Administrative Agent shall
distribute such payments to the Lenders entitled thereto promptly upon
receipt in like funds as received. If any payment hereunder (other than
payments on the LIBOR Rate Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a LIBOR Rate Loan becomes due and payable on
a day other than a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business
Day.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent or any Lender on
account of the Credit Party Obligations or any other amounts outstanding
under any of the Credit Documents or in respect of the Collateral shall
be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Administrative Agent in connection with enforcing the rights of the
Lenders under the Credit Documents and any protective advances made by
the Administrative Agent with respect to the Collateral under or pursuant
to the terms of the Security Documents;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
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FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whomever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied
in the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the then
outstanding Loans and LOC Obligations held by such Lender bears to the
aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available for
distribution pursuant to clause "FIFTH" above are attributable to the
issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Administrative Agent in a cash collateral account
and applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the
types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 2.11(b).
SECTION 2.12 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Loan available to the Administrative
Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent will promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also
be entitled to recover from the Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is recovered
by the Administrative Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for the applicable borrowing pursuant to
the Notice of Borrowing and (ii) from a Lender at the Federal Funds
Effective Rate.
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(b) Unless the Administrative Agent shall have been notified in
writing by the Borrower, prior to the date on which any payment is due
from it hereunder (which notice shall be effective upon receipt) that the
Borrower does not intend to make such payment, the Administrative Agent
may assume that such Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to each Lender on such payment date an
amount equal to the portion of such assumed payment to which such Lender
is entitled hereunder, and if the Borrower has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand, repay
to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the
date such amount was made available to such Lender, such Lender shall pay
to the Administrative Agent on demand interest on such amount in respect
of each day from the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is recovered
by the Administrative Agent at a per annum rate equal to the Federal
Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to the
Borrower or any Lender with respect to any amount owing under this
Section 2.12 shall be conclusive in the absence of manifest error.
SECTION 2.13 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall be converted into
Alternate Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected.
SECTION 2.14 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR
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Lending Office to make or maintain LIBOR Rate Loans as contemplated by this
Agreement or to obtain in the interbank eurodollar market through its LIBOR
Lending Office the funds with which to make such Loans, (a) such Lender shall
promptly notify the Administrative Agent and the Borrower thereof, (b) the
commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR
Rate Loans as such shall forthwith be suspended until the Administrative Agent
shall give notice that the condition or situation which gave rise to the
suspension shall no longer exist, and (c) such Lender's Loans then outstanding
as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest
Period for such Loans or within such earlier period as required by law as
Alternate Base Rate Loans. The Borrower hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any interest or fees payable by such
Lender to lenders of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through the Administrative
Agent, to the Borrower shall be conclusive in the absence of manifest error.
Each Lender agrees to use reasonable efforts (including reasonable efforts to
change its LIBOR Lending Office) to avoid or to minimize any amounts which may
otherwise be payable pursuant to this Section; provided, however, that such
efforts shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender in its sole discretion to be
material.
SECTION 2.15 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof 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 made subsequent to
the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any application
relating thereto, any LIBOR Rate Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof
(except for (A) changes in the rate of tax on the overall net income
of such Lender or (B) any changes in or additions to the rate or
basis of taxation imposed on such Lender by either its jurisdiction
or formation or the jurisdiction in which its lending office is
located);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate hereunder;
or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit
or to reduce any amount
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receivable hereunder or under any Note, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such additional cost or
reduced amount receivable which such Lender reasonably deems to be
material as determined by such Lender with respect to its LIBOR Rate
Loans or Letters of Credit. A certificate as to any additional amounts
payable pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the absence
of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or
LIBOR Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this paragraph of
this Section; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or
in the interpretation or application thereof or compliance by such Lender
or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any central bank or Governmental Authority made subsequent to the date
hereof does or shall have the effect of reducing the rate of return on
such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount reasonably deemed
by such Lender to be material, then from time to time, within fifteen
(15) days after demand by such Lender, the Borrower shall pay to such
Lender such additional amount as shall be certified by such Lender as
being required to compensate it for such reduction. Such a certificate as
to any additional amounts payable under this Section submitted by a
Lender (which certificate shall include a description of the basis for
the computation), through the Administrative Agent, to the Borrower shall
be conclusive absent manifest error.
(c) The agreements in this Section 2.15 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
SECTION 2.16 INDEMNITY.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees
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payable by such Lender to lenders of funds obtained by it in order to maintain
its Loans hereunder. A certificate as to any additional amounts payable pursuant
to this Section submitted by any Lender, through the Administrative Agent, to
the Borrower (which certificate must be delivered to the Administrative Agent
within thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.17 TAXES.
(a) All payments made by the Borrower hereunder or under any Note
will be, except as provided in Section 2.17(b), made free and clear of,
and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any Governmental Authority or by any
political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding any tax imposed on or measured by the net
income or profits of a Lender pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal office
or applicable lending office of such Lender is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities
with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively
as "Taxes"). If any Taxes are so levied or imposed, the Borrower agrees
to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for
herein or in such Note. The Borrower will furnish to the Administrative
Agent as soon as practicable after the date the payment of any Taxes is
due pursuant to applicable law certified copies (to the extent reasonably
available and required by law) of tax receipts evidencing such payment by
the Borrower. The Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the
amount of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Closing Date, or
in the case of a Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 9.6(d) (unless the respective
Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to
such Lender, (i) if the Lender is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, two accurate and complete original signed
copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Lender is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, either Internal
Revenue Service Form 1001 or 4224 as set forth in clause (i) above, or
(x) a certificate substantially in the form of Schedule 2.17 (any such
certificate, a "2.17 Certificate") and (y) two accurate and
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complete original signed copies of Internal Revenue Service Form W-8
(or successor form) certifying such Lender's entitlement to an exemption
from United States withholding tax with respect to payments of interest
to be made under this Agreement and under any Note. In addition, each
Lender agrees that it will deliver upon the Borrower's request updated
versions of the foregoing, as applicable, whenever the previous
certification has become obsolete or inaccurate in any material respect,
together with such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under
this Agreement and any Note. Notwithstanding anything to the contrary
contained in Section 2.17(a), but subject to the immediately succeeding
sentence, (x) each Borrower shall be entitled, to the extent it is
required to do so by law, to deduct or withhold Taxes imposed by the
United States (or any political subdivision or taxing authority thereof
or therein) from interest, fees or other amounts payable hereunder for
the account of any Lender which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Lender has not provided to
the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 2.17(a) to gross-up
payments to be made to a Lender in respect of Taxes imposed by the United
States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to
this Section 2.17(b) or (II) in the case of a payment, other than
interest, to a Lender described in clause (ii) above, to the extent that
such Forms do not establish a complete exemption from withholding of such
Taxes. Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 2.17, the Borrower agrees
to pay additional amounts and to indemnify each Lender in the manner set
forth in Section 2.17(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Closing Date in
any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which
might otherwise be payable pursuant to this Section; provided, however,
that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in
its sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant to this
Section 2.17 with respect to a Lender, such Lender shall use reasonable
efforts to obtain a refund of tax or credit against its tax liabilities
on account of such payment; provided that such Lender shall have no
obligation to use such reasonable efforts if either (i) it is in an
excess foreign tax credit position or (ii) it believes in good faith, in
its sole discretion, that claiming a refund or credit would cause adverse
tax consequences to it. In the event that such Lender receives such a
refund or credit, such Lender shall pay to the Borrower an
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amount that such Lender reasonably determines is equal to the net
tax benefit obtained by such Lender as a result of such payment by the
Borrower. In the event that no refund or credit is obtained with respect
to the Borrower's payments to such Lender pursuant to this Section 2.17,
then such Lender shall upon request provide a certification that such
Lender has not received a refund or credit for such payments. Nothing
contained in this Section 2.17 shall require a Lender to disclose or
detail the basis of its calculation of the amount of any tax benefit or
any other amount or the basis of its determination referred to in the
proviso to the first sentence of this Section 2.17 to the Borrower or any
other party.
(e) The agreements in this Section 2.17 shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
SECTION 2.18 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.5, the
Borrower hereby agrees to protect, indemnify, pay and save each Issuing
Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of
any Letter of Credit or (ii) the failure of the Issuing Lender to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(b) 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: (i) 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; (ii) 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; (iii) for failure of the
beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) 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; (v) for errors in interpretation of technical terms;
(vi) 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 (vii) 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.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender,
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under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such
Issuing Lender under any resulting liability to the Borrower. It is the
intention of the parties that this Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower, including, without limitation,
any and all risks of the acts or omissions, whether rightful or wrongful,
of any Government Authority. 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.
(d) Nothing in this Section 2.18 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.2(d)
hereof. The obligations of the Borrower under this Section 2.18 shall
survive the termination of this Agreement. No act or 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 Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.18, the Borrower shall have no obligation to indemnify any
Issuing Lender in respect of any liability incurred by such Issuing
Lender arising out of the gross negligence or willful misconduct of the
Issuing Lender (including action not taken by an Issuing Lender), as
determined by a court of competent jurisdiction.
SECTION 2.19 REPLACEMENT OF LENDERS.
If any Lender delivers a notice pursuant to Section 2.14, 2.15 or 2.17
(hereinafter any such Lender shall be referred to as a "Replaced Lender"), then
in such case, the Borrower may, upon at least five (5) Business Days' notice to
the Administrative Agent and such Replaced Lender, designate a replacement
lender (a "Replacement Lender") acceptable to the Administrative Agent in its
reasonable discretion, to which such Replaced Lender shall, subject to its
receipt (unless a later date for the remittance thereof shall be agreed upon by
the Borrower and the Replaced Lender) of all amounts owed to such Replaced
Lender hereunder, assign all (but not less than all) of its rights and
obligations hereunder. Upon any assignment by any Lender pursuant to this
Section 2.19 becoming effective, the Replacement Lender shall thereupon be
deemed to be a "Lender" for all purposes of this Agreement and such Replaced
Lender shall thereupon cease to be a "Lender" for all purposes of this Agreement
and shall have no further rights or obligations hereunder (other than pursuant
to Sections 2.13, 2.14, 2.15 or 9.5 while such Replaced Lender was a Lender).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
The balance sheets and the related statements of income and of cash flows
of the Borrower for fiscal year 1997 and fiscal year 1998 audited by
PricewaterhouseCoopers L.L.P. are complete and correct and present fairly the
financial condition of the Borrower and its Subsidiaries as of such dates.
Additionally, the company-prepared pro forma balance sheets and the six-year
projections have been prepared in good faith based upon reasonable assumptions.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein).
SECTION 3.2 NO CHANGE.
Since December 31, 1998 (and after delivery of annual audited financial
statements in accordance Section 5.1(a), from the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Credit Parties (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the requisite power and authority and the legal right to own and operate all its
material property, to lease the material property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified to
conduct business and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to so qualify
or be in good standing could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS; NO
CONSENTS.
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization
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of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained) or with the validity or enforceability of any Credit Document against
the Borrower or the other Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document to which it is a party has been duly executed
and delivered on behalf of the Borrower or any other Credit Party, as the case
may be. Each Credit Document to which it is a party constitutes a legal, valid
and binding obligation of the Borrower and each other Credit Party, as the case
may be, enforceable against the Borrower or such other Credit Party, as the case
may be, in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law, any organizational document or any Contractual
Obligation of any Credit Party (except those as to which waivers or consents
have been obtained), and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any Requirement of Law or Contractual Obligation other than the
Liens arising under or contemplated in connection with the Credit Documents.
Neither the Borrower nor any Credit Party is in default under or with respect to
any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
Except as set forth in Schedule 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against the Borrower or
any other Credit Party or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.7 INVESTMENT COMPANY ACT.
Neither the Borrower nor any Credit Party is an "investment company", or
a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
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SECTION 3.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Credit
Parties taken as a group do not own "margin stock" except as identified in the
financial statements referred to in Section 3.1 and the aggregate value of all
"margin stock" owned by the Credit Parties taken as a group does not exceed 25%
of the value of their assets.
SECTION 3.9 ERISA.
Except as set forth in Schedule 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.10 ENVIRONMENTAL MATTERS.
Except as set forth on Schedule 3.10 which, in the aggregate, could not
be reasonably expected to have a Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by the
Credit Parties (the "Properties") do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute a
violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) The Properties and all operations of the Borrower and the other
Credit Parties at the Properties are in compliance, and have in the last
five years been in compliance, in all material respects with all
applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect
to the Properties or the business operated by the Borrower and the other
Credit Parties (the "Business").
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(c) Neither the Borrower nor any other Credit Party has received any
written or actual notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Properties
or the Business, nor does the Borrower nor any other Credit Party 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 in violation of, or in a manner or to a
location which could give rise to liability under any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to liability under, any
applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower or any other Credit
Party, threatened, under any Environmental Law to which the Borrower, or
any other Credit Party, is or will be named as a party with respect to
the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower, or any other Credit Party, in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws.
SECTION 3.11 USE OF PROCEEDS.
The proceeds of the Loans hereunder shall be used solely by the Borrower
to (i) finance the Acquisition including the fees and expenses incurred in
connection therewith, (ii) provide for working capital, capital expenditures and
other general corporate purposes, (iii) refinance existing indebtedness, and
(iv) finance acquisitions as permitted by the terms hereof. The Letters of
Credit shall be used only as referred to in Section 2.3(a) and for or in
connection with appeal bonds, reimbursement obligations arising in connection
with surety and reclamation bonds, reinsurance, domestic or international trade
transactions and obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in the ordinary course
of business.
SECTION 3.12 SUBSIDIARIES.
Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties. Information on the attached Schedule
includes state of incorporation; the number of shares of each class of Capital
Stock or other equity interests outstanding; the number and
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percentage of outstanding shares of each class of stock; and the number
and effect, if exercised, of all outstanding options, warrants, rights of
conversion or purchase and similar rights. The outstanding Capital Stock and
other equity interests of all such Subsidiaries are validly issued, fully paid
and non-assessable and are owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).
SECTION 3.13 OWNERSHIP.
Each of the Credit Parties is the owner of, and has sufficient and legal
title to, all of its respective assets, except as may be permitted pursuant to
Section 6.14 hereof, and none of such assets is subject to any Lien other than
Permitted Liens.
SECTION 3.14 INDEBTEDNESS.
Except as otherwise permitted under Section 6.1, the Credit Parties have
no Indebtedness.
SECTION 3.15 TAXES.
Each of the Credit Parties has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP.
Neither the Borrower nor any other Credit Party is aware as of the Closing Date
of any proposed tax assessments against it or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
SECTION 3.16 INTELLECTUAL PROPERTY.
Each of the Credit Parties owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes
("Intellectual Property") necessary for each of them to conduct its business as
currently conducted. Set forth on Schedule 3.16 is a list of all registered
Intellectual Property and all other material unregistered Intellectual Property
owned by each of the Credit Parties or that any Credit Party has the right to
use pursuant to a written license. Except as provided on Schedule 3.16, no claim
has been asserted and is pending by any Person challenging or questioning the
use of any such Intellectual Property or the validity or effectiveness of any
such Intellectual Property, nor does any Credit Party know of any such claim,
and, to the knowledge of the Credit Parties, the use of such Intellectual
Property by such Credit Party does not infringe on the rights of any Person,
except for such claims and infringements that in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Schedule 3.16 may be
updated from time to time by the Borrower to include new Intellectual Property
by giving written notice thereof to the Administrative Agent.
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SECTION 3.17 SOLVENCY.
After giving effect to its rights and obligations hereunder (including
rights of contribution), the fair saleable value of each Credit Party's assets,
measured on a going concern basis, exceeds all probable liabilities, including
those to be incurred pursuant to this Agreement. None of the Credit Parties (a)
has unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the transactions contemplated by this Agreement, debts beyond
its ability to pay such debts as they become due.
SECTION 3.18 INVESTMENTS.
All Investments of each of the Credit Parties are Permitted Investments.
SECTION 3.19 SECURITY DOCUMENTS.
The Security Documents create valid security interests in, and Liens on,
the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements in favor of First Union, as Agent for the Lenders) perfected security
interests and Liens, prior to all other Liens other than Permitted Liens.
SECTION 3.20 LOCATION OF COLLATERAL.
Set forth on Schedule 3.20(a) is a list of the Properties of the Credit
Parties with street address, county and state where located. Set forth on
Schedule 3.20(b) is a list of all locations where any tangible personal property
of the Credit Parties is located, including county and state where located. Set
forth on Schedule 3.20(c) is the chief executive office and principal place of
business of each of the Credit Parties. Schedules 3.20(a), 3.20(b) and 3.20(c)
may be updated from time to time by the Borrower to include new properties or
locations by giving written notice thereof to the Administrative Agent.
SECTION 3.21 NO BURDENSOME RESTRICTIONS.
Neither the Borrower nor any other Credit Party is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.22 BROKERS' FEES.
Neither the Borrower nor any other Credit Party has any obligation to any
Person in respect of any finder's, broker's, investment banking or other similar
fee in connection with any of the transactions contemplated under the Credit
Documents other than the closing and other fees payable pursuant to this
Agreement.
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SECTION 3.23 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any other Credit Party as of the
Closing Date, other than as set forth in Schedule 3.23 hereto, and neither the
Borrower nor any other Credit Party (i) has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years, other
than as set forth in Schedule 3.23 hereto or (ii) has knowledge of any potential
or pending strike, walkout or work stoppage.
SECTION 3.24 ACCURACY AND COMPLETENESS OF INFORMATION.
All written information furnished by the Borrower or any other Credit
Party to the Administrative Agent or any Lender for purposes of or in connection
with this Agreement or any other Credit Document, or any transaction
contemplated hereby or thereby, is or will be true and accurate in all material
respects and not incomplete by omitting to state any material fact necessary to
make such information not misleading. There is no fact now known to any Credit
Party which has, or could reasonably be expected to have, a Material Adverse
Effect which fact has not been set forth herein, in the financial statements of
the Credit Parties furnished to the Administrative Agent and/or the Lenders, or
in any certificate, opinion or other written statement made or furnished by the
Borrower to the Administrative Agent and/or the Lenders.
SECTION 3.25 YEAR 2000 ISSUE.
Any reprogramming and related testing required to permit the proper
functioning of the computer systems of the Borrower and any other Credit Party
in and following the year 2000 have been completed in all material respects as
of the date hereof (that is, the Borrower and the other Credit Parties will be
"Year 2000 Compliant"), and the cost to the Borrower and its Subsidiaries of
such reprogramming and testing will not result in a Default or Event of Default
or a Material Adverse Effect. Except for such reprogramming referred to in the
preceding sentence as may be necessary, the computer and management information
systems of the Borrower are and, with ordinary course upgrading and maintenance,
will continue for the term of this Agreement to be, adequate for the conduct of
its business as permitted hereunder.
SECTION 3.26 INSURANCE.
The present insurance coverage of the Credit Parties is outlined as to
carrier, policy number, expiration date, type and amount on Schedule 3.26(b).
The Credit Parties maintain insurance in accordance with past practices against
such risks and in such amounts as historically in effect.
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ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL LOANS.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Loans on the Closing Date is subject to, the
satisfaction of the following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall have
received (i) counterparts of this Agreement, executed by a duly
authorized officer of each party hereto, (ii) duly executed Notes for the
account of each Lender, (iii) counterparts of the Security Agreement, and
the Pledge Agreement, and the Mortgage Instruments in each case
conforming to the requirements of this Agreement and executed by duly
authorized officers of the Credit Parties, and (iv) all other Credit
Documents, each in form and substance reasonably acceptable to the
Administrative Agent and the Arranger in their reasonable discretion.
(b) Authority Documents. The Administrative Agent shall have
received the following:
(i) Organizational Documents. Copies of the limited liability
company operating agreement, articles of incorporation or other
organizational documents, as applicable, of each Credit Party
certified to be true and complete as of a recent date by the
appropriate governmental authority of the state of its organization.
(ii) Resolutions. Copies of resolutions of the managing
member (or, if required, of all members) or board of directors or
advisors of each Credit Party approving and adopting the Credit
Documents, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by an officer of such
Credit Party as of the Closing Date to be true and correct and in
force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of each Credit Party, if
applicable, certified by an officer of such Credit Party as of the
Closing Date to be true and correct and in force and effect as of
such date.
(iv) Good Standing. Copies of (i) certificates of good
standing, existence or its equivalent with respect to the each
Credit Party certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and each
other state in which the failure to so qualify and be in good
standing could reasonably be expected to have a Material Adverse
Effect on
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the business or operations of the Credit Parties in such
state and (ii) a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) Legal Opinions of Counsel. The Administrative Agent shall have
received an opinion of (i) Xxxxxxxx & Xxxxx, counsel for the Credit
Parties, (ii) Xxxxx & Xxxxxxxxx, Ohio counsel to the Credit Parties,
(iii) Xxxxx, Xxxxxxx & Xxxxxxx, Pennsylvania counsel to the Credit
Parties and (iv) Greenberg, Traurig, Florida counsel to the Credit
Parties, each of the foregoing to be dated as of the Closing Date and
addressed to the Administrative Agent and the Lenders, in form and
substance acceptable to the Administrative Agent.
(d) Personal Property Collateral. The Administrative Agent shall
have received, in form and substance satisfactory to the Administrative
Agent:
(i) searches of Uniform Commercial Code ("UCC") filings in
the jurisdiction of the chief executive office of each Credit Party
and each jurisdiction where any Collateral is located or where a
filing would need to be made in order to perfect the Administrative
Agent's security interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens
exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Administrative
Agent's sole discretion, to perfect the Administrative Agent's
security interest in the Collateral;
(iii) duly executed consents as are necessary, in
the Administrative Agent's sole discretion, to perfect the
Lenders' security interest in the Collateral; and
(iv) in the case of any personal property
Collateral located at premises leased by a Credit Party,
such estoppel letters, consents and waivers from the
landlords on such real property as may be required by the
Administrative Agent.
(e) Real Property Collateral. The Agent shall have
received, in form and substance satisfactory to the Administrative
Agent:
(i) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt (each, as the same may be amended, modified,
restated or supplemented from time to time, a "Mortgage Instrument"
and collectively the "Mortgage Instruments") encumbering the fee
interest in the properties listed in
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Schedule 3.20(a) as properties owned by the Credit Parties
(each a "Mortgaged Property" and collectively the "Mortgaged
Properties");
(ii) a title report obtained by the Credit Parties in respect
of each of the Mortgaged Properties;
(iii) With respect to each Mortgaged Property, an ALTA
mortgagee title insurance policies issued by Chicago Title Insurance
Company (the "Mortgage Policies"), in amounts not less than the
respective amounts designated in Schedule 3.20(a) with respect to
any particular Mortgaged Property, assuring the Agent that each of
the Mortgage Instruments creates a valid and enforceable first
priority mortgage lien on the applicable Mortgaged Property, free
and clear of all defects and encumbrances except Permitted Liens,
which Mortgage Policies shall be in form and substance reasonably
satisfactory to the Agent and shall provide for affirmative
insurance and such reinsurance as the Agent may reasonably request,
all of the foregoing in form and substance reasonably satisfactory
to the Agent;
(iv) evidence as to (A) whether any Mortgaged Property is in
an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards (a "Flood Hazard
Property") and (B) if any Mortgaged Property is a Flood Hazard
Property, (1) whether the community in which such Mortgaged Property
is located is participating in the National Flood Insurance Program,
(2) the applicable Credit Party's written acknowledgment of receipt
of written notification from the Agent (a) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (b) as to whether
the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3) copies
of insurance policies or certificates of insurance of the Borrowers
and their Subsidiaries evidencing flood insurance reasonably
satisfactory to the Agent and naming the Agent as sole loss payee on
behalf of the Lenders; and
(v) maps or plats of an as-built survey of the sites of the
Mortgaged Properties certified to the Agent and the Title Insurance
Company in a manner reasonably satisfactory to them, dated a date
satisfactory to each of the Agent and the Title Insurance Company by
an independent professional licensed land surveyor reasonably
satisfactory to each of the Agent and the Title Insurance Company,
which maps or plats and the surveys on which they are based shall be
sufficient to delete any standard printed survey exception contained
in the applicable title policy and be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and
the American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed
and shown on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the
lines of streets abutting the sites and
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width thereof; (C) all access and other easements appurtenant
to the sites necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the site, whether recorded, apparent
from a physical inspection of the sites or otherwise known to the
surveyor; (E) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (F) if the
site is described as being on a filed map, a legend relating the
survey to said map;
(f) Liability and Casualty Insurance. The Administrative Agent shall
have received copies of insurance policies or certificates of insurance
evidencing liability and casualty insurance meeting the requirements set
forth herein or in the Security Documents. The Administrative Agent shall
be named as loss payee and additional insured on all such insurance
policies for the benefit of the Lenders.
(g) Fees. The Administrative Agent shall have received all fees, if
any, owing pursuant to the Fee Letter and Section 2.4.
(h) Litigation. There shall not exist any pending litigation,
investigation, injunction, order or claim affecting or relating to the
Borrower, any other Credit Party, this Agreement or the other Credit
Documents that in the reasonable judgment of the Administrative Agent
could materially adversely affect on such Person, this Agreement or the
other Credit Documents, that has not been settled, dismissed, vacated,
discharged or terminated prior to the Closing Date.
(i) Solvency Evidence. The Administrative Agent shall have received
an officer's certificate for each Credit Party prepared by the chief
financial officer of each such Credit Party as to the financial
condition, solvency and related matters of each such Credit Party, in
each case after giving effect to the initial borrowings under the Credit
Documents, in substantially the form of Schedule 4.1(i) hereto.
(j) Account Designation Letter. The Administrative Agent shall have
received the executed Account Designation Letter in the form of Schedule
1.1(a) hereto.
(k) Ownership Structure. The capital and ownership structure of the
Credit Parties (after giving effect to the transactions contemplated
hereby) shall be as described in Schedule 3.12. The Administrative Agent
shall be satisfied with management structure, legal structure, voting
control, liquidity, total leverage and total capitalization of the
Borrower as of the Closing Date.
(l) PIK Subordinated Debt. The Borrower shall have received gross
proceeds from the issuance of the PIK Subordinated Debt in an amount not
less than $10,000,000.
(m) Consents. The Administrative Agent shall have received evidence
that all governmental, shareholder and material third party consents
(including the Serta Consents) and approvals necessary in connection with
the financings and other transactions contemplated hereby have been
obtained and all applicable waiting periods
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have expired without any action being taken by any authority or
third party that could restrain, prevent or impose any material adverse
conditions on such transactions or that could seek or threaten any of the
foregoing.
(n) Compliance with Laws. The financings and other transactions
contemplated hereby shall be in compliance with all applicable laws and
regulations (including all applicable securities and banking laws, rules
and regulations).
(o) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to any Credit Party or any of its Subsidiaries.
(p) Material Adverse Effect. No material adverse change shall have
occurred since December 31, 1998 in the business, properties, operations,
conditions (financial or otherwise) or prospects of the Credit Parties
taken as a whole.
(q) Financial Statements. The Administrative Agent shall have
received copies of all of the financial statements referred to in Section
3.1, each in form and substance satisfactory to it.
(r) Due Diligence. The Administrative Agent and the Arranger shall
have completed, in form and scope satisfactory thereto, their due
diligence on the Credit Parties.
(s) Environmental Reports. The Administrative Agent shall have
received satisfactory environmental reviews of all real property owned by
the Credit Parties.
(t) Termination of Existing Indebtedness. All existing Indebtedness
for borrowed money of the Credit Parties (other than the Indebtedness
listed on Schedule 6.1(b)) shall have been repaid in full and all Liens
relating thereto terminated.
(u) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates executed by a responsible officer
of the Borrower as of the Closing Date stating that (i) no action, suit,
investigation or proceeding is pending or, to the knowledge of any Credit
Party, threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party or any
transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a
Material Adverse Effect and (ii) immediately after giving effect to this
Credit Agreement, the other Credit Documents and all the transactions
contemplated therein to occur on such date, (A) no Default or Event of
Default exists, (B) all representations and warranties contained herein
and in the other Credit Documents are true and correct in all material
respects, and (C) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 5.9.
(v) Acquisition and Acquisition Documents. The Acquisition shall
have been consummated in accordance with the terms of the documentation
related thereto. There shall not have been any material modification,
amendment, supplement or waiver to the
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Acquisition Documents without the prior written consent of the
Administrative Agent, including, but not limited to, any modification,
amendment, supplement or waiver relating to the amount or type of
consideration to be paid in connection with the Acquisition and the
contents of all disclosure schedules and exhibits, and the Acquisition
shall have been consummated in accordance with the terms of the
Acquisition Documents (without waiver of any material conditions
precedent to the obligations of the buyer thereunder). The Administrative
Agent shall have received final copies of the Acquisition Documents,
together with all exhibits and schedules thereto, certified by an officer
of the Borrower.
(w) Financial Covenant Compliance Certificate. The Administrative
Agent shall have received a certificate in substantially the form of
Schedule 4.1(w) executed by a responsible officer of the Borrower as of
the Closing Date demonstrating pro forma compliance with (i) the
financial covenants set forth in Section 5.9 (a), (b) and (c) as if the
Acquisition had occurred on the first day of the four fiscal quarter
period most recently ended prior to the Closing Date and (ii) the
indebtedness incurrence tests set forth in Section 1008 of the Indenture
and Section 6.1(b) of the Subordinated Credit Agreement after giving
effect to the incurrence of the Credit Party Obligations.
(x) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.
SECTION 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
on the date of making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Credit Parties herein, in the Security Documents
or which are contained in any certificate furnished at any time under or
in connection herewith and taking into account any amendments to the
Schedules or Exhibits hereto, except as such relate explicitly to an
earlier date, shall be true and correct in all material respects on and
as of the date of such Extension of Credit as if made on and as of such
date.
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Extension of Credit to be made on such date unless such Default or
Event of Default shall have been waived in accordance with this
Agreement.
(c) Compliance with Commitments. Immediately after giving effect to
the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of the aggregate principal amount of
outstanding Revolving Loans plus outstanding LOC Obligations shall not
exceed the Revolving Committed Amount and (ii) the outstanding LOC
Obligations shall not exceed the LOC Committed Amount.
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(d) Additional Conditions to Revolving Loans. If such Loan is made
pursuant to Section 2.1, all conditions set forth in such Section shall
have been satisfied.
(e) Additional Conditions to Term Loans. If such Loan is made
pursuant to Section 2.2, all conditions set forth in such Section shall
have been satisfied.
(f) Additional Conditions to Letters of Credit. If such Extension of
Credit is made pursuant to Section 2.3, all conditions set fort in such
Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (f) of this
Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts then due and owing to the Administrative Agent or any Lender hereunder,
are paid in full, the Credit Parties shall, and shall cause each of their
Subsidiaries (other than in the case of Sections 5.1, 5.2 or 5.7 hereof), to:
SECTION 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in any
event within ninety (90) days after the end of each fiscal year of the
Parent, a copy of the consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries and within one hundred twenty
(120) days after the end of each fiscal year of the Parent, a copy of the
consolidated and consolidating balance sheet of the Parent and its
consolidated Subsidiaries as at the end of such fiscal year and with
respect to each of the foregoing, the related consolidated and
consolidating statements of income and retained earnings and of cash
flows of the Borrower and its consolidated Subsidiaries and for the
Parent and its consolidated Subsidiaries for such year, audited by a firm
of independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders, setting forth in
each case in comparative form the figures for the previous year, reported
on without a "going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification;
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(b) Quarterly Financial Statements. As soon as available and in any
event within forty-five (45) days after the end of each of the fiscal
quarters of the Parent, a company-prepared consolidated balance sheet and
a company-prepared consolidating balance sheet of the Parent and its
consolidated Subsidiaries and of the Borrower and its consolidated
Subsidiaries as at the end of such period and related company-prepared
statements of income and retained earnings and of cash flows for the
Parent and its consolidated subsidiaries and for the Borrower and its
consolidated Subsidiaries for such quarterly period and for the portion
of the fiscal year ending with such period, in each case setting forth in
comparative form consolidated and consolidating figures for the
corresponding period or periods of the preceding fiscal year (subject to
normal recurring year-end audit adjustments); and
(c) Monthly Financial Statements. As soon as available and in any
event within thirty (30) days after the end of each month (other than at
the end of a fiscal quarter, in which case 45 days after the end
thereof), a company-prepared consolidated balance sheet of the Parent and
its consolidated Subsidiaries and for the Borrower and its consolidated
Subsidiaries as at the end of such period and related company-prepared
statements of income and retained earnings and of cash flows for the
Parent and its consolidated Subsidiaries and for the Borrower and its
consolidated Subsidiaries for such monthly period and for the portion of
the fiscal year ending with such period, in each case setting forth in
comparative form consolidated and consolidating figures for the
corresponding period or periods of the preceding fiscal year (subject to
normal recurring year-end audit adjustments and the absence of
footnotes);
(d) Annual Budget Plan. As soon as available, but in any event
within thirty (30) days after the end of each fiscal year, a copy of the
detailed annual budget or plan of the Borrower for the next fiscal year
on a month-by-month basis, in form and detail reasonably acceptable to
the Administrative Agent and the Required Lenders, together with a
summary of the material assumptions made in the preparation of such
annual budget or plan;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments and, with respect to the monthly financial
statements, the absence of footnotes) and to be prepared in reasonable detail
and, in the case of the annual and quarterly financial statements provided in
accordance with subsections (a) and (b) above, in accordance with GAAP applied
consistently throughout the periods reflected therein and further accompanied by
a description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.
SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
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(a) concurrently with the delivery of the financial statements of
the Parent referred to in Section 5.1(a) above, a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a), 5.1(b) and 5.1(c) above, a certificate of
a Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, each of the Credit Parties during such period
observed or performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects every condition,
contained in this Agreement to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
such certificate shall include the calculations in reasonable detail
required to indicate compliance with Section 5.9 as of the last day of
such period;
(c) promptly after the same are sent, copies of all reports (other
than those otherwise provided pursuant to Section 5.1 and those which are
of a promotional nature) and other financial information which the
Borrower sends to its members, and within thirty days after the same are
filed, copies of all financial statements and non-confidential reports
which the Borrower may make to, or file with the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal year of the
Borrower, a certificate containing information regarding the amount of
all Asset Dispositions, Debt Issuances, and Equity Issuances that were
made during the prior fiscal year and a calculation of Excess Cash Flow
and amounts received in connection with any Recovery Event during the
prior fiscal year;
(e) promptly upon receipt thereof, a copy of any other report or
"management letter" submitted by independent accountants to the Borrower
or any other Credit Party in connection with any annual, interim or
special audit of the books of such Person;
(f) within ninety (90) days after the end of each fiscal year of the
Borrower a certificate signed by the chief financial officer of each
Borrower that summarizes the insurance policies, including, without
limitation, key-man life insurance, if requested by the Administrative
Agent, carried by the Borrower and each Subsidiary of the Borrower (such
certificate to be in form and substance reasonably satisfactory to
Administrative Agent), and written notification 30 days prior to any
cancellation or material change of any such insurance by the Borrower or
any Subsidiary, as the case may be, within 10 days after receipt of any
notice (whether formal or informal) of cancellation, reduction in
coverage, shortening of policy period or material adverse change by any
of such Person's insurers;
(g) within ten (10) Business Days after each anniversary of the
Closing Date, a complete list of the officers and directors (or members
of the board of advisors or other
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similar governing body) of the Borrower, and within fifteen (15)
Business Days after any change in the information provided pursuant to
the foregoing clause, written notice of such change;
(h) within thirty (30) days after the filing thereof, copies of all
income tax returns filed by the Parent with any Federal or state taxing
authority and within thirty (30) days after receipt thereof by the
Borrower, evidence of payment of property taxes by the Borrower; and
(i) promptly, such additional financial and other information
regarding the business, properties, prospects or financial condition of
the Borrower as the Administrative Agent, on behalf of any Lender, may
from time to time reasonably request.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry and
historical company practice (subject, where applicable, to specified grace
periods) all its material obligations (including, without limitation, all taxes)
of whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except when
the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or any other Credit Party, as the case may be.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now conducted
by it on the Closing Date and preserve, renew and keep in full force and effect
its existence as a corporation or limited liability company, as applicable, and
take all reasonable action to maintain all rights, privileges and franchises
material to its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Maintain all material property in good working order and
condition (ordinary wear and tear and obsolescence excepted) and in
accordance with past practices;
(b) (i) Maintain such insurance as may be required by law, by the
Security Documents or otherwise by the Required Lenders, all to such
extent and against such hazards and liabilities, as is maintained by such
Person on the Closing Date, (ii) maintain a sufficient amount of
insurance so that no Credit Party and no Subsidiary of any Credit Party
nor the Administrative Agent or any Lender will be considered a
co-insurer or co-
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insurers, (iii) with respect to each liability insurance policy, (A)
cause such policy to provide, pursuant to endorsements in form and
substance reasonably satisfactory to the Administrative Agent, that the
Administrative Agent and "Lenders" are identified as additional insureds
and (B) notify the Administrative Agent within 5 days after obtaining any
new policy, or increasing coverage under any existing policy, describing
in detail in such notice any such new policy or increase, and (iv) with
respect to each physical damage or casualty policy and each life
insurance policy, (A) cause such policy to provide, pursuant to
endorsements in form and substance reasonably satisfactory to the
Administrative Agent, that Administrative Agent is named as a loss payee
as to personal property and a mortgagee as to real property, (B) cause
such policy to provide, pursuant to endorsements in form and substance
satisfactory to the Administrative Agent, that the insurance shall not be
invalidated as against the Administrative Agent or any Lender by any
action or inaction of such Person other than the Administrative Agent or
such Lender, regardless of any breach or violation of any warranty,
declaration or condition contained in such policy, (C) as against the
Administrative Agent and Lenders, the insurers shall waive any rights of
subrogation to the extent that the named insured has waived such rights
(and each Credit Party hereby irrevocably and unconditionally waives any
right of subrogation against the Administrative Agent and Lenders, except
for claims arising out of the gross negligence or willful misconduct of
the Administrative Agent or Lenders), and (D) notify the Administrative
Agent within 5 days of obtaining any new policy or increasing coverage
under any existing policy, describing in detail in such notice any such
new policy or increase.
(c) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party
shall promptly give written notice thereof to the Administrative Agent
generally describing the nature and extent of such damage or destruction.
In case of any loss, damage to or destruction of the Collateral of any
Credit Party or any part thereof, such Credit Party, whether or not the
insurance proceeds, if any, received on account of such damage or
destruction shall be sufficient for that purpose, at such Credit Party's
cost and expense, will promptly repair or replace the Collateral (or
similar assets or property in replacement thereof) of such Credit Party
so lost, damaged or destroyed.
SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account containing entries correct in
all material respects and in conformity with GAAP and all material Requirements
of Law concerning all dealings and transactions in relation to its businesses
and activities, and permit, during regular business hours and upon reasonable
notice by the Administrative Agent or any Lender, the Administrative Agent or
any Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records (other than materials protected by
the attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the Credit
Parties with officers and employees of the Credit Parties and with its
independent certified public accountants; provided, however, that so long as no
Default or Event of Default
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shall have occurred or be continuing, there shall be not more than one visit to
or inspection of the properties of the Credit Parties per fiscal quarter of the
Borrower.
SECTION 5.7 NOTICES.
Give notice in writing to the Administrative Agent (which shall promptly
transmit such notice to each Lender) of:
(a) promptly, but in any event within two (2) Business Days after
the Borrower knows or has reason to know thereof, the occurrence of any
Default or Event of Default;
(b) promptly, any default or event of default under any Contractual
Obligation of any Credit Party which could reasonably be expected to have
a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
(including, without limitation, any governmental or environmental
proceeding) known to the Borrower, affecting any Credit Party which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect;
(d) as soon as possible and in any event within thirty (30) days
after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC (other than a Permitted Lien)
or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower
or any Commonly Controlled Entity or any Multiemployer Plan with respect
to the withdrawal from, or the terminating, Reorganization or Insolvency
of, any Plan; and
(e) promptly, any other development or event which could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
SECTION 5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any
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and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except to the extent that
failure to do so could not reasonably be expected to have a Material
Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings or the pendency of such
proceedings could not reasonably be expected to have a Material Adverse
Effect; and
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever
kind or nature known or unknown, contingent or otherwise, arising out of,
or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of
the Borrower or any of its Subsidiaries or the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's
fees, investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing arise
out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this paragraph shall survive
repayment of the Notes and all other amounts payable hereunder.
SECTION 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date, the Credit
Parties shall comply with the following financial covenants:
(a) Leverage Ratio. The Leverage Ratio, as of the last day of each
fiscal quarter occurring during the periods indicated below, shall be
less than or equal to the following:
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Period Ratio
------ -----
Closing Date through and including 6.00 to 1.0
June 30, 2000
July 1, 2000 through and including 5.50 to 1.0
September 30, 2000
October 1, 2000 through and including 5.25 to 1.0
June 30, 2001
July 1, 2001 through and including 4.75 to 1.0
September 30, 2001
October 1, 2001 through and including 4.50 to 1.0
June 30, 2002
July 1, 2002 through and including 4.00 to 1.0
September 30, 2002
October 1, 2002 and thereafter 3.75 to 1.0
(b) Interest Coverage Ratio. The Interest Coverage Ratio, as of the
last day of each fiscal quarter occurring during the periods indicated
below, shall be greater than or equal to the following:
Period Ratio
------ -----
Closing Date through and including 1.80 to 1.0
June 30, 2001
July 1, 2001 through and including 2.00 to 1.0
June 30, 2002
July 1, 2002 through and including 2.25 to 1.0
September 30, 2002
October 1, 2002 through and including 2.50 to 1.0
September 30, 2003
October 1, 2003 and thereafter 2.75 to 1.0
(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as
of the last day of each fiscal quarter occurring during the periods set
forth below, shall be greater than or equal to the following:
Period Ratio
------ -----
Closing Date through and including 1.10 to 1.0
September 30, 2001
October 1, 2001 through and including 1.15 to 1.0
September 30, 2002
October 1, 2001 and thereafter 1.20 to 1.0
(d) Consolidated Net Worth. Consolidated Net Worth as of the last
day of each month shall be greater than or equal to (i) 80% of the
Consolidated Net Worth as of
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the Closing Date, plus, (ii) 50% of positive Consolidated Net Income
following the Closing Date, plus (iii) 100% of Equity Issuances on or
following the Closing Date.
SECTION 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.
The Credit Parties will cause each of their Domestic Subsidiaries,
whether newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement. The guaranty
obligations of any such Additional Credit Party shall be secured by, among other
things, the Collateral of the Additional Credit Party.
SECTION 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
property (including, without limitation, all ERISA laws and regulations) except
to the extent that noncompliance with any such law, rule, regulation, order or
restriction could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.12 PLEDGED ASSETS.
(a) Each Credit Party will be, and will cause each of its
Subsidiaries to be, subject at all times to a first priority, perfected
Lien with respect to all of such Credit Party's property and assets
(subject in each case to Permitted Liens and excluding assets in the
nature of stock of Serta Inc. to the extent the same is prohibited from
being pledged or assigned) in favor of the Administrative Agent pursuant
to the terms and conditions of the Security Documents or such other
security documents as the Administrative Agent shall reasonably request.
Each Credit Party shall, and shall cause each of its Subsidiaries to,
adhere to the covenants regarding the location of personal property as
set forth in the Security Documents.
(b) Each Credit Party shall, and shall cause each of its
Subsidiaries to, take such action at its own expense as requested by the
Agent (including, without limitation, any of the actions described in
Section 4.1(d) or (e) hereof) to ensure that the Agent has a first
priority perfected Lien to secure the Credit Party Obligations in (i) all
personal property of the Credit Parties located in the United States,
(ii) all real property of the Credit Parties located in the United States
and (iii) to the extent deemed to be material by the Agent or the
Required Lenders in its or their sole reasonable discretion, all other
personal and real property of the Credit Parties, subject in each case
only to Permitted Liens.
SECTION 5.13 YEAR 2000 COMPLIANCE.
Each Credit Party will promptly notify the Administrative Agent in the
event any Credit Party discovers or determines that any computer application
(including those of its key suppliers and vendors) that is material to its or
any of its Subsidiaries' business and operations will not be
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Year 2000 Compliant, except to the extent that such failure could not reasonably
be expected to have a Material Adverse Effect.
SECTION 5.14 FURTHER ASSURANCES.
(a) As soon as practicable, but in any event within 30 days following the
Closing Date, the Credit Parties shall have obtained a solvency opinion from
Valuation Research in favor of the Administrative Agent and the Lenders in form
and substance satisfactory to the Administrative Agent and the Lenders.
(b) As soon as practicable, but in any event within 30 days following the
Closing Date, the Credit Parties shall have used their best efforts on a
commercially reasonable basis to obtain consent to the assignment of a security
interest in favor of the Administrative Agent under the Program Product License
Agreement dated as of December 15, 1996 by and between OHM Systems, Inc. and the
Borrower.
ARTICLE VI
NEGATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts then due and owing to the Administrative Agent or any Lender hereunder,
are paid in full that:
SECTION 6.1 INDEBTEDNESS.
The Credit Parties will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and the
other Credit Documents;
(b) Indebtedness of the Credit Parties existing as of or incurred on
the Closing Date and described on Schedule 6.1(b) and renewals,
refinancings or extensions thereof in a principal amount not in excess of
that outstanding as of the date of such renewal, refinancing or
extension;
(c) Indebtedness of the Borrower and its Subsidiaries incurred after
the Closing Date consisting of Capital Leases or Indebtedness incurred to
provide all or a portion of the purchase price or cost of construction of
an asset provided that (i) such Indebtedness when incurred shall not
exceed the purchase price or cost of construction of such asset; (ii) no
such Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at
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the time of such refinancing; and (iii) the total amount of all such
Indebtedness shall not exceed $1,500,000 at any time outstanding;
(d) Unsecured intercompany Indebtedness among the Credit Parties,
provided that any such Indebtedness shall be fully subordinated to the
Credit Party Obligations hereunder on terms reasonably satisfactory to
the Administrative Agent;
(e) Indebtedness and obligations owing under Hedging Agreements
relating to the Loans hereunder and other Hedging Agreements entered into
in order to manage existing or anticipated interest rate, exchange rate
or commodity price risks and not for speculative purposes;
(f) Indebtedness and obligations of Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise generally (but not under standby, direct pay or other letters
of credit except for the Letters of Credit hereunder);
(g) Indebtedness of the Credit Parties in respect of the
Subordinated Notes in an aggregate amount not to exceed $115,000,000;
(h) Indebtedness in respect of judgment liens not resulting in an
Event of Default pursuant to Section 7.1(f);
(i) Indebtedness in respect of trade payables incurred in the
ordinary course of business;
(j) Unsecured Indebtedness owing in respect of the performance bonus
in favor of Xxxxx Xxxxxx pursuant to Section 2(c)(ii) of that certain
Employment Agreement dated as of May 18, 1999 by and among Star Bedding
Products Limited, Xxxxx Xxxxxx and the Borrower;
(k) Indebtedness in respect of the PIK Subordinated Debt; and
(l) other Indebtedness of the Borrower and its Subsidiaries which
does not exceed $1,500,000 in the aggregate at any time outstanding.
SECTION 6.2 LIENS.
The Credit Parties will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
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SECTION 6.3 GUARANTY OBLIGATIONS.
The Credit Parties will not, nor will they permit any Subsidiary to,
enter into or otherwise become or be liable in respect of any Guaranty
Obligations (excluding specifically therefrom endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) other
than (i) those in favor of the Lenders in connection herewith and (ii) Guaranty
Obligations of Indebtedness permitted under Section 6.1(g).
SECTION 6.4 NATURE OF BUSINESS.
The Credit Parties will not, nor will they permit any Subsidiary to,
alter the character of its business in any material respect from that conducted
as of the Closing Date other than logical extensions thereof.
SECTION 6.5 CONSOLIDATION, MERGER, SALE OF ASSETS, PERMITTED
ACQUISITIONS, ETC.
The Credit Parties will not, nor will they permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease or otherwise voluntarily dispose of its property or assets or agree
to do so at a future time except the following, without duplication,
shall be expressly permitted:
(i) Specified Sales; and
(ii) the sale, transfer, lease or other disposition of
property or assets (a) to an unrelated party not in the ordinary
course of business (other than Specified Sales), where and to the
extent that they are the result of a Casualty Event or (b) the sale,
lease, transfer or other disposition of machinery, parts and
equipment no longer used or useful in the conduct of the business of
such Credit Party or any of its Subsidiaries, as appropriate, in its
reasonable discretion, so long as and the net proceeds therefrom are
used to repair, replace or relocate damaged property or to purchase
or otherwise acquire new assets or property;
(iii) the sale, lease or transfer of property or assets (at
fair value) between the Borrower and any Guarantor;
(iv) the sale, lease or transfer of property or assets (at
fair value) from a Credit Party other than the Borrower to another
Credit Party; and
(v) the sale, lease or transfer of property or assets not to
exceed $100,000 in the aggregate in any fiscal year;
provided, that in each case at least 75% of the consideration received
therefor by any Credit Party is in the form of cash or Cash Equivalents;
provided, further, that with respect to sales of assets permitted
hereunder only, the Administrative Agent shall,
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without the consent of the Required Lenders, release its Liens relating
to the particular assets sold;
(b) enter into any transaction of merger or consolidation, except
for the merger or consolidation of a Credit Party with and into another
Credit Party, provided that if the Borrower is a party thereto, the
Borrower will be the surviving corporation; and
(c) enter into any transaction or series of transactions for the
purposes of acquiring all or a substantial portion of the assets,
property and/or Capital Stock of any Person other than Permitted
Acquisitions.
SECTION 6.6 ADVANCES, INVESTMENTS AND LOANS.
The Credit Parties will not, nor will they permit any Subsidiary to, lend
money or extend credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person except for Permitted Investments.
SECTION 6.7 TRANSACTIONS WITH AFFILIATES.
Except (i) with respect to the agreements listed on Schedule 6.7 as such
are in existence on the Closing Date and (ii) as permitted in subsection (iv) of
the definition of Permitted Investments, the Credit Parties will not, nor will
they permit any Subsidiary to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than on terms and conditions
substantially as favorable as would be obtainable in a comparable arm's-length
transaction with a Person other than an officer, director, shareholder or
Affiliate.
SECTION 6.8 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
The Credit Parties will not, nor will they permit any Subsidiary to,
create, form or acquire any Subsidiaries, except for Domestic Subsidiaries which
are joined as Additional Credit Parties in accordance with the terms hereof. The
Credit Parties will not sell, transfer, pledge or otherwise dispose of any
Capital Stock or other equity interests in any of their Subsidiaries, nor will
they permit any of their Subsidiaries to issue, sell, transfer, pledge or
otherwise dispose of any of their Capital Stock or other equity interests,
except in a transaction permitted by Section 6.5.
SECTION 6.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
The Credit Parties will not, nor will they permit any of their
Subsidiaries to, change their fiscal year. The Credit Parties will not, nor will
they permit any Subsidiary to, amend, modify or change their limited liability
company operating agreement or articles of incorporation, as applicable (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) in any way that could reasonably be expected to have an
adverse effect on the Lenders without the prior written consent of the Required
Lenders. The Credit Parties will not,
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nor will they permit any of their Subsidiaries to, without the prior written
consent of the Administrative Agent, amend, modify, cancel or terminate or fail
to renew or extend or permit the amendment, modification, cancellation or
termination of any of the Material Contracts, except in the event that such
amendments, modifications, cancellations or terminations could not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.10 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not, nor will they permit any Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions to any Credit Party on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness or other obligation owed to
any Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its properties or assets to any Credit Party, or (e)
act as a Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Agreement
and the other Credit Documents, (ii) applicable law, (iii) any document or
instrument governing Indebtedness incurred pursuant to Section 6.1(c), provided
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (iv) any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien or (v) Indebtedness incurred pursuant to Section 6.1(b) and
6.1(g).
SECTION 6.11 RESTRICTED PAYMENTS.
The Credit Parties will not, nor will they permit any Subsidiary to,
directly or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party other than the Parent (directly or
indirectly through Subsidiaries), and (c) provided that no Default or Event of
Default has occurred and is continuing at such time or would be directly or
indirectly caused as a result thereof and provided that the Borrower is in pro
forma compliance with all provisions of this Agreement before and after giving
effect thereto, the Borrower may pay cash distributions to the Parent (i) to
repurchase membership interests held by management in an aggregate amount not to
exceed $2,500,000 in the aggregate during the term of this Agreement, (ii) to
pay taxes of the Credit Parties to the extent actually incurred and/or due and
payable, (iii) to pay other expenses of the Parent in an aggregate amount not to
exceed $50,000, (iv) to pay cash interest expense as required under the Existing
Seller Debt in an aggregate amount not to exceed 6% of the principal amount of
the Existing Seller Debt per annum; provided that if the Consolidated Fixed
Charge Coverage Ratio (as such term is defined in the Indenture) shall exceed
2.00 to 1.0 as of the end of the immediately preceding fiscal quarter, then the
Borrower may make distributions to the Parent to pay cash interest expense in an
aggregate amount not to exceed 12% of the principal amount of the Existing
Seller Debt per annum, and (v) after May 18, 2002, to make payments owing under
the Permitted Seller Debt.
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SECTION 6.12 PREPAYMENTS OF INDEBTEDNESS, ETC.
Following the Closing Date, the Credit Parties will not, nor will they
permit any Subsidiary to, 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.
SECTION 6.13 SALE LEASEBACKS.
The Credit Parties will not, nor will they permit any Subsidiary 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, personal or mixed), whether now owned or
hereafter acquired in excess of $100,000 in the aggregate on an annual basis,
(a) which any Credit Party or any Subsidiary has sold or transferred or is to
sell or transfer to a Person which is not the Borrower or any Subsidiary or (b)
which any Credit Party or any Subsidiary intends to use for substantially the
same purpose as any other property which has been sold or is to be sold or
transferred by any Credit Party or any Subsidiary to another Person which is not
a Credit Party or a Subsidiary in connection with such lease.
SECTION 6.14 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not, nor will they permit any Subsidiary to,
enter into, assume or become subject to any agreement (other than the Indenture,
the Xxxx Xxxxx Bond Indenture and the PBBC Bond Indenture as in effect on the
Closing Date) prohibiting or otherwise restricting the creation or assumption of
any Lien upon their properties or assets, whether now owned or hereafter
acquired, or requiring the grant of any security for such obligation if security
is given for some other obligation, except (a) pursuant to this Agreement and
the other Credit Documents, (b) pursuant to any document or instrument governing
Indebtedness incurred pursuant to Section 6.1(c), provided that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith and (c) in connection with any Permitted Lien
or any document or instrument governing any Permitted Lien, provided that any
such restriction contained therein relates only to the asset or assets subject
to such Permitted Lien.
SECTION 6.15 CONSOLIDATED CAPITAL EXPENDITURES.
The Parent will not, nor will it permit any Subsidiary to permit
Consolidated Capital Expenditures as of the end of any fiscal year of the Parent
to exceed $6,000,000 for all such persons in the aggregate during such fiscal
year; provided, however, that 50% of any amounts not utilized during any fiscal
year may be carried forward to the immediately following fiscal year only.
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SECTION 6.16 SUBORDINATED DEBT.
No Credit Party will (i) make or offer to make any payments with respect
to any Subordinated Debt, (ii) redeem or offer to redeem any Subordinated Debt,
or (iii) deposit any funds intended to discharge or defease any or all
Subordinated Debt; provided, however, that so long as no Default or Event of
Default shall have occurred or be continuing or would occur on an actual or pro
forma basis as a result thereof, the (i) Borrower may make payments in respect
of interest obligations owing under the Subordinated Notes in an aggregate
amount not to exceed $13,000,000 during any fiscal year, and (ii) the Parent may
make interest payments in respect of the Existing Seller Debt and may make
payments in respect of the Permitted Seller Debt as set forth in Section
6.11(c)(iv) and 6.11(c)(v). No Subordinated Debt may be amended or modified in
any material manner without the prior written consent of the Required Lenders,
it being specifically understood and agreed that no amendment to Article X or
Article XIII of the Indenture shall be made without the prior written consent of
the Required Lenders.
SECTION 6.17 OPERATING LEASES.
The Credit Parties will not, nor will they permit any Subsidiary to,
incur or permit to exist any obligations in respect of operating leases which
require rental payments in excess of $3,500,000 in the aggregate for all such
Persons in the aggregate during any fiscal year.
SECTION 6.18 PARENT HOLDING COMPANY AND SLEEPMASTER FINANCE CORPORATION.
The Parent will not engage in any activities or operations whatsoever
(exclusive of general administrative and other functions required by law) other
than owning 99.9% of the Borrower's membership interests and obligations related
thereto and otherwise permitted hereunder, including, without limitation, being
obligated under the Existing Seller Notes and the Permitted Seller Debt,
entering into this Agreement and the other Credit Documents and performing its
obligations hereunder and thereunder. Sleepmaster Finance Corporation will not
engage in any activities or operations whatsoever other than as set forth in the
Indenture and the Subordinated Notes and entering into this Agreement and the
other Credit Documents and performing its obligations hereunder and thereunder.
SECTION 6.19 SERTA LICENSES.
The Credit Parties will not, nor will they permit any Subsidiary to,
enter into or permit to exist any Serta License not in existence on the Closing
Date, without (i) the express prior written consent of the Required Lenders
(which consent will not be unreasonably withheld), and (ii) the delivery to the
Administrative Agent of a copy of such Serta License, a new Serta Consent
covering such new Serta License, all documentation required by the
Administrative Agent to effect the grant to the Administrative Agent for the
benefit of the Administrative Agent and Lenders of a first priority, perfected
security interest therein, and such other documentation required by the
Administrative Agent in its reasonable discretion in connection therewith.
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ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) The Borrower shall fail to pay any principal on any Note when
due in accordance with the terms thereof or hereof; or the Borrower shall
fail to reimburse the Issuing Lender for any LOC Obligations when due in
accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Note or any fee or other amount payable hereunder when
due in accordance with the terms thereof or hereof and such failure shall
continue unremedied for three (3) Business Days (or any Guarantor shall
fail to pay on the Guaranty in respect of any of the foregoing or in
respect of any other Guaranty Obligations thereunder); or
(b) Any representation or warranty made or deemed made herein, in
the Security Documents or in any of the other Credit Documents or which
is contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall
prove to have been false, misleading or incorrect in any material respect
on or as of the date made or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with or
observe any term, covenant or agreement applicable to it contained in
Section 5.7(a), Section 5.9 or Article VI hereof ; or (ii) any Credit
Party shall fail to comply with any other covenant, contained in this
Credit Agreement or the other Credit Documents or any other agreement,
document or instrument among any Credit Party, the Administrative Agent
and the Lenders or executed by any Credit Party in favor of the
Administrative Agent or the Lenders (other than as described in Sections
7.1(a) or 7.1(c)(i) above), and in the event such breach or failure to
comply is capable of cure, is not cured within thirty (30) days of its
occurrence; or
(d) Any Credit Party shall (i) default in any payment of principal
of or interest on any Indebtedness (other than the Notes) in a principal
amount outstanding of at least $500,000 in the aggregate for the Credit
Parties beyond the period of grace (not to exceed 30 days), if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (ii) default (after giving effect to any applicable period of
grace) in the observance or performance of any other agreement or
condition relating to any Indebtedness in a principal amount outstanding
of at least $500,000 in the aggregate for the Credit Parties or contained
in any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on
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behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become
due prior to its stated maturity; or
(e) (i) Any Credit Party shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of
its assets, or any Credit Party shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any
Credit Party any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Credit Party any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) any Credit Party shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) any Credit Party shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they
become due; or
(f) One or more judgments or decrees shall be entered against any
Credit Party involving in the aggregate a liability (to the extent not
paid when due or covered by insurance) of $400,000 or more and all such
judgments or decrees shall not have been paid and satisfied, vacated,
discharged, stayed or bonded pending appeal within 10 days from the entry
thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to
any Plan or any Lien in favor of the PBGC or a Plan (other than a
Permitted Lien) shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a Trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) any Credit Party or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, any Multiemployer Plan or
(vi) any other similar event or condition shall occur or exist with
respect to a Plan; and in
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each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could have a Material Adverse Effect; or
(h) There shall occur a Change of Control; or
(i) The Guaranty or any provision thereof shall cease to be in full
force and effect or any Guarantor or any Person acting by or on behalf of
any Guarantor shall deny or disaffirm any Guarantor's obligations under
the Guaranty; or
(j) Any other Credit Document shall fail to be in full force and
effect or to give the Administrative Agent and/or the Lenders the
security interests, liens, rights, powers and privileges purported to be
created thereby (except as such documents may be terminated or no longer
in force and effect in accordance with the terms thereof, other than
those indemnities and provisions which by their terms shall survive);
(k) Any Serta License is terminated, assigned or deemed assigned;
(l) An event of default occurs under (i) the PBBC Bond Indenture or
any of the other "Bond Documents" (as such term is defined therein) or
(ii) the Xxxx Xxxxx Bond Indenture or any of the other documents related
thereto; or
(m) (i) Any Governmental Authority with applicable jurisdiction
determines that the Lenders are not holders of Designated Senior
Indebtedness (as defined in the Indenture and/or the Senior Subordinated
Credit Agreement) or (ii) the subordination provisions of the
Subordinated Notes or the PIK Subordinated Debt shall, in whole or in
part, terminate, cease to be effective or cease to be legally valid,
binding and enforceable as to any holder of the Subordinated Notes or the
PIK Subordinated Debt, as applicable.
SECTION 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such event,
(a) if such event is an Event of Default specified in Section 7.1(e) above,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and (b) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) the Administrative Agent may, or upon the written
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the written consent of
the Required Lenders, the Administrative Agent may, or upon the written request
of the Required Lenders, the Administrative Agent shall, by notice of default to
the Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes to be due and payable forthwith
and direct the Borrower to pay to the Administrative Agent cash collateral as
security for the LOC Obligations for subsequent drawings under then outstanding
Letters of Credit an amount equal to the maximum amount of
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which may be drawn under Letters of Credit then outstanding, whereupon
the same shall immediately become due and payable.
ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (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
the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of the Borrower
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under
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any obligation to any Lender to ascertain or to inquire as to the observance or
performance by the Borrower of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower.
SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative 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 in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement 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 Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
SECTION 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default. In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give prompt notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, however, that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Credit Agreement expressly requires that such action be
taken, or not taken, only with the consent or upon the authorization of the
Required Lenders, or all of the Lenders, as the case may be.
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SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative 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, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative 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 Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, 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 payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document 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 Administrative Agent under or in
connection with any of the foregoing; provided, however, 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
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct, as determined by a court of competent jurisdiction. The
agreements in this Section 8.7 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.
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SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30 days'
prior notice to the Borrower and the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the Notes, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be acceptable to the Borrower, whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 8.10 RELEASE OF COLLATERAL.
Each Lender hereby irrevocably authorizes the Administrative Agent, as
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any property covered by this Agreement or the other
Credit Documents (i) upon termination of the Commitments and payment and
satisfaction of all Obligations then due and payable, (ii) constituting property
being sold or disposed of if Borrower certifies to the Administrative Agent that
the sale or disposition is made in compliance with the provisions of this
Agreement (and the Administrative Agent may rely in good faith conclusively on
any such certificate, without further inquiry); or (iii) constituting property
leased to Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about to expire and which has
not been, and is not intended by Borrower to be, renewed or extended.
SECTION 8.11 SYNDICATION AND DOCUMENTATION AGENTS.
Notwithstanding any other provision hereof, each of the Syndication Agent
and the Documentation Agent identified on the cover page of this Agreement, in
their respective capacities as such, shall have no duties or responsibilities
and shall incur no liability under this Agreement or the other Credit Documents
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS AND WAIVERS.
Neither this Agreement, nor any of the Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this Section nor may be
released except as specifically provided herein or in the Security Documents or
in accordance with the provisions of this Section 9.1. The Required Lenders may,
or, with the written consent of the Required Lenders, the Administrative Agent
may, from time to time, (a) enter into with the Borrower written amendments,
supplements or modifications hereto and to the other Credit Documents for the
purpose of adding any provisions to this Agreement or the other Credit Documents
or changing in any manner the rights of the Lenders or of the Borrower hereunder
or thereunder or (b) waive, on such terms and conditions as the Required Lenders
may specify in such instrument, any of the requirements of this Agreement or the
other Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, waiver,
supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or Note or any installment thereon, or
reduce the stated rate of any interest or fee payable
hereunder (other than interest at the increased post-default
rate) or extend the scheduled date of any payment thereof or
increase the amount (other than in connection with an
assignment or participation made in accordance with Section
9.6) or extend the expiration date of any Lender's
Commitment, in each case without the written consent of all
of the Lenders or
(ii) amend, modify or waive any provision of this Section 9.1
or reduce the percentages specified in the definition of
Required Lenders, without the written consent of all the
Lenders, or
(iii) amend, modify or waive any provision of Article VIII
without the written consent of the then Administrative Agent,
or
(iv) release any of the Guarantors from their obligations
under the Guaranty, without the written consent of all of the
Lenders, or
(v) release all or substantially all of the Collateral,
without the written consent of all of the Lenders, or
(vi) amend, modify or waive any provision of the Credit
Documents requiring consent, approval or request of the
Required Lenders or all Lenders, without the written consent
of all of the Required Lenders or Lenders as appropriate and,
provided, further, that no amendment, waiver or consent
affecting the rights or duties of the Administrative Agent or
the Issuing Lender under any Credit
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Document shall in any event be effective, unless in writing
and signed by the Administrative Agent and/or the Issuing
Lender, as applicable, in addition to the Lenders required
hereinabove to take such action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); provided,
however, that the Administrative Agent will provide written notice to the
Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing Schedule 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided, however, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrower and
each Lender.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersede the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
SECTION 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed to each such party
at the address set forth on Schedule 9.2, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes.
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SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or written statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
Notes and the making of the Loans, provided that all such representations and
warranties shall terminate on the date upon which the Commitments have been
terminated and all amounts owing hereunder and under any Notes have been paid in
full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the preparation, negotiation, printing and execution of, and any amendment,
supplement or modification to, this Agreement and the other Credit Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, together with the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the Administrative
Agent for all its costs and expenses incurred in connection with the enforcement
or preservation of any rights under, or defense against any actions arising out
of, this Agreement, the Notes and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of the Credit Documents and any such other documents and the use,
or proposed use, of proceeds of the Loans (all of the foregoing, collectively,
the "indemnified liabilities"); provided, however, that the Borrower shall not
have any obligation hereunder to the Administrative Agent or any Lender with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, as determined by a
court of competent jurisdiction.
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The agreements in this Section 9.5 shall survive repayment of the Loans, Notes
and all other amounts payable hereunder.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Administrative Agent, all future holders
of the Notes and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations
under this Agreement or the other Credit Documents without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests
in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender, or any other interest of such Lender
hereunder. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged,
such Lender shall remain solely responsible for the performance thereof,
such Lender shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. No Lender
shall transfer or grant any participation under which the Participant
shall have rights to approve any amendment to or waiver of this Agreement
or any other Credit Document except to the extent such amendment or
waiver would (i) extend the scheduled maturity of any Loan or Note or any
installment thereon in which such Participant is participating, or reduce
the stated rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of interest at the increased
post-default rate) or reduce the principal amount thereof, or increase
the amount of the Participant's participation over the amount thereof
then in effect (it being understood that a waiver of any Default or Event
of Default shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without consent of any participant if the Participant's
participation is not increased as a result thereof), (ii) release any of
the Guarantors from their obligations under the Guaranty, (iii) release
all or substantially all of the Collateral, or (iv) consent to the
assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. In the case of any such participation,
the Participant shall not have any rights under this Agreement or any of
the other Credit Documents (the Participant's rights against such Lender
in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto) and
all amounts payable by the Borrower hereunder shall be determined as if
such Lender had not sold such participation, provided that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16,
2.17 and 9.5 with respect to its participation in the Commitments and the
Loans outstanding from time to time; provided, that no Participant shall
be entitled to receive any greater amount pursuant to such Sections than
the transferor Lender would have been entitled to receive in respect of
the amount of the
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participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time, sell or
assign to any Lender or any affiliate thereof and with the consent of the
Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, the Borrower (in each case, which consent
shall not be unreasonably withheld), to one or more additional banks or
financial institutions ("Purchasing Lenders"), all or any part of its
rights and obligations under this Agreement and the Notes in minimum
amounts of $5,000,000 with respect to its Revolving Commitment and its
Loans (or, if less, the entire amount of such Lender's obligations),
pursuant to a Commitment Transfer Supplement, executed by such Purchasing
Lender and such transferor Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, the
Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, the Borrower), and delivered to the
Administrative Agent for its acceptance and recording in the Register
(the recording in the Register a condition to such transfer); provided,
however, that any sale or assignment to an existing Lender shall not
require the consent of the Administrative Agent or the Borrower nor shall
any such sale or assignment be subject to the minimum assignment amounts
specified herein. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Effective Date specified in such
Commitment Transfer Supplement, (x) the Purchasing Lender thereunder
shall be a party hereto and, to the extent provided in such Commitment
Transfer Supplement, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the transferor
Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this
Agreement (and, in the case of a Commitment Transfer Supplement covering
all or the remaining portion of a transferor Lender's rights and
obligations under this Agreement, such transferor Lender shall cease to
be a party hereto). Such Commitment Transfer Supplement shall be deemed
to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of
such transferor Lender under this Agreement and the Notes. On or prior to
the Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the Notes delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement new
Notes to the order of such Purchasing Lender in an amount equal to the
Commitment assumed by it pursuant to such Commitment Transfer Supplement
and, unless the transferor Lender has not retained a Commitment
hereunder, new Notes to the order of the transferor Lender in an amount
equal to the Commitment retained by it hereunder. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Lender shall be
returned by the Administrative Agent to the Borrower marked "canceled".
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(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in
the Register as the owner of the Loan recorded therein for all purposes
of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of
a registration and processing fee of $3,000.00 for each Purchasing
Lender listed in such Commitment Transfer Supplement and the Notes
subject to such Commitment Transfer Supplement, the Administrative
Agent shall (i) accept such Commitment Transfer Supplement, (ii) record
the information contained therein in the Register and (iii) give prompt
notice of such acceptance and recordation to the Lenders and the
Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which
has been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement, in each case subject to Section 9.16.
(g) At the time of each assignment pursuant to this Section
9.6 to a Person which is not already a Lender hereunder and which is
not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms
(and, if applicable, a 2.17 Certificate) described in Section 2.16.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of
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principal and interest under any Note) to any Federal Reserve Bank in
accordance with applicable laws.
SECTION 9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "benefited
Lender") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e), or
otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such
other Lender's Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in
such portion of each such other Lender's Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Borrower agrees that each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon the occurrence of any Event of
Default, to setoff and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrower, or any part thereof in such amounts as such
Lender may elect, against and on account of the obligations and
liabilities of the Borrower to such Lender hereunder and claims of
every nature and description of such Lender against the Borrower, in
any currency, whether arising hereunder, under the Notes or under any
documents contemplated by or referred to herein or therein, as such
Lender may elect, whether or not such Lender has made any demand for
payment and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be
exercised by such Lender against the Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of
the Borrower, or against anyone else claiming through or against the
Borrower or any such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment
or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the
occurrence of any Event
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of Default. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by
such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
SECTION 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
SECTION 9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
Section 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telescoped or telex notice (actually received) at
such office that the same has been signed and mailed to it.
SECTION 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 9.12 INTEGRATION.
This Agreement and the Notes represent the agreement of the Borrower,
the Administrative Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent, the Borrower or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the Notes and
this Agreement supersedes the Commitment Letter dated April 22, 1999.
SECTION 9.13 GOVERNING LAW.
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance
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with, the law of the State of North Carolina.
SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and, by execution and delivery of this
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement
from which no appeal has been taken or is available. Each of the Borrower and
the other Credit Parties irrevocably agrees that all service of process in any
such proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto, such service being hereby acknowledged by the each of the Borrower and
the other Credit Parties to be effective and binding service in every respect.
Each of the Borrower, the other Credit Parties, the Administrative Agent and the
Lenders irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against the Borrower or the other Credit Parties
in the court of any other jurisdiction.
SECTION 9.15 ARBITRATION.
(a) Notwithstanding the provisions of Section 9.14 to the
contrary, upon demand of any party hereto, whether made before or
within three (3) months after institution of any judicial proceeding,
any dispute, claim or controversy arising out of, connected with or
relating to this Agreement and other Credit Documents ("Disputes")
between or among parties to this Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from
Credit Documents executed in the future, or claims arising out of or
connected with the transaction reflected by this Agreement.
Arbitration shall be conducted under and governed by the
Commercial Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Charlotte, North Carolina. A
hearing shall begin within 90 days of demand for arbitration and all
hearings shall be concluded within 120 days of demand for arbitration.
These time limitations may not be extended unless a party shows cause
for extension and then no more than a total extension of 60 days. The
expedited procedures set forth in Rule 51 et seq. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000. All
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applicable statutes of limitation shall apply to any Dispute. A
judgment upon the award may be entered in any court having
jurisdiction. Arbitrators shall be licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA with
expertise in corporate finance. The parties hereto do not waive
applicable Federal or state substantive law except as provided herein.
Notwithstanding the foregoing, this arbitration provision does not
apply to disputes under or related to Hedging Agreements.
(b) Notwithstanding the preceding binding arbitration
provisions, the Administrative Agent, the Lenders, the Borrower and the
other Credit Parties agree to preserve, without diminution, certain
remedies that the Administrative Agent on behalf of the Lenders may
employ or exercise freely, independently or in connection with an
arbitration proceeding or after an arbitration action is brought. The
Administrative Agent on behalf of the Lenders shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise
or prosecute the following remedies, as applicable (i) all rights to
foreclose against any real or personal property or other security by
exercising a power of sale granted under Credit Documents or under
applicable law or by judicial foreclosure and sale, including a
proceeding to confirm the sale; (ii) all rights of self-help including
peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (iii) obtaining
provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable,
a judgment by confession of judgment. Preservation of these remedies
does not limit the power of an arbitrator to grant similar remedies
that may be requested by a party in a Dispute.
(c) The parties hereto agree that they shall not have a remedy
of punitive or exemplary damages against the other in any Dispute and
hereby waive any right or claim to punitive or exemplary damages they
have now or which may arise in the future in connection with any
Dispute whether the Dispute is resolved by arbitration or judicially.
(d) By execution and delivery of this Agreement, each of the
parties hereto accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted under
the Arbitration Rules in Charlotte, North Carolina and irrevocably
agrees to be bound by any final judgment rendered thereby in connection
with this Agreement from which no appeal has been taken or is
available.
SECTION 9.16 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Credit Parties which is furnished
pursuant to this Agreement, any other Credit Document or any documents
contemplated by or referred to herein or therein and which is designated by the
Borrower to the Lenders in writing as confidential or as to which it is
otherwise reasonably clear such
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information is not public, except that any Lender may disclose any such
information (a) as has become generally available to the public other than by a
breach of this Section 9.16, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or the
OCC or the NAIC or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Lender, (d) to any prospective Participant or assignee in
connection with any contemplated transfer pursuant to Section 9.6, provided that
such prospective transferee shall have been made aware of this Section 9.16 and
shall have agreed to be bound by its provisions as if it were a party to this
Agreement or (e) to Gold Sheets and other similar bank trade publications, such
information to consist of deal terms and other information regarding the credit
facilities evidenced by this Credit Agreement customarily found in such
publications.
SECTION 9.17 ACKNOWLEDGMENTS.
The Borrower and the other Credit Parties each hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other Credit
Party arising out of or in connection with this Agreement and the
relationship between Administrative Agent and Lenders, on one hand, and
the Borrower and the other Credit Parties, on the other hand, in
connection herewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the
Borrower or the other Credit Parties and the Lenders.
SECTION 9.18 WAIVERS OF JURY TRIAL.
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
SECTION 9.19 BINDING EFFECT; TERMINATION OF THIS CREDIT AGREEMENT;
TERMINATION OF EXISTING CREDIT AGREEMENT.
(a) This Credit Agreement shall become effective at such time
when all of the conditions set forth in Section 5.1 have been satisfied
or waived by the Lenders and it shall have been executed by each Credit
Party and the Administrative Agent, and the Administrative Agent shall
have received copies hereof (telefaxed or otherwise) which,
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when taken together, bear the signatures of each Lender, and thereafter
this Credit Agreement shall be binding upon and inure to the benefit of
each Credit Party, the Administrative Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans,
LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding, all of the Credit Party Obligations have
been irrevocably satisfied in full and all of the Commitments hereunder
shall have expired or been terminated.
(c) The Credit Parties and the Lenders (including the Issuing
Lender) party to the Existing Credit Agreement each hereby agrees that,
at such time as this Credit Agreement shall have become effective
pursuant to the terms of subsection (a) above, (i) the Existing Credit
Agreement automatically shall be deemed amended and restated in its
entirety by this Credit Agreement, (ii) the Commitments under the
Existing Credit Agreement and as defined therein automatically shall be
terminated and replaced with the Commitments hereunder and (iii) all of
the promissory notes executed by the Borrower in connection with the
Existing Credit Agreement automatically shall be canceled and replaced
by the Notes.
ARTICLE X
GUARANTY
SECTION 10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: the Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all Obligations of the Borrower to the Administrative Agent and the
Lenders. If any or all of the Obligations of the Borrower to the Administrative
Agent and the Lenders becomes due and payable hereunder, each Guarantor
unconditionally promises to pay such indebtedness to the Administrative Agent
and the Lenders, on order, or demand, together with any and all reasonable
expenses which may be incurred by the Administrative Agent or the Lenders in
collecting any of the Obligations.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, 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 such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
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applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
SECTION 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such Obligations to the Administrative Agent for the account of
the Lenders, or order, on demand, in lawful money of the United States. Each of
the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.
SECTION 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
SECTION 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
SECTION 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each
Lender without
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notice or demand (except as shall be required by applicable statute and cannot
be waived), and without affecting or impairing its liability hereunder, from
time to time to (a) renew, compromise, extend, increase, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof in accordance with this Agreement, including
any increase or decrease of the rate of interest thereon, (b) take and hold
security from any guarantor or any other party for the payment of this Guaranty
or the indebtedness and exchange, enforce waive and release any such security,
(c) apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine and (d)
release or substitute any one or more endorsers, guarantors, the Borrower or
other obligors.
SECTION 10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
SECTION 10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the Borrower,
any other guarantor or any other party, (ii) proceed against or exhaust
any security held from the Borrower, any other guarantor or any other
party, or (iii) pursue any other remedy in the Administrative Agent's
or any Lender's power whatsoever. Each of the Guarantors waives any
defense based on or arising out of any defense of the Borrower, any
other guarantor or any other party other than payment in full of the
indebtedness, including without limitation any defense based on or
arising out of the disability of the Borrower, any other guarantor or
any other party, or the unenforceability of the indebtedness or any
part thereof from any cause, or the cessation from any cause of the
liability of the Borrower other than payment in full of the
indebtedness. Without limiting the generality of the provisions of this
Article X, each of the Guarantors hereby specifically waives the
benefits of N.C. Gen. Stat. Section 26-7 through 26-9, inclusive. The
Administrative Agent or any of the Lenders may, at their election,
foreclose on any security held by the Administrative Agent or a Lender
by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or
remedy the Administrative Agent and any Lender may have against the
Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to
the extent the indebtedness has been paid. Each of the Guarantors
waives any defense arising out of any such election by the
Administrative Agent and each of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantors against the
Borrower or any other party or any security.
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(b) Each of the Guarantors waives all presentments, demands
for performance, protests and notices, including without limitation
notices of nonperformance, notice of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness. Each Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrower's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the indebtedness
and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that neither the
Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or
risks.
(c) Each of the Guarantors hereby agrees it will not exercise
any rights of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
against the Borrower or any other guarantor of the indebtedness of the
Borrower owing to the Lenders (collectively, the "Other Parties") and
all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any time
otherwise have as a result of this Guaranty until such time as the
Loans hereunder shall have been paid and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the Administrative
Agent and the Lenders now have or may hereafter have against any Other
Party, any endorser or any other guarantor of all or any part of the
indebtedness of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the indebtedness of the Borrower
until such time as the Loans hereunder shall have been paid and the
Commitments have been terminated.
SECTION 10.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
SECTION 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the Commitments relating thereto, confirm to the
Borrower, the Guarantors or any other Person that the such indebtedness and
obligations have been paid and the Commitments relating thereto terminated,
subject to the provisions of Section 10.2.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
BORROWER: SLEEPMASTER L.L.C.,
--------- a New Jersey limited liability company
By:
Name:
Title:
GUARANTORS: SLEEPMASTER HOLDINGS L.L.C.,
----------- a New Jersey limited liability company,
By:
Name:
Title:
LOWER ROAD ASSOCIATES, LLC,
a New Jersey limited liability company
By:
Name:
Title:
PALM BEACH BEDDING COMPANY, a
Florida corporation
By:
Name:
Title:
XXXX MANUFACTURING COMPANY,
a Pennsylvania corporation
By:
Name:
Title:
SLEEPMASTER FINANCE CORPORATION
a Delaware corporation
By:
Name:
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Title:
STAR BEDDING PRODUCTS
By:
Name:
Title:
AWI CORPORATION,
a Delaware corporation
By:
Name:
Title:
AGENT AND LENDERS: FIRST UNION NATIONAL BANK,
------------------ as Administrative Agent and as a Lender
By:
Name:
Title:
XXXXXX FINANCIAL, INC.
By:
Name:
Title:
IBJ WHITEHALL BANK & TRUST COMPANY
By:
Name:
Title:
FIFTH THIRD BANK
By:
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Name:
Title:
FIRST SOURCE FINANCIAL LLP,
By First Source Financial Inc., its manager
By:
Name:
Title:
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